To Bain or Not To Bain: That’s Not the Question

The media continues to obsess about whether Mitt Romney ran Bain Capital from 1999 through 2001.  As the New York Times puts it, “At stake is whether Democrats can hold Mr. Romney responsible for a series of now-controversial investments Bain made during the period in question, including companies that specialized in outsourcing, laid off some of their workers, or declared bankruptcy.”

Yes, Democrats have run ads that question Romney’s responsibility for outsourcing American jobs.  And, yes, Romney has denied that he was in charge of managing investments at Bain during the period in question, when he was living in Utah working at his new job managing the Olympic Games.

During that three-year period Romney was still listed as the chief executive and sole owner of the parent company Bain Capital Inc. and his name appeared on 142 different documents that were filed with federal regulators.  But in practice, he probably didn’t have anything to do with making specific decisions on which companies were bought and sold by Bain’s various funds.

This is an aspect of Wall Street that’s difficult for most working class Americans to understand.  A rich man’s name may be on the legal documents of a company and he may draw a six-figure salary (as Romney did, receiving at least $100,000 from Bain Capital in 2001) for any number of reasons that have nothing to do with putting in an honest day’s work.  Sometimes wealthy people are paid only for the use of their names, and they never sign any documents, read any of the documents they do sign, never attend board meetings, never provide any advice, and never make any decisions.

Nice work if you can get it.

Remember, though, that the money paid to rich people for the use of their names is part of the enormous profit squeezed out of the companies owned and managed by hedge funds and private equity companies like Bain Capital Inc.  Jobs are outsourced and companies run into the ground so that outsized profits can be wrung out of them in order to pay wasteful overhead, including outsized salaries to rich people who don’t do anything.  Mitt Romney has benefited enormously from this disgusting practice, and he’s never condemned it.

Mr. Romney claims that he was never involved in outsourcing jobs.  But he did profit from the practice.  And he’s never actually said that jobs should stay in America and that everyone should invest in America.  According to his 2010 tax return—the only one he’s made public—he has many investments in offshore funds through his Bain Capital holdings.  Most of those offshore funds were set up so that clients of Bain Capital could avoid paying U.S. taxes.

The real issue is whether working class Americans think a man like Mitt Romney represents their interests.  After all, that’s the main question we should ask ourselves before we vote for any politician:  does this person understand and agree with my interests and concerns, and can he represent me?

The answer is that Romney neither understands nor cares about the economic conditions under which most Americans live.  He’s been content up till now to live off the profits of a system that has shrunk the “middle” class to a handful of people making over six figures a year and plunged the majority of Americans into poverty and insecurity.

And he’s happy about that.