Unable to support the debt it had taken on under Bain, Dade Behring filed for Chapter 11 bankruptcy reorganization in 2002. That led critics to call the deal a win for Romney and Bain Capital’s investors but a loss for everyone else.
“Those jobs never came back. There is no Dade Behring in Miami,” said Josh Kosman, author of The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy. “He made a fortune by transferring wealth from a company to himself and his investors.”
Gingrich – Romney’s main competitor in Tuesday’s primary – has leveled similar accusations.
“The Bain model is to go in at a very low price, borrow an immense amount of money, pay Bain an immense amount of money and leave,” Gingrich said while campaigning in South Carolina. “I’ll let you decide if that’s really good capitalism. I think that’s exploitation.”
Palm Beach Post Article – 1/27/12
Newtonian CapitalistsThis blog is devoted to discussion and collection of material relevant to the public policy issues involved in "Private Equity." Is it true that ANY criticism of "Private Equity" amounts to criticism of Capitalism itself? The position of this page is an emphatic "No!" If you agree, please contribute your suggestions for links and background information via comment here, and then participate in the public debate on this issue in your own community. Links to new articles and reference material will be posted as fast as possible as a research reference for anyone interested in looking further into this fascinating topic.
The Question Of The Hour:
Newt Gingrich: “The Bain model was to go in at a very low price, borrow an immense amount of money, pay Bain a great deal of money, and leave. Now, I’ll let you decide if that’s really good capitalism. I think it’s exploitive. I think it’s not defensible. You’ll notice he doesn’t try to defend it.”
“I was on Teddy Forsyth’s advisory board. Teddy took over Gulfstream – he found out that it was in much worse shape than he thought it was in. He went out and borrowed a billion dollars, went down personally and became CEO. I was on a board that included George Shultz, Colin Powell, Henry Kissinger – and he got all these guys out selling Wall Streeters. And they had pretty good connections. Now my point is, I’m proud of real capitalism. I’m proud of guys who say to their workers, I’m in it with you. If I lose money and you use a job, we lost together because we both tried. I’m not particularly proud of people who go in, leverage the game, borrow the money, leave the debt behind, and walk off with all the profits. And I’d be glad to debate Mitt Romney any where in the country about specific cases if they would release the details so you knew what the cases were. I know the WSJ reported about these specific cases – not all of Bain, but these very specific cases where there was very high leverage and very quick departure.
Ayn Rand On Capitalism And Justice:"The moral justification of capitalism does not lie in the altruist claim that it represents the best way to achieve “the common good.” It is true that capitalism does—if that catch-phrase has any meaning—but this is merely a secondary consequence. The moral justification of capitalism lies in the fact that it is the only system consonant with man’s rational nature, that it protects man’s survival qua man, and that its ruling principle is: JUSTICE."
- Ayn Rand: “What Is Capitalism?” From Capitalism: The Unknown Ideal
About The Name…..Although the name "Newtonian Capitalism" might seem better for this blog, that name might imply that Newtonian Capitalism differs from "Capitalism" as defined by Ayn Rand. To the contrary, this site is dedicated to the proposition that proponents of true Capitalism -- Newtonian Capitalists -- must rigorously defend Capitalism from those who would assert that misrepresentation, fraud, or other unethical practices have any part in true capitalism. For the essence of the distinction between Money-Making and Money-Appropriating, which is at the heart of this distinction, see the 1964 Cosmopolitan article by Ayn Rand.
Pages at Newtonian Capitalists
I can look forward to no blissful prospect for a race of men that, under the domination of the State, at the cost of all freedom of action, at the cost, indeed, of their own true selves, shall enjoy, if one will, a fair abundance of the material blessings of life. Some Matthew Arnold of the future would inevitably say of them in phrase like that applied to the Puritans of old: “They entered the prison of socialism and had the key turned upon their spirit there for hundreds of years.” Into that prison of socialism, with broken enterprise and broken energy, as serfs under the mastery of the State, while human personality is preferred to unreasoning mechanism, mankind must hesitate to step. When they shall once have entered within it, when the key shall have been turned upon their spirit and have confined them in narrower straits than even Puritanism could have done, it will be left for them to find, in their blind obedience and passive submission, the recompense for the singleness of character, the foresight, and the energy, that they have left behind them.
The aphorism of Emerson, “Churches have been built, not upon principles, but upon tropes,” is as true in the field of politics as it is in the field of religion. In a like figurative spirit, the followers of communism have reared their edifice; and, looking back upon the finished structure, seeking to discern the base on which it rests, the critic finds, not principles, but tropes. The builders have appealed to laws whose truth they took for granted; they have appealed to a future that has no warrant in the past; and fixing their gaze upon the distant dreamland, captivated by the vision there beheld, entranced by its ideal effulgence, their eyes blinded to the real conditions of the human problem they had set before them. Their enemies have not been slow to note such weakness and mistake; and perhaps it may serve to clear up misconceptions, perhaps it may serve to lessen cant and open the way for fresh and vigorous thought, if we shall once convince ourselves that altruism cannot be the rule of life; that its logical result is the dwarfing of the individual man; and that not by the death of human personality can we hope to banish the evils of our day, and to realize the ideal of all existence, a nobler or a purer life.
Disclaimer I:This page has absolutely no affiliation with Newt Gingrich or the Gingrich Campaign for President. This page is the personal project of the contributors and is intended solely to provide information about the issue of Private Capital and related Wall Street practices. The material and opinions presented here are those of the authors and are offered solely to assist in the public discussion of these issues. All opinions and statements made here are those of the respective author and in no way attributable to or representative of those of Newt Gingrich or his campaign for president.
Disclaimer II:All opinions here are commentary by the writer on a matter of important public interest, and are not submitted as statements of definite fact or law. Any inaccuracies in matters referred to on this page will be corrected immediately upon request. Indeed, since the issue here is the general PE method rather than any particular corporate deal, any responses which indicate why the method referred to here is described incorrectly are encouraged. It is also important to note that Mitt Romney appears to be a fine man, and the topic of this blog is not the character or integrity of Mitt Romney himself. The issues discussed in this blog -- and the defense of Capitalism presented here -- transcend any one person, company, candidate, or election.