Reagan budget director on Romney's business background

David Stockman, budget director under president Ronald Reagan, writes in a lengthy article published in Newsweek magazine,

Nevertheless, Mitt Romney claims that his essential qualification to be president is grounded in his 15 years as head of Bain Capital, from 1984 through early 1999. According to the campaign’s narrative, it was then that he became immersed in the toils of business enterprise, learning along the way the true secrets of how to grow the economy and create jobs. [...]

Except Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped, and stripped businesses. He did not build enterprises the old-fashioned way -- out of inspiration, perspiration, and a long slog in the free market fostering a new product, service, or process of production. Instead, he spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and castoffs of corporate America, leverage them to the hilt, gussy them up as reborn “roll-ups,” and then deliver them back to Wall Street for resale -- the faster the better.

That is the modus operandi of the leveraged-buyout business, and in an honest free-market economy, there wouldn’t be much scope for it because it creates little of economic value. But we have a rigged system -- a regime of crony capitalism -- where the tax code heavily favors debt and capital gains, and the central bank purposefully enables rampant speculation by propping up the price of financial assets and battering down the cost of leveraged finance.

Stockman goes into a lot more detail in his 5000-word Newsweek article.

Facebooktwittergoogle_plusredditpinterestlinkedintumblrmailby feather

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments are moderated, which can take up to a day (rarely even two), so please be patient. I welcome agreement, disagreement, and corrections on anything from substance to spelling. I try to weed out spam and anything defamatory or pointlessly insulting (to anybody), unless of course I think it's really funny.