Silver exposed again.
First, Silver engages in his typically unpleasantly personal attacks against sincere racial nationalists:
silviosilver ✓ᵀʳᵘᵐᵖ ˢᵘᵖᵖᵒʳᵗᵉʳ Marc • 7 days ago
Actually, a baseless and contrived point. But it evidently had the intended effect. Oh Hood, I just love your essays, you’re the greatest, marry me.
(I guess if I were to start critiquing Hood, Silver would suddenly find Gregory as an “indefatigable” fighter and full of “energy” and my comments indicative of “mental instability”).
And then he tries to make apologies for Bain’s “creative destruction” –
silviosilver ✓ᵀʳᵘᵐᵖ ˢᵘᵖᵖᵒʳᵗᵉʳ teapartydoc • 6 days ago
If you, like Hood, think competent financial management doesn’t enhance the production of real goods and services then, I’m sorry, you just don’t know what you’re talking about.
silviosilver ✓ᵀʳᵘᵐᵖ ˢᵘᵖᵖᵒʳᵗᵉʳ Andrew • 5 days ago
who left nothing of real value
If I sell you a pizza and sate your hunger I guess I haven’t left anything “of real value” in the long-term either. So what? It’s called living. If I provide the service, I’m entitled to profit from it.
He extracted maximum profit
That’s generally evidence of efficiency, not deceit.
Just like a tapeworm, he and his company were highly successful and competent.
Tapeworms don’t enter into voluntary contracts with their victims.
A few excerpts, emphasis added:
At the time, Mitt Romney had been running Bain Capital since 1984, minting a reputation as a prince of private investment. A future prospectus by Deutsche Bank would reveal that by the time he left in 1999, Bain had averaged a shimmering 88 percent annual return on investment. Romney would use that success to launch his political career.
His specialty was flipping companies — or what he often calls “creative destruction.” It’s the age-old theory that the new must constantly attack the old to bring efficiency to the economy, even if some are destroyed along the way. In other words, people like Romney are the wolves, culling the herd of the weak and infirm.
His formula was simple: Bain would purchase a firm with little money down, then begin extracting huge management fees and paying Romney and his investors enormous dividends.
The result was that previously profitable companies were now burdened with debt. But much like the Enron boys, Romney’s battery of MBAs fancied themselves the smartest guys in the room. It didn’t matter if a company manufactured bicycles or contact lenses; they were certain they could run it better than anyone else.
Bain would slash costs, jettison workers, reposition product lines and merge its new companies with other firms. With luck, they’d be able to dump the firm in a few years for millions more than they’d paid for it.
But the beauty of Romney’s thesis was that it really didn’t matter if the company succeeded. Since he was yanking out cash early and often, he would profit even if his targets collapsed.
Which was precisely the fate awaiting Georgetown Steel.
When Bain purchased the mill, Sanderson says, change was immediate. Equipment upgrades stopped. Maintenance became an afterthought. Managers were replaced by people who knew nothing of steel. The union’s profit-sharing plan was sliced twice in the first year — then whacked altogether.
Romney was charging GSI $900,000 a year in management fees to run the company. The Kansas City mill received $900,000 worth of ineptitude in return.
Although Bain borrowed $97 million to retool the plant so it could also produce wire rods, it left the rest of the facility to rot.
To save costs, Bain went miserly on everything from maintenance to spare parts and earplugs. Equipment deteriorated. Since the new managers didn’t know how to repair it, “they’d want to rent a new piece of equipment out instead of maintaining what we had,” says Morrow. The waste and inefficiency was breathtaking.
Bain’s plan all along was to streamline the company into greater profitability, then reap the rewards with a public stock offering. But the exact opposite was happening. Even Roger Regelbrugge, whom Bain installed as CEO, knew the debt was crushing GSI from within, according to Reuters. If a public offering didn’t materialize, the company would collapse.
Steel was about to enter a periodic downturn. Countries around the world were locked in a war of tariffs and government-subsidized production, creating a glut and driving down prices. Romney’s flip strategy was never meant to endure difficult times.
Workers saw the end coming; they were particularly worried that Bain was badly underfunding their pension plan. So they went on strike in 1997, bringing a traditional Rust Belt flair to the festivities by littering the streets with nails and gunning bottle rockets at security guards.
When it was all over, the Steelworkers’ union agreed to wage and vacation cuts in exchange for extra health and pension safeguards should the plant close. Yet GSI was now hemorrhaging money, says David Foster, the union official who negotiated the deal. He claims that Bain cursed the company by placing its own interests above those of customers or long-term stability.
“Like a lot of private equity firms, Bain managed the company for financial results, not production results,” says Foster. “It didn’t invest in maintenance or immediate customer needs. All that came second to meeting monthly financial goals.”
It would take a few more years of bleeding, but GSI eventually fell to bankruptcy. The Kansas City mill closed for good; 750 people lost their jobs. Worse, Romney had shorted their pension fund by $44 million. The feds were forced to cover the difference, while workers saw their benefits slashed in bankruptcy court.
The battered Georgetown plant and the foundries in Arizona and Minnesota ultimately were bought out of bankruptcy by new companies. Their workforces were halved.
Let’s count the ways that Silver is wrong. First, Bain Capital was not “competent financial management” and did not routinely “enhance the production of real goods and services.” Romney was flipping companies to make money, often leaving wreckage behind – not only the human wreckage of ruined lives (yes, it’s called living, Silver), but the wreckage of what used to be successful companies that were effectively providing those “goods and services” before they were subjected to leveraged buyouts. Bain was the equivalent of someone “flipping houses” to make quick profits, NOT like someone buying a home as a long term investment and making substantial improvements over time.
Second: A pizza is a real object of real value to someone desiring sustenance. A pizza is a physical object containing calories that, even when digested, are incorporated into the eater’s system. Bain’s leveraged buyouts and “creative destruction” and middleman profits added no real value, did not improve the long-term sustainability of all the companies so purchased, did not invent anything, produce anything not produced before, and, as stated above, did not even provide competent financial management.
Third, maximum profit can very well be achieved through deceit. See: Madoff, Bernie – who lived very well before exposure. See successful con men throughout history (Silver I believe being very well acquainted with the concept of the con man). See the behavior of Jews in business (Bain being very Jewish-like in behavior, indeed – Mormons akin to Jews?).
Fourth, what Bain was doing may have been technically “voluntary” to the companies bought out, but it can still be considered akin to parasitism. A hungry and stupid person may eat poorly cooked pork. They may not have “voluntarily” accepted a tapeworm, but were infected by a parasite through their own greed, gluttony, and/or stupidity.
Fifth, and most importantly, even if Silver is right and Bain was the paragon of financial efficiency – so what? Hood is approaching this from the standpoint of a racial nationalist, not a laisses-faire predatory capitalist with a “profits uber alles” mentality. Many racial destructive activities are justified in the name of “economic efficiency” and “economic growth.” Romney’s “creative destruction” is no more justified from a strictly racial nationalist perspective as would be alien immigrant labor, for example.
As usual, Silver is unmasked as an unpleasant apologist for predatory capitalism and someone whose alleged interest in racial preservation is a complete sham.
Do the right thing. Spencer, and ban the thing.