Moments ago Mitt Romney concluded a fiery speech in which he blasted Donald Trump, accusing him of being a “con man” and asking republicans to choose anyone else. Among the point he brought up was that Trump’s domestic polices would sink America into a recession, that his foreign policies would make the world less safe, and criticized Trump’s personal qualities, calling him “a bully” and “a misogynist.”
However, what we found particularly ironic is that Mitt Romney, who previously had led Private Equity firm Bain Capital, mocked Trump’s business acumen by pointing out his track record of having various bankruptcies under his belt which “have crushed small businesses and the men and women who worked for them.”
This is precisely what he said: “But wait, you say, isn’t he a huge business success that knows what he’s talking about? No he isn’t. His bankruptcies have crushed small businesses and the men and women who worked for them.”
We found this particularly ironic coming from the man who made profits for himself by saddling companies with massive debt loads to generate outsized returns on equity in a 3-5 year investment horizon.
Here is how Romney himself fared as a businessman, based on a WSJ report from 2012:
Mitt Romney’s political foes are stepping up attacks based on his time running investment firm Bain Capital, tagging him with making a fortune from the rougher side of American capitalism—even as Mr. Romney says his Bain tenure shows he knows how to build businesses.
Amid anecdotal evidence on both sides, the full record has largely escaped a close look, because so many transactions are involved.The Wall Street Journal, aiming for a comprehensive assessment, examined 77 businesses Bain invested in while Mr. Romney led the firm from its 1984 start until early 1999, to see how they fared during Bain’s involvement and shortly afterward.
Among the findings: 22% either filed for bankruptcy reorganization or closed their doors by the end of the eighth year after Bain first invested, sometimes with substantial job losses. An additional 8% ran into so much trouble that all of the money Bain invested was lost.
Another finding was that Bain produced stellar returns for its investors—yet the bulk of these came from just a small number of its investments. Ten deals produced more than 70% of the dollar gains.
Some of those companies, too, later ran into trouble. Of the 10 businesses on which Bain investors scored their biggest gains, four later landed in bankruptcy court
So let’s get this straight: the man who led to 17 of the 77 business Bain invested in closing down in bankruptcy, and another 4 going Chapter 11 after Bain extracted all the possible value, is criticizing Trump for engaging in Chapter 11 bankruptcy protection?
We wonder how many large businesses – because Bain does not bother with small business LBOs – “and the men and women who worked for them were crushed” as a result of Romney’s own attempt to extract as much value as possible by layering dozens of companies with massive debt loads?
To be sure, we don’t criticize Romney’s business model: it is what he does, just like what Trump does is to run companies, and the ultimate result is always failure. But we do find it grotesquely ironic that Romney has the gall to mock Trump’s business record when he himself is a far greater abuser of US bankruptcy laws.
This is, after all, capitalism. But for Romney to turn around and so blatantly ignore his track record when blasting Trump’s is, in a word, preposterous.
* * *
And speaking of ironic, we can’t help but be amused by what Romney said in February 2012 when Trump endorsed Romney’s presidential campaign:
“I am so honored and pleased to have Donald Trump’s endorsement. Donald Trump has shown an extraordinary ability to understand how our economy works. To create jobs for the American people. He’s done it here in Nevada. He’s done it across the country. He understands that our economy is facing threats from abroad. He’s one of the few people who stood up and said China has been cheating. They’ve taken jobs from Americans. They haven’t played fair. We have to have a President who will stand up to cheaters.”