Mitt Romney would prefer for you to recall just one number regarding his record at Bain Capital. That would be 100,000 — the number of jobs that the Republican candidate claims he created during 15 years at the private equity firm.
But now there is a more interesting, plausible and relevant number: $20,000. That’s how much money Romney is estimated to have made from each worker laid off during Bain’s many corporate takeovers.
In fairness, Romney’s goal at Bain was never to create jobs but to reap the biggest returns for their valued investors. Judging by that metric, he did exceedingly well, as even Bill Clinton accidentally admitted when discussing Romney’s “sterling” business career. And of course, Romney’s fortune, estimated somewhere between $190 million and 250 million, attests to that assessment.
But over the course of the Romney’s years at Bain Capital, at least five of the companies he took over eventually went bankrupt, while still rewarding Bain investors handsomely:
• American Pad & Paper: Bain invested $5 million in the Ohio paper company in 1992, and reportedly collected $100 million in dividends on that investment. But AMPAD went bankrupt in 2000, resulting in 385 employees losing their jobs.
• Dade Behring: Bain invested $415 million in a leveraged buyout in 1994, borrowed an additional $421 million, and ultimately walked away with $1.78 billion. Dade filed for bankruptcy in 2002, and laid off 2,000 employees.
• DDI Corporation: Bain reportedly invested $46.3 million in the electronic parts manufacturer 1997, earning $85.5 million in profits plus $10 million more in management fees. When the company went bankrupt several years later, 2,100 workers were laid off.
• GS Industries: In 1993, Bain invested $60 million in the Kansas City steel maker, borrowed a lot of money, and then took $65 million in dividends. But GS eventually went bankrupt in 2002, and 750 workers lost their jobs and pensions.
• Stage Stores: Bain invested $5 million to purchase the Houston-based retailer and took it public in the mid-’90s, reaping $100 million from stock offerings. In 200o, following Romney’s departure from Bain, Stage filed for bankruptcy and 5,795 workers were reportedly dismissed.
While it is true that some of those companies went under after Romney had left Bain, the job growth for which he now seeks credit also occurred after his departure in 1999. But the bankruptcies — and the bust-out scenario that helped Bain to profit anyway — are not news. What AOL’s Daily Finance has contributed to the Bain debate is a simple calculation: Bain Capital booked $1.995 billion in profits from the layoffs of 11,030 workers at various firms. And by that scoring, Romney earned roughly $20,000 himself for each of those fired employees. Nice work if you can get it (or take it away from someone else).
By: Axel Tonconogy, The National Memo, June 15, 2012
So says a campaign advisor, who pinned the auto bailout success on the former Massachusetts governor.
Back in 2009, when the newly elected President Barack Obama was contemplating a bailout of the auto-industry, Mitt Romney emerged from his temporary hiatus to push policymakers in the other direction. “Let Detroit go bankrupt,” he urged in an op-ed for New York Times. For Romney, a managed bankrupcy of the kind he had pioneered at Bain Capital was the only way to “save” the American auto industry. As for Obama’s approach, Romney warned that “If General Motors, Ford and Chrysler get the bailout their chief executives asked for yesterday, you can kiss the American automotive industry goodbye.” A few months later, Romney repeated his warning: If Obama continued on his path, “it would make GM the living dead.”
Three years later, Romney’s prediction hasn’t come to pass. The American auto industry is thriving even as conservatives run with the idea that government is categorically ineffective. In February, during the Republican primary in Michigan, Romney further disparaged the auto bailout, granting its success, but accusing Obama of kowtowing to “union bosses.” This message didn’t play well, and only gave Obama and Democrats an opportunity to tout the success of the bailouts, and contrast them with Romney’s position.
Now that Romney is in the general election, he has begun to shake the Etch A Sketch on a number of issues. One of those, if this comment from Romney advisor Eric Fehrnstrom is any indication, is the bailout:
“[Romney’s] position on the bailout was exactly what President Obama followed,” Fehrnstrom said. “He said, ‘If you want to save the auto industry, just don’t write them a check. That will seal their doom. What they need to do is go through a managed bankruptcy process.’”
“Consider that the crown jewel,” Fehrnstrom said. “The only economic success that President Obama has had is because he followed Mitt Romney’s advice.”
Writing at Talking Points Memo, Pema Levy points out that Romney’s position on the bailout has been hazy; he was vehemently against the administration, but in a way that gave him a way to claim credit, as Fehrnstrom does. Of course, the fact that Romney has rhetorical space to take credit for the bailout doesn’t mean that’s any less ridiculous; it’s the political equivalent of twelve-year-old boasting—“I could have done that too! If you’d picked me first.”
One last observation—this continues an odd pattern by the Romney campaign, which inhabits a frame established by the Obama campaign rather than creating something for themselves. First, there was the “War on Women,” where Romney advisors argued that it was Democrats who were fighting the real war on women, while conceding that the existence of an actual war. Then, in Romney’s speech last Tuesday, there was “fairness,” when the former Massachusetts governor argued that government was the real purveyor of unfairness in the country. And now we have the auto industry bailout, where Romney claims to have been the real mastermind behind the policy.
I’m not sure what the campaign hopes to get out of this approach. By continuously talking about Obama on Obama’s terms, they do nothing but put themselves on the defensive. It’s a bad strategy, and the only saving grace is that we’re still early in the election.
By: Jamelle Bouie, The American Prospect, April 30, 2012
If for one moment anyone has the notion that for-profit health insurance companies are in the business of guarding the health (or wealth) of policyholders, that notion ought to be quickly dismissed in favor of the truth. For-profit health insurance giants guard profits.
I arrived outside the WellPoint annual shareholders meeting in a hotel in Indianapolis yesterday to be greeted by more guards (and some armed) than I have seen surrounding President Obama at times. Apparently just the prospect of having some of the legal shareholders question the business practices and ethics of the WellPoint board and CEO Angela Braly was very scary for the company and its elite leaders.
Some of the shareholders have in recent years put forward a resolution supporting WellPoint’s return to its non-profit roots. After last year’s meeting, the resolution earned 9.6 percent or 30,000,000 shareholder votes. The current leadership doesn’t like that nor do they like the efforts of the shareholders who keep challenging them.
One shareholder asked Ms. Braly at yesterday’s tightly controlled and guarded meeting, as a sort of speakers’ “shot clock” counted down her speaking time, “Tell me, Ms. Braly, could you please explain what you do that warrants a salary ($13.5 million annually) that is more than 375 public school teachers in Indiana earn?” Braly’s answer was a classic. No shot-clock running for the CEO as she explained that the board sets her compensation and it has to be competitive with the other comparable giants in the insurance industry. It is a breathtaking demonstration of greed and hubris.
I wondered how we have allowed this country to amble onward to the point where 1,275 Americans who carry health insurance go bankrupt every single day (if the courts stayed open seven days a week) while an insurance company CEO like Angela Braly pockets $140,000 for her day’s salary. Every day.
That’s quite a lot of money that doesn’t go to healthcare. That’s quite a lot of money for one person to earn in one day. That may be why such scary guards are needed outside WellPoint shareholder meetings – they wouldn’t want CEO Braly to have to mix it up with any of the policyholders or others who might question too directly what value the for-profit health insurance industry adds to the U.S. healthcare system. I also wondered how much money those guards cost. And the shot clocks to keep pesky questions to a minimum? And how about the pro-Angela and pro-profit softball questions planted in the room?
WellPoint, like the other major insurance giants, can claim the best profits ever this year. Times are good at the top. Things are not so good for millions of Americans who want for decent healthcare within a system that provides a progressively financed, single standard of high quality care. Medicare for all would be nice. The American Health Security Act of 2011, S915/HR1200 as offered by Sen. Bernie Sanders, I-VT, and Rep. Jim McDermott, D-WA, provides a model for moving forward. Public financing (yes, a single payer system) coupled with public and private delivery (not a single provider). No insurance giants paying huge board compensations and CEO salaries. No armed guards protecting the profit.
Outside the City Market in Indianapolis, in the rain and with no need for guards, the advocates of healthcare sanity gathered – and I was thrilled to be among the Hoosiers for a Commonsense Health Plan. We affirmed our commitment to the work ahead and to one another. We sang. We are shareholders in a society that values more than profit – we value behaving justly and humanely, and we’d like a healthcare system that reflects that.
Forgive my repetition of the theme, but health insurance is not healthcare. Health insurance is a financial product. Health insurance is a financial product sold to protect health and wealth which may well do neither. Health insurance is a defective financial product for millions of people who made what we felt were responsible decisions about protecting ourselves and our families from financial or health disaster with health insurance products that have loopholes and flaws big enough to leave thousands dead every year and hundreds of thousands bankrupt.
I will never have the salary or earnings of insurance CEOs like WellPoint’s Angela Braly. That’s OK by me because I’ll also, I hope, never need guards to keep those I have harmed and those I would harm from questioning me about why. But, my life and the lives of my loved ones, my neighbors and my friends are surely as valuable in terms of access to healthcare in America in 2011. The day will come.
By: Donna Smith, CommonDreams.org, May 18, 2011
Health Care Reform in Massachusetts: State Model for the Affordable Care Act Is Working And Broadly Popular
The Affordable Care Act was signed into law one year ago. It is modeled in large part on the landmark Massachusetts health reform law enacted four years earlier in 2006. Opponents of the Affordable Care Act often attack it by distorting the facts about the Massachusetts experience. They selectively alternate between snapshots of and trends in Massachusetts and comparisons between Massachusetts and the United States.
The most appropriate way to assess the impact of the Massachusetts law is to compare changes over time in things like health coverage and premium costs in Massachusetts to changes over time in the United States as a whole. We use that approach below to debunk many of the myths opponents propagate regarding Massachusetts’s experience with health care reform.
Massachusetts increased health coverage while coverage declined in the rest of the country.
The Massachusetts law failed to significantly reduce the ranks of the uninsured in the state.
The Massachusetts health reform law dramatically increased the insurance rate in the state over a period when the national health coverage rate declined. As of the end of 2010, 98.1 percent of the state’s residents were insured compared to 87.5 percent in 2006 when the law was enacted. Almost all children in the state were insured in 2010 (99.8 percent). In comparison, at the national level the health insurance rate dropped from 85.2 percent in 2006 to 84.6 percent in 2010.
Employers continued the same level of health coverage in Massachusetts while dropping people in the rest of the country.
The Massachusetts health reform law is eroding employer-sponsored health insurance.
The number of people in Massachusetts with employer-sponsored health insurance has not dipped below 2006 levels since passage of the health reform law. Approximately 4.3 million people in Massachusetts obtained health insurance through their employer in 2006. This figure increased to 4.5 million in 2008 before returning to 2006 levels in 2010. In comparison, the number of nonelderly people in the United States with employer-sponsored health coverage declined from 161.7 million in 2006 to 156.1 million in 2009.
Since passage of Massachusetts’s health reform law, a larger share of the state’s employers have offered health insurance to their workers when compared to the United States as a whole. At the national level only 60 percent of employers offered health coverage to their employees in 2005. This is significantly lower than Massachusetts’s rate of 70 percent at that time. The Massachusetts rate increased to 76 percent in 2009, which is 7 percentage points higher than the national figure for 2010.
People buying insurance on their own in Massachusetts are paying lower premiums. Premiums in the nongroup market have increased in the rest of the country.
Massachusetts residents are paying higher premiums in the nongroup market as a result of the health reform law.
Nongroup health insurance premiums in Massachusetts have fallen by as much as 40 percent since 2006 because health reform brought healthy people into the insurance market. In contrast, at the national level nongroup premiums have risen 14 percent over that period of time.
More than 98 percent of Bay Staters met the law’s individual insurance requirement.
A significant portion of Massachusetts residents are ignoring the mandate and only purchasing health insurance when they need care.
The size of Massachusetts’s individual market more than doubled after passage of the health reform law. This boost and the accompanying drop in the average cost of individual premiums were due in part to more healthy—and previously uninsured—individuals entering the market. Only 1.3 percent of the state’s 4 million tax filers who were required to and did report their coverage status were assessed a penalty for lacking coverage in 2008, the last year for which complete data are available. About 26,000 of these 56,000 people were actually in compliance for part of the year.
The cost of health care in Massachusetts is in line with expectations.
The Massachusetts law is bankrupting the state.
The fiscally conservative Massachusetts Taxpayers Foundation, or MTF, finds that under reform, “State spending is in line with what [the organization] expected.” An MTF report released in 2009 found that state spending on health reform increased from $1.041 billion in fiscal year 2006 to a projected $1.748 billion in fiscal year 2010—an increase of $707 million over the four-year period, half of which is covered by the federal government.
Higher-than-expected enrollment in Commonwealth Care, the state-subsidized health insurance program, initially raised fears that policymakers had dramatically underestimated the number of low-income uninsured in Massachusetts. These concerns, however, were unfounded. Commonwealth Care enrollment peaked in mid-2008 with 176,000 members. The MTF attributes the initial rapid growth in Commonwealth Care enrollment to the state’s early success in getting residents signed up for the program.
The majority of people in Massachusetts like the health reform law, and it has gotten more popular over time.
The Massachusetts health reform law is highly unpopular among members of the public, the business community, and policymakers.
Support for the law is strong among members of the public. Sixty-one percent of the Massachusetts nonelderly population approved of the law when it passed in 2006. Two years later, 69 percent of nonelderly adults viewed the law favorably. In a survey of employers conducted in 2007—shortly after passage of the health reform law—a majority of Massachusetts firms surveyed agreed that “all employers bear some responsibility for providing health benefits to their workers.”20 A survey of employers conducted a year later—after the individual and employer mandates were implemented— found that a majority of firms believed the law was “good for Massachusetts.”
The Massachusetts health reform law was also a bipartisan achievement, drawing support from both sides of the aisle throughout the process. The law was passed by a Democratic legislature with support from its Republican members and then signed by GOP Gov. Mitt Romney.
Massachusetts is building on its 2006 reforms to promote better quality care at lower costs.
Current Gov. Deval Patrick is proposing to ration health care in Massachusetts.
Gov. Patrick’s proposal would make Massachusetts a leader in nationwide efforts to reform health care delivery and bring down costs. The governor has proposed new tools for achieving integrated care—by holding providers accountable for working with each other and their patients to coordinate and delivery higher-quality care at a lower cost.
These innovative tools encourage providers to deliver better care—replacing the current payment system’s set of incentives that provide more care regardless of value. Indeed, more care can sometimes be harmful to patients. Hospital-acquired infections and medical errors are among the most common causes of preventable deaths and injuries in U.S. hospitals. Medical errors accounted for 238,000 preventable deaths in Medicare and cost the program $8.8 billion from 2004 to 2006. A recent study found that sepsis and pneumonia caused by hospital-acquired infections resulted in 48,000 deaths in 2006 and cost the program $8.1 billion.
The Massachusetts health reform law is a success story from every perspective. The state has expanded health coverage to almost all of its residents, maintained a strong market for employer-sponsored health insurance, gained the support of the business community and the public, and is moving forward in containing costs. We can look forward to a similar positive experience across the nation as we implement the Affordable Care Act modeled in large part on the Massachusetts law.
By: Nichole Cafarella and Tony Clark, Center for American Progress, April 13, 2011