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“Blind To Every Human Virtue”: Mitt Romney And Bain Capital Create Their Own 47% “Victims”

Here’s the 47% Question: If the hedge fund founded by the Republican candidate for president buys a company in a small Midwestern town and then sends all its jobs to China, do those workers thereby become the “victims” Mitt Romney had in mind when he dismissed those who “do not take responsibility for their lives” because they are “dependent” on government?

That’s the situation facing 170 workers at an auto sensor manufacturing plant in Freeport, Illinois after a Bain Capital-owned company, Sensata Technologies, bought out their factory and then decided it would be cheaper to board up the plant and send its parts to China — but not before subjecting workers to the final humiliation of training their Chinese replacements.

In response, some workers have set up a camp across from the factory and are calling “Bainport” to protest the move, according to Dave Johnson at Truthout. Others have asked Mitt Romney to intercede on their behalf with his former company, foolishly taking Romney at his word that, as president, he would “get tough” with China and fight for every American job. Good luck with that.

It’s not as if the company is hurting for money. According to a company financial statement quoted by Johnson, Sensata’s net income last year was $355 million, up 16% from 2010. Its total revenues were $1.8 billion in 2011, up almost 19% from the year before.

Yet, Romney’s former colleague, Sensata board chairman Paul Edgerley, says Bain’s responsibilities to investors demands shuttering the Freeport plant and shipping operations to Asia.

Johnson says the layoffs will surely have a ripple-effect in this small town of about 25,000 that has only three principal employers and a poverty rate well above the national average. And so, Bain’s decision to move the plant to China is a dagger in the heart of this community, says Johnson, and represents “the epitome of corporate America’s lack of patriotism, [with] it’s capital unmoored from any sense of responsibility for the people that make the profits or the communities where they live.”

In moving the plant to China, Sensata is simply operating according to the business strategy mapped out for the hedge fund by Romney himself: Buy assets with little money down. Load them with debt. Raid their pension funds. Break their unions. Then “harvest them” for profits.

On that infamous video disrespecting the bottom 47%, Romney makes a dubious value judgment when he says individuals who are not resourceful or self-reliant enough to make it in the survival-of-the-fittest jungle created for them by cut-throat capitalists like those at Bain Capital are therefore “irresponsible” when they lean on others in hard times, especially when it’s the crutch of government.

That’s the same self-serving justification we hear from conservative economists like Charles Murray who ignore the consequences of globalization and technological change and blame instead the middle class for its own shrunken prospects when average Americans stray from the traditional family values and old-fashioned American work ethic Murray thinks is all that separates rich from poor.

Romney’s is an ethic that equates “morality” with “success.” This may help explain a presidential campaign that justifies egregious falsehoods and elaborate fabrications if they win Romney a point or two with a gullible public.

Newt Gingrich was right when he called out Romney during the Republican primaries as a “predatory corporate raider” who only pretends to be a real capitalist.

A real capitalist, said the original Austrian-school economist Joseph Schumpeter, would know that the fruits of the free market’s dynamic innovations could only be harvested by societies prudent enough to make provision for the victims of capitalism’s relentless change.

Schumpeter, Austria’s finance minister in 1919 and the originator of the famous phrase about capitalism’s “creative destruction,” believed public relief during Hard Times was “imperative on moral and social grounds” and also important to stabilize demand, writes Hans-Michael Trautwein.

“Schumpeter was in favor of unemployment relief as the best way to counteract the effects of the business cycle on workers’ welfare,” says Trautwein in a paper on the great economists’ views on unemployment.

Predators like Mitt Romney, in contrast, want to have their cake and eat it too. They want the benefits that go with destroying other people’s lives for their own profit but without the responsibility to pay the least in compensation.

A real capitalist concerned about the viability of a free market capitalist system in a democratic society would be far more alert to the caveats Schumpeter laid out. And the fact that Romney isn’t, as he speaks contemptuously of the victims his Bain Capital business model have created, exposes Romney as someone who cares little about the free market beyond his own ability to profit spectacularly from the very same unregulated and lightly taxed rigged system he would promote as president.

The irony of the rapacious worldview Romney shares with many in America’s plutocratic class is that it fails as both morals and economics. This is one reasonRomney’s peculiar brand of buccaneer capitalism has so often had to be rescued from itself.

How can it be possible, for example, that a company like Citibank could sell securities it knows to be toxic to one set of customers while at the same time betting on those very same securities to default – and then only getting a $285 million fine from regulators, which is a slap on the wrist considering the monstrous sums involved?

That is what New York Times columnist Thomas Friedman wants to know when he says of Citibank’s fraud” “It doesn’t get any more immoral than this.”

Romney complains about the 47% he says are parasites. Yet, as Friedman notes, “there is in our economy now a disconnect between pay and performance,” which is a fairly serviceable definition of “parasite” in my book.

Under the rules now in place, says Friedman, Romney’s Bain Capital can make tens of millions of dollars on firms it buys that go bankrupt. A bank like Citigroup can sell toxic securities to a hedge fund that loses hundreds of millions of dollars on the deal while Citigroup still makes $160 million in fees and trading profits betting against those same assets.

Despite the wrong turns it has taken in recent decades, Friedman still believes capitalism and free markets are the best engines for generating growth and relieving poverty — “provided they are balanced with meaningful transparency, regulation and oversight.”

What we’ve lost in the last decade, he says, is that balance. “And if we don’t get it back — and there is now a tidal wave of money resisting that — we will have another crisis. And, if that happens, the cry for justice could turn ugly.”

Mitt Romney sells himself as a successful businessman who “knows” how to create jobs because he “understands” what it takes because Romney himself is rich. In place of policy, in other words, all that Romney has to offer is biography.

Mitt Romney wants to be our president. Yet as Chrystia Freeland reminds us, Romney embraces a “ravage capitalism that is loyal to no nation-state and blind to every human virtue but profit” – a win-at-all-costs ethos that has a familiar, if dangerous, pedigree among history’s self-destructive ruling classes.

What separates successful states from failed ones, says the author of Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, are governing institutions that are either inclusive or extractive.

Extractive states are those controlled by ruling elites whose sole objective is extracting as much wealth as they can from the rest of society, says Freeland, while inclusive states “give everyone access to economic opportunity.”

Greater inclusiveness creates more prosperity which, in turn, creates an incentive for ever greater inclusiveness, says Freeland

Elites themselves prosper from these inclusive systems, says Freeland, but there also comes a time when these elites face the self-destructive temptation to pull up the ladder behind them once they’ve extracted wealth from the broader community “to such a degree that the society becomes dysfunctional and mired by social problems.”

Marx’s famous warning about capitalism containing the seeds of its own destruction may be the danger America faces today, says Freeland, as the 1% percent “pulls away from everyone else” by cannibalizing the broad Middle Class Republic that America has built up since the Second World War — with its public investments in education, infrastructure, basic research and development and health and retirement security — and as these elites pursue “an economic, political and social agenda that increases that gap even further and ultimately destroys the open system that made America rich and allowed its 1 percent to thrive in the first place.”

This is the absurdity of Mitt Romney’s comment about the 47% who are “dependent upon government,” says Freeland, since it’s those at the “top of the economic pyramid who have been most effective at capturing government support — and at getting others to pay for it.”

Today’s super-rich may be different from you and me but they are no different from their plutocratic predecessors throughout history, says Freeland.

“Now, as then, the titans are seeking an even greater political voice to match their economic power,” she writes. “Now, as then, the inevitable danger is that they will confuse their own self-interest with the common good. The irony of the political rise of the plutocrats is that they threaten the system that created them.”


By: Ted Frier, Open Salon, November 3, 2012

November 4, 2012 - Posted by | Election 2012 | , , , , , , , ,


  1. […] “Blind To Every Human Virtue”: Mitt Romney And Bain Capital Create Their Own 47% “… ( […]


    Pingback by What you need to know: What does Bain/Romney own? $67 Billion? « lara harlow-hentz | November 6, 2012 | Reply

  2. Reblogged this on Ye Olde Soapbox.


    Comment by Michael B. Calyn | November 5, 2012 | Reply

  3. Reblogged this on angrymanspeaks and commented:
    As usual; mykeystrokes has given us something to think about. It is a fairly complex discussion of the potential for Capitalism to destroy itself via Romney’s corporate Piracy. AMS


    Comment by angrymanspeaks | November 4, 2012 | Reply

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