Thursday, January 12, 2012

Bain, Romney, and Huntsman

Tweet of the week, as far as I'm concerned:

Dan McLaughlin
Hey, guess what company was once rescused by vulture investors? Huntsman Corp. 

I heard snippets from Newt Gingrich's Bain Capital movie. It literally sounds like a Mondale-Ferraro ad produced by Roger and Me era Michael Moore. Lots of scary music, lots of quavering-voiced folks (most of them senior citizens) talking about how Bain Capital came to town and closed down the factory/mill/rendering plant/etc, plus occasional snippets from Romney speeches taken so wholly out of context as to sound like broadcasts from Mars. Newt really should be embarrassed. 

The problem for Bain, and for Romney, isn't that they were "vultures." (caw!) It's that they came in after businesses either failed or ran into problems that proved difficult or insurmountable. Every failure has a story behind it. Markets change. Regulatory burdens increase. Unions drain profits. Patents expire. Sometimes, companies just ossify. Sometimes you can't even finger a particular villain. If you read the Forbes article McLaughlin links to, you'll learn that Huntsman Corp. was nearly bankrupted by sudden, unexpected increases in their raw materials costs. Huntsman pere was urged to file for bankruptcy, but was too proud to do so, and instead worked with a private equity firm to buy out his debt in exchange for a 49% equity position. Did people lose their jobs? Dunno, but everyone would have lost their jobs (or at least would have been on the chopping block) had the company been liquidated. 

Bain's targets were already on the ropes. Bain was there to try to spin gold out of lead, to make lemons out of lemonade. That's not Mitt Romney's fault, and it's not worthy of an attack from a purported conservative. 

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