From Pine View Farm

Romney’s Bain 1

Jacob Weisberg takes an intense look at the leveraged buy-out industry (AKA vulture capitalism), which makes money by gutting companies, and how it differs from industrial capitalism, which makes money by building companies.

A nugget:

Mr. Romney’s Bain career is a story about rising inequality. It’s telling that George Romney, Mitt’s father, made around $200,000 through most of the years he ran American Motors. Doing work that clearly created jobs, the elder Romney paid an effective tax rate that averaged 37 percent. His son made vastly more running a corporate chop shop in an industry that does not appear to create jobs overall. In 2010, Mitt Romney paid an effective tax rate of 13.9 percent on $21.7 million in investment income.

This difference encapsulates the change from corporate titans who lived in the same world as the people who worked for them, in an America with real social mobility, to a financial overclass that makes its own rules and has choked off social mobility. The elder Romney wasn’t embarrassed to explain what he’d done as a businessman or to release his tax returns.

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1 comment

  1. George Smith

    August 16, 2012 at 3:37 pm

    This is an especially interesting point because Romney the Younger’s style of corporate capitalism, if applied when his dad was boss, would have called for American Motors to be looted and then destroyed. I remember it as the ugly duckling of American car manufacturers, famous for a regular series of laughable and almost laughable designs, the Pacer and the Gremlin. I have a hard time seeing Mitt Romney being for anything but liquidate for a company that made the Nash Rambler. I do remember a friend dearly loving his Javelin and my ex-wife had what a Hornet, which she called the ‘s— mobile.’