Politics & Policy

Mitt Romney, Vampire?

Screenshot from Team Obama’s “vampire capitalism” ad
The attacks on Bain Capital meet the low standards of the Obama campaign.

Mitt Romney went into the wrong line of work. If only he had been a lecturer in constitutional law, he wouldn’t have a business record vulnerable to distortion by a desperate incumbent president.

Barack Obama’s hands, in contrast, are clean. He taught at the University of Chicago Law School and didn’t make the mistake of attempting to start, acquire, or turn around companies. He has no business failures because he has no business successes — if you don’t count selling books about himself to the adoring multitudes.

The president’s reelection campaign is out with a scorching advertisement hitting Romney for one of Bain Capital’s flops, a steel firm that it bought and that eventually went under. This is an instance, according to one of the former steelworkers appearing in the ad, of “vampire” capitalism. The nefarious Romney swooped down on the thriving company and drained it of its life force. If it were a business-school case study, it could have been authored by Bram Stoker.

Or so we’re told. GS Industries is hardly the morality tale the Obama reelection campaign makes of it. Bain Capital didn’t acquire the company to drive it into the ground for fun and profit. Bain wanted to make it work — despite its outdated equipment, union strife, and punishing competition, foreign and domestic. Bain failed, but not for lack of trying over the course of seven years.

#ad#Soon after Bain acquired the steel company in 1993, it announced a $98 million plant modernization and merged with another firm to form, in the words of a Reuters report, “one of the largest mini-mill steel producers in the U.S.” This is a funny way to go about deliberately destroying a company. Bain loaded the firm up with debt and took out a dividend, but it reinvested part of the dividend in the operation. It reportedly spurned a potential offer to buy the firm around the end of 1997.

All the effort went for naught. The management proved incompetent. Cheap imports undercut prices. And the firm was unionized, a factor common to steel companies that couldn’t survive the new low-cost environment.

GS went bankrupt in 2001 (two years after Romney left Bain, as it happens). It was a messy affair, with the U.S. Pension Benefit Guaranty Corp. picking up the pieces from the company’s underfunded pension fund. GS’s experience wasn’t unusual, alas. Dozens of steel companies died in the same period, including the iconic Bethlehem Steel. If the workers at GS had never heard the name Mitt Romney, there is still a good chance they would have been out of jobs.

Employment in the steel industry has undergone a historic contraction. From 1980 to the beginning of the new century, the steel industry in the United States lost more than half its workers. Japan and Germany also experienced declines in employment, as advances in productivity made it possible to produce more with fewer people. Far from causing this trend, Bain was trying to find a way to ride it out. 

Where it failed with GS, it succeeded with Steel Dynamics. In the mid-1990s, Bain invested in and raised capital for the technologically innovative mini-mill that became one of the largest U.S. steel companies. Bain eventually sold its stake in 1999, making a massive return for its investors, while Steel Dynamics is now generating $6 billion in revenue and employing more than 6,000 people. If this were a government-subsidized green-energy project rather than the inspired work of imaginative executives and sharp-eyed financiers, President Obama would have already given a celebratory speech at its plant.

Even if the Obama account of GS were fair (it’s not), it’s dishonest to discuss it without connecting it to Steel Dynamics and the larger context of private equity’s role in the creative churn of American capitalism. Cheap and unworthy, all that can be said about the attack on Bain is that it meets the standards of the Obama reelection campaign.

— Rich Lowry is editor of National Review. He can be reached via e-mail: comments.lowry@nationalreview.com. © 2012 by King Features Syndicate

Rich Lowry is the editor of National Review. He can be reached via email: comments.lowry@nationalreview.com. 

Most Popular


Put Up or Shut Up on These Accusations, Hillary

Look, one 2016 candidate being prone to wild and baseless accusations is enough. Appearing on Obama campaign manager David Plouffe’s podcast, Hillary Clinton suggested that 2016 Green Party candidate Jill Stein was a “Russian asset,” that Republicans and Russians were promoting the Green Party, and ... Read More

Feminists Have Turned on Pornography

Since the sexual revolution of the 1960s, the feminist movement has sought to condemn traditional sexual ethics as repressive, misogynistic, and intolerant. As the 2010s come to a close, it might be fair to say that mainstream culture has reached the logical endpoint of this philosophy. Whereas older Americans ... Read More
White House

The Impeachment Defense That Doesn’t Work

If we’ve learned anything from the last couple of weeks, it’s that the “perfect phone call” defense of Trump and Ukraine doesn’t work. As Andy and I discussed on his podcast this week, the “perfect” defense allows the Democrats to score easy points by establishing that people in the administration ... Read More
PC Culture

Defiant Dave Chappelle

When Dave Chappelle’s Netflix special Sticks & Stones came out in August, the overwhelming response from critics was that it was offensive, unacceptable garbage. Inkoo Kang of Slate declared that Chappelle’s “jokes make you wince.” Garrett Martin, in the online magazine Paste, maintained that the ... Read More
Politics & Policy

Elizabeth Warren Is Not Honest

If you want to run for office, political consultants will hammer away at one point: Tell stories. People respond to stories. We’ve been a story-telling species since our fur-clad ancestors gathered around campfires. Don’t cite statistics. No one can remember statistics. Make it human. Make it relatable. ... Read More
National Review


Today is my last day at National Review. It's an incredibly bittersweet moment. While I've only worked full-time since May, 2015, I've contributed posts and pieces for over fifteen years. NR was the first national platform to publish my work, and now -- thousands of posts and more than a million words later -- I ... Read More