Thursday, January 26, 2012

The Bain Identity

Mitt Romney has been criticized from both left and right as a "flip-flopper." Someone who will say whatever needs to be said in order to move ahead politically. He will say whatever he needs to say in order to get nominated, then say what he needs to say to get elected, and then say what he needs to say to govern. All without any real commitment or sincere belief.

When he ran for governor of Massachusetts, he ran as a moderate and he governed as a moderate, and now that he's running for president in a conservative Republican field he's running as a conservative. In the general election, running against Obama, he'll portray himself as a moderate, and who knows how he would govern?

What doesn't seem to have gotten much press is that Romney ran Bain Capital the same way.

According to this piece in the Washington Post, written by an investment banker who often dealt with Bain Capital while Romney was in charge, Bain Capital had a nasty habit of doing what might be called a "bait and switch." In a private offering, the firm that makes the highest initial bid gets favored position to negotiate the final deal. Bain would make the high bid, eliminate the competition, and then use its favored position to negotiate the price down below its original bid. Some renegotiation is normal when new conditions are discovered on "due diligence" (closer scrutiny), but Bain negotiated downward too often and too flagrantly.

In other words, Bain would say what it needed to say in order to get a favorable negotiating position, and then change its price once it had the position it wanted and the other side was at a disadvantage.

This is what some people would call "gaming the system," and what other people would call "dishonest."

If this description of Bain Capital is correct, then "flip-flopping" is not a fluke of Romney's political career. It is a fundamental character flaw of the man. He lacks integrity.

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