2012: From Wall Street to the White House
Published in Le Figaro
(France) on 11 December 2011
by Jean-Sébastien Stehli (link to original)
Paul Krugman raises a question that few people have given much thought to: Could Oliver Stone's film, “Wall Street,” prove to be a premonition? Twenty-five years after its release, the Republican Party is close to choosing its own hero of Wall Street, Mitt Romney, to represent them in the White House race. For a country that came close to a total banking disaster due to the greed of financial institutions, this could cause quite a reversal of the current situation.
For Krugman, the similarities between Romney and Gordon Gekko, who coined the slogan "Greed is good," are striking. Romney, who managed the investment branch of Bain Capital from 1984 to 1999, might agree with the statement made by Michael Douglas's character: "I create nothing. I own."
The new politically correct, that is to say those who want to lead the conservatives, refrain from criticizing the rich, the 1 percent, under the pretext that the rich create jobs and wealth for the other 99 percent. "The fact is," writes Krugman, "that quite a few of today’s wealthy got that way by destroying jobs rather than creating them. And Mr. Romney’s business history offers a very good illustration of that fact." **verified**
The Los Angeles Times has certainly interested itself in Romney's career at the head of Bain Capital, in an attempt to find out how many jobs the private equity firm he founded and led had created. Surprisingly, while Romney's fortune grew to $250 million over 15 years, the employees themselves lost their jobs by the hundreds. The goal of investment companies like Bain is to make money for their investors, not to create jobs. In leveraged buyouts, companies are bought with loans guaranteed by company assets. Then they maximize profits by reducing costs, especially the costs of employee salaries. "Mr. Romney made his fortune in a business that is, on balance, about job destruction rather than job creation," Krugman notes. According to the Los Angeles Times, which has studied the 10 biggest buyouts by Bain under Romney's leadership, four companies eventually went bankrupt while their leaders received very substantial packages.
For example, GSI Industries went bankrupt, laying off 700 employees and ending their retirement and health benefits, while the executives received $65 million. Greed is good, as Gekko has said. Yet now Romney is explaining to Americans that he will create jobs if he is elected to the White House. We would laugh, if such cynicism and hypocrisy (not to mention lies) were not at the expense of American citizens. Instead, we should adopt another of the cultish Gekko phrases spoken to his young partner: "Now you're not naive enough to believe that we’re living in a democracy, are you, buddy?" **verified**
For Krugman, the similarities between Romney and Gordon Gekko, who coined the slogan "Greed is good," are striking. Romney, who managed the investment branch of Bain Capital from 1984 to 1999, might agree with the statement made by Michael Douglas's character: "I create nothing. I own."
The new politically correct, that is to say those who want to lead the conservatives, refrain from criticizing the rich, the 1 percent, under the pretext that the rich create jobs and wealth for the other 99 percent. "The fact is," writes Krugman, "that quite a few of today’s wealthy got that way by destroying jobs rather than creating them. And Mr. Romney’s business history offers a very good illustration of that fact." **verified**
The Los Angeles Times has certainly interested itself in Romney's career at the head of Bain Capital, in an attempt to find out how many jobs the private equity firm he founded and led had created. Surprisingly, while Romney's fortune grew to $250 million over 15 years, the employees themselves lost their jobs by the hundreds. The goal of investment companies like Bain is to make money for their investors, not to create jobs. In leveraged buyouts, companies are bought with loans guaranteed by company assets. Then they maximize profits by reducing costs, especially the costs of employee salaries. "Mr. Romney made his fortune in a business that is, on balance, about job destruction rather than job creation," Krugman notes. According to the Los Angeles Times, which has studied the 10 biggest buyouts by Bain under Romney's leadership, four companies eventually went bankrupt while their leaders received very substantial packages.
For example, GSI Industries went bankrupt, laying off 700 employees and ending their retirement and health benefits, while the executives received $65 million. Greed is good, as Gekko has said. Yet now Romney is explaining to Americans that he will create jobs if he is elected to the White House. We would laugh, if such cynicism and hypocrisy (not to mention lies) were not at the expense of American citizens. Instead, we should adopt another of the cultish Gekko phrases spoken to his young partner: "Now you're not naive enough to believe that we’re living in a democracy, are you, buddy?" **verified**
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