Matt Taibbi goes into detail about how Romney made his fortune at Bain, what kind of tactics he used, and how this model of business has taken over the American economy. As Taibbi points out, America is no longer a nation that makes things, it simply makes money. Lots of it. For not a lot of people. Our manufacturing and infrastructure have become neglected as more and more of our sharpest business minds flood to Wall Street and drop their greed straws into the perpetual money machine to suck out their fortunes.
It has been this way, or at least approaching this way, for a long time. Back in the 80's, there was a change in our business model as manufacturing became less important and we started opening up to foreign trade. Then came NAFTA, and the era of free trade. Now, America could get cheaper products that were produced in other countries. Places like Wal-Mart overtook mom-and-pop stores nationwide who couldn't compete with a large corporate business that could sell things cheaper than the small stores could buy them. The mantra of "Made in the USA" lost its meaning as people starting buying cheap, buying a lot, and giving less. Our economy might have slowed, wealth might have dried up, jobs might have been lost (in fact, many were) if not for the Wall Street folks who simply took all that trade and economic activity and turned it into risky investments.
Companies like Bain Capital became prominent as ways for companies to restructure for the new era of business. Romney and his associates started "helping" businesses streamline to a 21st Century kind of business model. Of course, those companies never realized that Romney and his friends were one step ahead of them, and had seen the decline in labor and the rise in investment and trading as an opportunity to reap millions. As Taibbi explains, their plans went like clockwork: They would buy a company, dump loads of debt into it, then force them to cut jobs and pay, all while paying Bain for this service. Romney made his millions, and thousands made it onto the unemployment rolls.
But the story of Bain is not unique, nor is it over. We may not be seeing the wholesale dismantling of entire companies for personal gain on a regular basis, but it does happen, and the move towards investment wealth and away from production wealth continues. We no longer build things for ourselves; we import. What we do make here goes abroad. We are approaching a point at which we will have a product-less economy.
Sure, that might seem strange, but it's not that far off from our current trend. In 2008, when the economy tanked, companies dumped jobs. Some of those companies, not to mention Wall Street itself, got bailed out by Bush and then Obama. Those companies used that money to, wait for it.....invest. Granted, they also paid their CEO's big bonuses, and they paid back some debts, and they used some to grow their business, but they added back almost none of the jobs that they cut. The rest of that money went into investment portfolios where its been paying back dividends ever since. And why did these companies choose to do this? Because they saw the writing on the wall, and knew that American manufacturing was dying. This allowed them to diversify where they got money from, and how they chose to move that money.
There will always be things that America makes. We will always grow and sell food. We will always build cars. There will always be construction workers, road workers, plumbers, architects, and so on. But I don't foresee a time when Wal-Marts will be stocked with American products, or cars on the road will be exclusively American made. We're going in the other direction, at least for now, and believe we will see more changes in how American companies do business going forward than we have seen of this trend so far. Romney was a harbinger of this new way of doing business, and I doubt very much that his presidency will stop or stall its continued progress.