It wasn't Bain and it wasn't me. But dear, loyal friends of mine pretty much lost everything but the roof over their heads when Wall Street vulture capitalists swooped in on an Ohio manufacturing company, gutted it, cashed out to the insiders and left the company and its employees to rot in the ditch.
We came to know these wonderful people years ago when our respective daughters attended high school and danced at the same studio, becoming best friends to this day. The Dad was a career telecommunications pro running sales for the entire Southwestern United States and pulling down six figure commissions on sales of electrical power equipment to the cell phone industry. The company he worked for was an off-shoot of old line manufacturing plants in Ohio and ownership was closely held. Business was robust and profitable and the Clinton boom was in full bloom. During Spring Break just before 9/11, our families vacationed together abroad.
It was the next year when Wall Street manipulators got the ear of insider shareholders the Ohio manufacturing company and convinced them that taking the company public would enrich them beyond the dreams of avarice. My friend was not one of these insiders, although the company did dangle some options in his compensation package.
My friend had been brought on board the company because he knew the industry, knew the region, knew the product and was a natural born salesman. He made millions for his employer. Times were good and product demand was high.
The IPO popped. Wall Street took its cut off the top and the company insiders cashed out. The infusion of market capital facilitated larding the company up with other debt in order to make all the pay-offs. The IPO fizzled. Sales moved from reliance on good service and knowledgeable personal contact to reliance on telephone boiler rooms cold calling purchasing departments. Sales plummeted. The business foundered and the plants closed down. My friend joined the ranks of the middle-aged, over-qualified unemployed American workers where he remains to this day.
We live in a world where doing this sort of thing to an enterprise and the people who rely upon it isn't illegal. Instead, this is how our business schools teach people to do it. And speaking of Mitt Romney, the Governor claims that his way of looking at things will help solve the problems facing America. But the way Mitt Romney, and those like him, look at things isn't the solution to anything. It is the problem.