Why Cory Booker Got Bain Capital So Wrong
Wall Street has invested heavily in his career
But the mayor's feelings must be influenced by his own relationship with Wall Street, private equity and Bain. America's financial titans have been very, very good to him.
Although Booker undoubtedly knows that Bain is fair game—as he later acknowledged, going so far as to accuse Bain co-founder Mitt Romney of "not being completely honest" about job creation there—his initial remarks were obviously sincere. He tried to equate negative advertising about Bain with the Republican disinterment of the embarrassing Rev. Jeremiah Wright, and went on to denounce the impact of "this unbelievable amount of campaign cash that's eroding, in my opinion, the democracy, but more important, pulling our campaigns in the gutter."
Even a cursory examination of Booker's own political history shows, however, that he has never hesitated to use negative advertising against his opponents, when necessary—and that his own remarkable rise to power in Newark was funded by overwhelming infusions of cash to pay for those ads.
Wall Street, Private Equity Donors
The first time Booker ran for mayor, when he lost in 2002, he was heavily outspent by then-Mayor Sharpe James—later sent to prison in a federal corruption probe—but Booker managed to raise and spend almost $2 million, much of which he used on ads attacking the incumbent. Four years later, thanks in part to Street Fight, a superb documentary film about the first race that might be considered the longest negative ad in history, Booker won easily, with a massive $6 million war chest against a struggling opponent who raised less than $200,000.
When Booker ran for his second term in 2010, facing only token opposition, he raised more than $7.5 million, largely from the same Wall Street and private equity financiers that have always been his primary source of outside support. Glancing at his campaign filings from that race, it is easy to find not only major donors from Bain and other private equity firms, but also big Romney backers such as Julian Robertson of Tiger Capital Management and Paul Singer of Elliott Management, each of whom has given the Republican candidate at least $1 million in this cycle. Both Robertson and Singer gave the maximum $26,000 to Booker's campaign.
Among the Bain Capital donors to Booker's 2010 campaign were Joshua Bekenstein, who also gave the maximum $26,000, and Jonathan Lavine, who gave $25,000. Other top donors included members of the Curry family, who run Eagle Capital Management (and close relatives of Marshall Curry, the director of Street Fight) and gave a total of $78,000. The full list also includes large donations from executives at Goldman Sachs, Citigroup and Morgan Stanley.
Surely Booker is aware of the costs as well as the benefits of private equity—and its mixed record as an engine of job creation. He is far too smart and experienced to misunderstand private equity's true purpose, which is to create wealth, not employment. And Booker certainly knows that when Romney presents himself as a businessman who can revive America's fragile economy, it is fair to mention how Bain profited from loading up companies with debt and ripping off the proceeds while laying off thousands of workers.
But whatever he says about capital, the Newark mayor also knows that it takes a lot of money to win public office, like the U.S. Senate seat that may be in his future. What everyone else should know is that he expects to raise that campaign money from the same people and firms that have backed him from the beginning.
Henry Decker contributed to this column.
© 2012 Creators.com
But, for every dollar we get, some CEO or shareholder is going to get 10, 100, or 1000 times what we are getting. IS that what you will accept as part of the bargain?
We want growth of OUR wealth, more stuff and the free time to enjoy it. What we have instead is growth of bank balances, especially to the top 0.1%. Wealth is not being "created" as fast as money is. While money is "created", wealth is simply "moved", controlled by those who posses those big money numbers. Soon the will try to convert that bank balance to hard wealth, and leave us with the IOUs.
I hear all kinds of arguments that we simply need smaller government, but none of those people seem to complain about businesses getting bigger. Look at all the corporate buyouts, the Merger and Acquisitions. What happens when business is not only "too big to fail", but more realistically "too big to control"? A large and benevolent democratic government will serve us better than a large single owner controlled business.
We had a Constitutional system of checks and balances, but that only applies to government, an attempt to keep it from getting corrupt. Where are the checks and balances in Private life? That was labor unions vs business owners, government regulations vs well-organized, well-funded business.
What are big venture-capital / business-repair companies like Bain all about? It should be obvious - they got the cash to play the game. Swoop in and buy up a controlling interest of some publicly traded companies that you think you know and understand. Get into their books, study them, and compare them to their peers in other places... Then you make changes to them!
You will see that some are doomed to fail because they just happened to be located in an area that ran out of resources or politics has now made unprofitable, you split them up and milk out the liquid assets, sell off the capital property that can be sold, shut down the labor operations in that "bad region", or their local management screwed up, failed to hire the right people. Those MONEY assets are then freed up, made available to invest elsewhere where the opportunities are better. At no time is "relocation of the displaced paychecks" ever going to matter, all companies are supposed to have their business knowledge and skills documented on paper, easily transferred to low-paid people that can follow instructions... with a smile and no complaints.
Other companies have found "good luck". The politics made the region more profitable, or attracted the "right people" to work there. Resource rich, education rich, or transportation rich to get the resources to the "good" workers, companies that have managed themselves properly, did the PM work to keep their stuff working, not driving it into the ground like a temporary, short-term thing to "use up". Sometimes you see a company that has a long, bright future ahead of them, and investing more money into them to build them even larger or more efficient is what you will do for them.
Others, you can see are profitable now, but the future is limited, how do you set them up to maximize your profits, and then shut them down at just the right time? Loyalty to the workers that were loyal to you? Does it really matter when you are in a corporate high-rise and do not even know those workers? They hire the upper level managers and intermediary execs so they do not have to get to know their workers, that's why Romney is out-of-touch.
We don't need more "Business Leaders" in government, they just server their business cronies... "Get the competition before they get us!" We need a leader that can use business for the public good. And I don't mean "use" them to throw their capital and workers away, I mean lead them agreeably to build a better, sustainable tomorrow. A place for every worker AND citizen, allow every citizen and worker in their teamwork-valued place.