[D66] The Obama campaign and “vampire” capitalists

[Antid Oto]

The Obama campaign and “vampire” capitalists
16 May 2012

With a display of cynicism that is hard to top, the Obama reelection campaign on
Monday launched a public attack on Republican Mitt Romney’s role as a
job-destroying asset stripper at Bain Capital, the same day that Obama raised
more than $2 million from equally rapacious private equity sharks at a reception
in New York City.

The Obama campaign released a two-minute advertisement that will run in five
closely contested states—Colorado, Iowa, Ohio, Pennsylvania and
Virginia—beginning Wednesday. It focuses on Bain Capital’s 1993 purchase and
eventual closure of a steel mill in Kansas City, Missouri.

The company, GST Steel, went bankrupt in 2001 and was closed down, with all 750
workers losing their jobs, while Bain walked away with a $12 million profit. One
of the fired steelworkers interviewed for the Obama commercial calls Bain a
“vampire” that “came in and sucked the life out of us.”

This description of Romney—CEO of Bain Capital at the time of the takeover—is
certainly appropriate. But the term “vampire” could be applied with equal
justice to most of those who gathered at the Manhattan home of Hamilton “Tony”
James, president of Blackstone Group, a private equity firm that dwarfs Bain
Capital in size and destructiveness.

Sixty people from Wall Street attended and donated $35,800 each to the Obama
reelection campaign and the Democratic National Committee, for a total of more
than $2 million.

Romney’s record at Bain Capital is a demonstration of the parasitic role of
finance capital, which mobilizes vast resources to take over, reorganize and
downsize companies. It is part of a process, extending over more than three
decades, in which Wall Street has garnered an ever-larger share of corporate
profits through financial manipulations unrelated and inimical to the
development of the productive forces.

The Obama campaign’s critique of Romney is completely hypocritical, however,
since the Democratic Party is just as beholden to the financial aristocracy as
the Republicans. As deputy campaign manager Stephanie Cutter told the Wall
Street Journal, in attacking Romney, Obama was not “questioning private equity
as a whole.”

Blackstone Group is a good example. Its co-founders, Steven Schwartzman and
Peter Peterson, amassed personal fortunes far in excess of Romney’s. They
garnered $3 billion to $4 billion each, compared to $250 million for the former
Massachusetts governor. Not only is Blackstone a far more influential player on
Wall Street, its top executives wield a vast, and reactionary, influence in
Washington.

Peterson in particular has long been identified with the program of budgetary
austerity, focused on massive cuts in social spending, including entitlement
programs like Social Security, Medicare and Medicaid. He has personally funded
Washington think tanks to develop policy recommendations along these lines and
lobby for them among Democratic and Republican politicians.

The Wall Street fundraiser Monday night came only hours after Obama offered his
personal endorsement of the performance of JPMorgan Chase CEO Jamie Dimon, after
the Wall Street bank acknowledged a $2 billion loss from speculative trades in
derivatives by its London office. “JPMorgan is one of the best managed banks
there is,” Obama gushed. “Jamie Dimon, the head of it, is one of the smartest
bankers we’ve got.”

Obama tapped another key figure in private equity, Steven Rattner, to serve as
his auto industry czar, overseeing the bankruptcy reorganization of General
Motors and Chrysler that restored the two companies to profitability at the
expense of the jobs, living standards, health benefits and pensions of auto
workers and retirees. The auto bailout centered on an across-the-board 50
percent cut in starting pay for new-hires that set the pace for wage-cutting
throughout American industry.

Rattner publicly criticized as “unfair” the Obama campaign ad attacking Romney
and Bain Capital. “Bain Capital’s responsibility was not to create 100,000 jobs
or some other number. It was to create profits for its investors,” Rattner said.
“I don’t think there’s anything Bain Capital did that they need to be
embarrassed about.”

The demagogic claims of Obama and the Democrats to defend the interests of
“working families” and “Main Street” against Wall Street are absurd on their
face. As they collect cash from the likes of Blackstone and issue fawning
tributes to social criminals like Jamie Dimon, one can only say: by their
friends ye shall know them.

Patrick Martin

The author also recommends:

The Bain Capital debate
Mitt Romney, Bain Capital and American capitalism
[18 January 2012]

The lamentations of the rich
[22 December 2011]

The Blackstone IPO: $4 billion payday for private equity bosses
[25 June 2007]

http://wsws.org/articles/2012/may2012/pers-m16.shtml