I realize I’m not walking any new intellectual ground here, but I couldn’t read today’s cover story on Bain Capital’s pillage of Dade International and not reflect that capitalism, unrestrained by some type of social conscience, is a disease on human society. It is, in fact, the exact opposite of what Ayn Rand spent her life claiming it to be.
Bain’s takeover of Dade International, a medical supply company, ended up costing 1,700 people their jobs, saddled the company with debt and bankruptcy, and earned Bain $242 million — eight times more than its $30 million original investment:
Bain and a small group of investors bought Dade in 1994 with mostly borrowed money, limiting their risk. They extracted cash from the company at almost every turn — paying themselves nearly $100 million in fees, first for buying the company and then for helping to run it. Later, just after Mr. Romney stepped down from his role, Bain took $242 million out of the business in a transaction that, according to bankruptcy documents and several former Dade officials, weakened the company.
Cost-cutting became a mantra inside the company. After his employer, DuPont, was bought by Dade, William T. Mowrey, a field engineer, said his generous pension plan was replaced by a 401(k); his salary was cut by $1 an hour, costing him $2,000 a year in income. When he filed for overtime, he said, his new bosses refused to pay it. “They were just trying to milk as much out of us as they could,” he said.
Mr. Mowrey, now 54, quit. Many workers, like Mr. Shoemaker, the Dade employee in Westwood, and his wife, a temporary employee at the same plant, did not leave on their own terms. When they lost their jobs in 1997, they had to abandon plans to buy their first home together. “It created a lot of stress,” said Mr. Shoemaker, 59, who had earned more than $80,000 a year.
They were the lucky ones:
For some, the emotional effects of the layoffs outweighed the financial repercussions. Soon after Dade bought the DuPont unit, it closed a plant in Puerto Rico; all but a few of its nearly 300 workers were laid off.
Arsenio Muñiz Rosado, a 51-year-old father who had spent 23 years at the plant, starting out as a groundskeeper, sank into a debilitating depression. Still jobless six months after he was let go, he tried to commit suicide with a bottle full of Xanax pills. It was the first of several attempts.
For all intents and purposes, he said of the plant, “I died in there.”
Cindy Hewitt, a human resources manager, had been instructed to persuade about a dozen of Mr. Rosado’s co-workers to move to Miami, where Dade had another plant.
Not long after the workers arrived, the company said it would close that factory, too. Ms. Hewitt tried to help several workers return to Puerto Rico, but she said Dade insisted that they first repay thousands of dollars of moving costs. “They were treated horribly,” she said. “There was absolutely no concern for the employees. It was truly and completely profit-focused.”
Ms. Hewitt said she was so disillusioned by the experience that she left the corporate world.
This is the raw, unfettered capitalism of the sort Mitt Romney and America’s ownership class not only practices but heralds as the standard by which we should measure all else. It’s the brand of capitalism that Gov. Bill Haslam espouses. It’s what people mean (intentionally or not) when they say “government should be run like a business.”
It’s a betrayal of the very people who are the backbone of our economy and our society: the middle class. Bain Capital and companies like them — the “fighter pilots of capitalism” — are vampires. They seek out the treasure in the business landscape, extract the wealth, and leave the corpse of whatever company they sucked dry to rot in the gutter of the American economy. Bain octupled its investment but left 1,700 people out of work, and even more with slashed salaries and pensions. These are people who can’t pay their mortgage or their kids’ college education, or can’t take that family vacation or buy their first home. Think of all that implies for the economy at large and you begin to understand why we find ourselves in our current mess today. But what does Bain Capital care? They sucked the meat from Dade’s bones, deposited it in their bank account, and moved on.
This is capitalism devoid of morality. And this is what Republicans and far too many Democrats have been selling us for far too long. And, if anyone wants to know, this is why the 99% movement has resonated with the average American. When profits are valued over people, over and over again, this is the result.
How ironic that Cindy Hewitt, Dade’s human resources manager, got so disillusioned by her whole experience that she left the corporate world completely. Ms. Hewitt just got a look at what value the corporate world places on this “resource” called the work force. And that would be: nil. I’ve said it here a thousand times before but it bears repeating: if our society truly valued people, if we really thought of humans as a “resource,” we wouldn’t treat people like trash. We wouldn’t devalue them at every turn.
I was musing about the need for a more realistic counterpart to Atlas Shrugged — call it Atlas Stumbled, if you will. An engaging piece of fiction where the human collateral damage of the rapacious Galts and Dagnies is revealed. But of course we don’t need this fictionalized work, the real thing is in the news every day. Or, if you must have fiction, try Harriet Arnow’s The Dollmaker or John Steinbeck’s The Grapes Of Wrath.
I’m not an anti-capitalist in toto, I’ve benefitted tremendously from capitalism in my life, and still do. But for capitalism to fully work for the benefit of the maximum number of people it needs to be tempered by some kind of social conscience, some moral rudder. And the best way to do that is by government regulation.