Bain attacks open an anti-market Pandora’s Box

Up until now, the attacks on Mitt Romney’s career at Bain Capital have focused on the firm’s private equity business of buying companies, boosting their profitability and then spinning them off.  Some of those deals form the basis of the anti-Romney documentary “When Mitt Romney Came to Town.” The PE piece of the business, according to Romney’s critics, is the Bad Bain. But there is also the venture capital side of things, such as launching office supply retailer Staples. That’s the Good Bain.

But The Washington Post has its doubts (bold for needed emphasis:

But like Romney’s work on all the businesses Bain invested in, the primary goal with these companies wasn’t job creation but making them more profitable and valuable. This meant embracing aspects of capitalism that have unsettled some Americans: laying off workers when necessary, expanding overseas to chase profits and paying top executives significantly more than employees on lower rungs. …

The rise of Staples is in fact a textbook example of “creative destruction.” Staples became a runaway business success in the 1980s and 1990s because it offered companies a smarter way of purchasing supplies, saving them money. As Staples grew, smaller stationery stores were shuttered. These losses are not counted in Romney’s jobs figure. …

Staples, too, is steadily expanding overseas. In 2006, revenue outside North America accounted for 13 percent of revenue. In 2010, the share was 21 percent.

And as Staples has grown, so has the pay earned by its chief executive, from $4.7 million in 2006 to $10.8 million in 2010. The company explains in its annual report how it sets pay, saying that it uses comparable firms, such as Amazon, Best Buy and Starbucks, as benchmarks.

Staples does not disclose the wages of its 89,000 employees, nor does it break out how many work as retail associates.  …  Staples has not been immune from tough choices about cutting workers. During the depths of the recent recession, it laid off about 140 employees, half of whom worked at the company’s headquarters in Framingham, Mass. When it has acquired companies, the firm has also had to lay off some workers — typical for any business acquisition.

In 2004, when Staples bought a small company called Hartford Office Supply, owned by two brothers, employees at the acquired firm worried about their jobs. “We’re all devastated,” one worker told the Hartford Courant at the time. “This is one of the nicest, most family-oriented places that you could work . . . and I don’t know why they had to do this.” 

Yet few would dispute that Staples has become a sterling American success story

Well, apparently, you can count the WaPo as one of those “few.” The article manages  to make the $25 billion company and its 95,000 employees a poster child for the supposed seamy side of capitalism. It even manages to bring in the debate about the impact of big box retailers on small businesses. Not as many mom-and-pops in downtown Smallville? Blame Mitt Romney and his capitalist buddies.  Good thing Bain wasn’t involved with starting Wal-Mart.

The anti-capitalism, anti-free market attacks are metastasizing as the left continues to tout the economics of nostalgia.  They promise a bridge to the pre-computer, pre-globalization past where unions were strong, inequality was low,  employment was for life — and Democrats were in charge. Oh, and where you had to pay a lot for a stapler.