The latest ad from Team Romney pushes back on charges that he practiced “vulture” capitalism while heading the private equity firm Bain Capital. The ad highlights the Bain companies that created jobs, including Staples, Sports Authority and Steel Dynamics.
Here’s the rub: the Los Angeles Times reports that one of the biggest success stories Romney cites from his Bain Capital days relied heavily on taxpayer help.
Steel Dynamics, Inc. (SDI), an Indiana company, received a combined $37 million in state and county subsidies and grants in 1994 for a $385-million plant project. DeKalb County also levied a new income tax to finance infrastructure improvements to benefit the steel mill.
Romney and his GOP presidential rivals have insisted, over and over, that government holds back business growth and has no business picking winners and losers.
“Fundamentally, what happens in America that creates jobs is not government. It has its role. But by and large, it gets in the way of creating jobs,” he said in Saturday’s debate.
Romney is not alone.
“When government takes control and starts picking winners and losers … then we end up not redistributing wealth, we end up redistributing poverty,” Santorum said this week in Beaufort, S.C.
Five years later when Bain sold its stake in Steel Dynamics at a profit of $85 million, it walked away without paying back any of the $37 million in taxpayer subsides.
SDI is now the nation’s fifth largest producer of carbon steel products with 2010 revenues of $6.3 billion on steel shipments of 5.3 million tons. It employs about 6,100 and operates five electric-furnace mini mills. That’s all terrific.
But the next time Romney insists that government is an impediment to business growth, we’ll remember how Steel Dynamics undercuts his free market pitch and his claim that President Obama seeks “to put free enterprise on trial.”
Ed will talk about this story tonight on The Ed Show at 8pm ET on msnbc. His guest will be former Labor Secretary Robert Reich.