Romney's Road To RIches

Mitt Romney says he wants to regulate banks in the wake of the economic meltdown. But in fact, he made his fortune from deregulation. Commercial bank loans used to be for building businesses, not destroying them.

In a leveraged buyout, a trader borrows to buy 50% stock in a company. He then transfers most of the debt to the company. He fires workers and strips the company of its profits and much of its assets. If the company goes belly up, the trader doesn’t owe the money. The bankrupt company owes it.

Mitt Romney made his money in “leveraged buyouts”. For example, he bought the retail chain, Stage Stores, with $300 million in loans. The loans were arranged by Michael Milken, then famously under Federal investigation.

Romney’s company made an estimated $175 million on a $10 million investment. Romney had no desire, no experience and no plan to run a chain of retail stores. He saddled the company with monstrous debt, took its profits and let it sink.

Who lost? -- 5,800 unemployed people when Stage Stores went bankrupt; devastated Midwest communities that lost their only department store; pension funds holding some of the loans; U.S. taxpayers who covered the remaining loans during the bail-outs; and real U.S. businesses who couldn’t get loans for growth.

Romney got his campaign contributions by promising to free banks and Wall Street from regulation. Romney’s top twenty contributors are the same financial firms which have wrecked our economy.

[Please submit this as a letter to the editor of your local paper, to reach people who do not use the Internet.]