Bob Schwartz

Tag: Bain Capital

Soylent Green, My Friend, Is People


Mother Jones has already changed the trajectory of the Presidential campaign with the “47%” video. It’s latest video find may not have the same effect, but it is still revealing.

It comes from a promotional Bain Capital CD-ROM from 1998. Along with other artifacts of the Bain culture at the time, it includes a video of Mitt Romney from 1985 explaining the Bain business model:

Bain Capital is an investment partnership which was formed to invest in startup companies and ongoing companies, then to take an active hand in managing them and hopefully, five to eight years later, to harvest them at a significant profit…The fund was formed on September 30th of last year. It’s been about 10 months then. It was formed with $37 million in invested cash. An additional $50 million or so of what I’ll call a call pool, which is money that we can call upon if the deals are large enough that they require more than a $2 or $3 million dollar initial investment. Why in the world did Bain and Company get involved in this kind of a business? We’re not particularly noted for having years and years of experience in financing. Three reasons. We recognized that we had the potential to develop a significant and proprietary flow of business opportunities. Secondly, we had concepts and experience which would allow us to identify potential value and hidden value in a particular investment candidate. And third, we had the consulting resources and management skills and management resources to become actively involved in the companies we invested in to help them realize their potential value.

It’s the “harvest” line that is getting the most attention, presumably because it suggests to some that the companies are viewed primarily as abstract opportunities that are optimized for profit, rather than enterprises that make particular things and where particular people work and build their lives.

Fans of sci-fi movies are burdened by seeing the “real” world through the lens of those films. So this line flashed two iconic and unforgettable scenes.

One is from The Matrix (1999), when we first see the humans being used as living batteries to power the world of the Matrix.

The other is from Soylent Green (1973). In 2022, the desperate population of overcrowded New York City is being kept alive by the nutritional drink Soylent Green. At the end, we learn the dark secret of Soylent Corporation, as screamed by Charlton Heston (spoiler alert): “Soylent Green is people!” Yes, it is processed from the oversupply of corpses.

All this probably has nothing to do with Bain Capital harvesting companies. Somehow, though, “Corporations, my friend, are people!” just got mixed up with “Soylent Green is people!”, Charleston Heston got mixed up with Clint Eastwood and Mitt Romney.

As noted in a post a few days ago, this campaign may not just be threatening to drive us—candidates and voters—mad. It may have done that already.

Mitt Romney Doesn’t Really Want To Be President


Mitt Romney doesn’t want to be President. This has been apparent for a while, but it seemed so unlikely—so strange for a person who is actually a nominee—that it defied saying. But it is the clearest explanation of everything that is happening.

Why would Romney run if he doesn’t want the office? The clichéd but useful explanation goes to a father-son dynamic.

In at least one objective respect, Mitt has spectacularly surpassed George Romney. Mitt Romney is a very, very rich man, wealthier than his father ever was.

As a businessman, it is a little more complicated. George Romney was, as the saying used to go, a captain of industry. He worked his way up to become head of one of the largest automakers, back when that mattered much more than it does now. Even if American Motors wasn’t one of the Big Three, it was a notable, forward-looking player in the field.

Mitt Romney’s success is different. Even treating the financial world as a discrete industry, which it of course is, the term “captain of industry” doesn’t seem to apply to Mitt. In the annals of financial history, no one will be talking about the creativity of Bain Capital the way business historians still do about the ahead-of-its-time thinking that marked American Motors—the company that believed the oversized car era was over, and that consumers would be buying compact and efficient automobiles. Eventually they would.

Politics is where the distinction is sharpest. George Romney was elected Republican Governor of Michigan three times—a state that was then decidedly Democratic. He had substantial political appeal and support, but his dream of being President was scuttled in part by the infamous “brainwashing” incident. He had visited Vietnam, and was told by the generals how well the war was going—in spite of evidence to the contrary. When he spoke about his opposition to the war, he said he had been “brainwashed” by the generals. George Romney’s political career never recovered.

As a politician, Mitt Romney has run for office just twice, and won only once. He was defeated for U.S. Senate from Massachusetts in 1994, and then was elected Governor in 2002. He chose not to run for re-election in 2006. Indications were that he would have a difficult race, and he instead began his run for the Presidency the day before he left office.

This father-son analysis—that Mitt Romney is trying, at all costs and for whatever reasons, to do what his father never could—may sound too easy. But the story of fathers and sons is just about the oldest story ever told. The patriarchal sagas of the Old Testament begin there, and great stories derive their greatness from the fact that some things never change.

Mitt Romney is following a program that he may not see or understand but that he has little or no choice about. It is a program, this running for President, that normally requires some combination of skill and desire. A surplus of one can balance out a deficit in the other. But trying to run without either—which we have never seen in a Presidential race—is bound to produce some anomalous results.

In the case of Mitt Romney, we can set aside the issue of how much political skill he has, though many have their doubts. The real question is how much desire he has. The answer, strangely, is little or none.

The outcome of the election is far from written. In case Mitt Romney loses, there is reason to believe that he will suffer some nagging psychic pain. But given the possibility that it is not something he really wants. there is also reason to believe he will go back to an extraordinarily comfortable life, and secretly be relieved.