Monday, September 3, 2012

UK: Romney would have let GM go bankrupt...but not Bain

The Economist

Mitt Romney and Bain & Company

A bail-out for Romney? 

If the story is not fatally undercut by subsequent reporting or the Romney campaign's explanations, it should harm the Romney campaign. The fact that the taxpayer was not directly on the hook (the FDIC is funded by member banks) softens the story's sting—and probably makes the word "bailout" a stretch.  But the FDIC's job is shoring up banks, not consulting firms. Mr Romney thought that Detroit carmakers should be allowed to go bust rather than getting federal help. Paul Ryan said this week "We will not spend four years blaming others; we will take responsibility." The tea-party movement began in 2009 when Rick Santelli, a financial reporter, decried "losers" getting money from hard-working Americans because those losers had overextended themselves on their home purchases. If Bain & Company was just such a "loser" with too big an appetite, and got a handout to keep its loans above water, Mr Romney has some awkward explaining to do. And "it was perfectly legal" will not do the trick. "Legal but stomach-turning" is all too common in American finance these days. Mitt Romney can ill afford to be more closely associated with dealings like that.

Read it at The Economist:

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