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Romney: Aside from 'a few exceptions,' Bain succeeded by expanding the firms it acquired

Mitt Romney is rebutting the Obama campaign's attack on his record at Bain Capital by arguing that aside from "a few exceptions," the firm made money by expanding the companies it took over, rather than by laying off workers. But he's doing so by obscuring some obvious realities.

“With very few exceptions, the times you are successful in an investment are when the enterprise itself becomes larger and more successful. That is how our firm and other firms were able to achieve such success," Romney told the conservative magazine National Review.

"There are a few exceptions where an enterprise is doing well, and realizing dividends from its success, but then it encounters a reversal in circumstances, and it no longer does well," Romney allowed. But, he said, "that tends to be rare."

"The cartoon caricature of investors coming in, taking all the money out of a business and leaving it bankrupt is, of course, absurd," Romney continued. "The only way you make money in the industry that I’m familiar with is by making the business more successful, more profitable, not by making it less so."

But that's exactly the point. Making a company more profitable for investors isn't always what's best for its employees -- as the steelworkers of GS Steel found out when Bain laid them off -- or for the economy as a whole. As Romney says, Bain's model, like that of its competitors, was to figure out how to make the firms it acquired more efficient and profitable. Sometimes that meant investing and expanding. Sometimes it meant cutting costs and laying off workers. Whatever worked.

It's difficult to assess exactly how much of Bain's business involved the former, and how much the latter, in part because the company's books are private. On MSNBC this week, former Pennsylvania governor Ed Rendell, a Democrat, called on Bain to open them, for that very purpose.  

But the idea that Romney's pushing -- that there's no tension at all between Bain's goals and those of the workers at the firms it acquires is transparently bogus.