The Old-Fashioned Way

Steve Jobs returned to Apple on February 7, 1997. Five weeks later, Apple announced that it was laying off almost a third of its workers — 4,100 jobs. Almost fifteen years later, Apple had 60,000 employees, and Steve Jobs died with $7 billion to his name.

Nobody resented his wealth.

Years after he returned, Jobs would say that Apple was ninety days away from bankruptcy in 1997. Fellow computer magnate Michael Dell infamously said that October that if he was in charge, “I’d shut it down and give the money back to the shareholders.”

Nobody resented Apple for killing jobs.

After all, that’s how capitalism works: Companies rise, companies fall. And some companies rise again from the ashes.

Contrast this with how vulture capitalism works:

Romney’s private equity firm, Bain Capital, bought companies and often increased short-term earnings so those businesses could then borrow enormous amounts of money. That borrowed money was used to pay Bain dividends. Then those businesses needed to maintain that high level of earnings to pay their debts.

And when Bain businesses couldn’t maintain artificially inflated earnings to pay Bain dividends, Bain businesses went bankrupt, leaving lenders — and employees — holding the bag. Bain’s business model profits from misery, not production.

This is the second time this week we’ve compared Apple to Bain, and for the same reason: One company practices capitalism as everybody understands it. The other company games the system.

Mitt Romney says that his critics are putting the free market on trial. Problem is, Mitt Romney has made a very lucrative career out of avoiding it.

nojo
7:00 am • Friday • January 13, 2012
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8 Comments

ManchuCandidate

8:36 am • Friday • January 13, 2012

It sounds like Mittens spelled Bane wrong.

Dodgerblue

8:56 am • Friday • January 13, 2012

Nerd alert: I womder whether the unpaid creditors in any of those bankruptcies tried to force repayment of the dividends paid to Bain as fraudulent transfers.

matador1015

12:00 pm • Friday • January 13, 2012

I remember the thrashing Jobs took from the media and Apple loyalists when he killed the Newton. Little did they realize that he was holding back for entirely new product, a game-changing, highly profitable tablet we all know as the iPad.

OTOH, what products can Mittens be given credit for introducing? (crickets)

Benedick

1:29 pm • Friday • January 13, 2012

@matador1015: Hair product.

FlyingChainSaw

2:53 pm • Friday • January 13, 2012

@matador1015: He was standing around when Bain invested in a stationery store category killer called Staples that employs disposable, minimum-wage dead-ender retards, selling shit made in the PRC by slave labor. It’s sort of a Bain dream company.

nojo

3:45 pm • Friday • January 13, 2012

@matador1015: There’s a video of Steve Jobs doing a Q&A with geeks just after he killed the Newton, OpenDoc, and other Apple babies.

I remember watching it at the time, and watched it again last fall. His reasoning was sound, and events proved him right.

4:34 pm • Friday • January 13, 2012

@FlyingChainSaw: “Layoff 10,000 employees? That was easy.”

¡Andrew!

5:27 pm • Friday • January 13, 2012

Pain Capital