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One of the businesses touted in this new promotional ad from the Romney Campaign is Indiana based Steel Dynamics, a steel mill which, according to the ad, Romney personally rescued from purgatory.
The problem with this claim is that the local government invested more in Steel Dynamics than Bain did, while Bain reaped a massive profit from selling their subsidized stake in it.
But a story in the Los Angeles Times today on the aforementioned Steel Dynamics undercuts Romney’s free market pitch by highlighting just how much help it received from the government along the way. According to the article, the company received some $37 million in taxpayer-funded grants and subsidies to build a factory in Indiana. Another steel company that went bankrupt after being bought out by Bain sought a $50 million federal loan guarantee to keep it afloat.
From the LA Times story.
"Fundamentally, what happens in America that creates jobs is not government. It has its role. But by and large, it gets in the way of creating jobs," he said during a debate Saturday sponsored by ABC News and Yahoo.
Bain Capital began looking at investing in the steel start-up in late 1993. At the time, Steel Dynamics was weighing where to locate its first plant, based in part on which region offered the best tax incentives. In June 1994, Bain put $18.2 million into Steel Dynamics, making it the largest domestic equity holder. It sold its stake five years later for $104 million, a return of more than $85 million.
As Bain made its investment, the state and county pledged $37 million in subsidies and grants for the $385-million plant project. The county also levied a new income tax to finance infrastructure improvements to benefit the steel mill over the heated objections of some county residents.
Not only did the state and county government make a larger investment, they also levied a new income tax to accommodate it. Logic would dictate the local government and new taxes were more responsible for the success of Steel Dynamics than Bain.
Is Mitt Romney endorsing new taxes to pay for infrastructure?
There is yet another problem with this ad, though. At the 0:14 second mark, the ad says Mitt Romney created "thousands of jobs."
Why can't Mitt Romney decide how many jobs he created?