Blow, Nocera and Collins

Mr. Blow has a question in “Bullies on the Bus:”  Do those adolescent boys represent something in our society at large? The answer may be quite uncomfortable.  Mr. Nocera looks at “Burger King, the Cash Cow,” and says the fast-food restaurant chain made big news this week in going public. Here is why private equity firms keep feasting on burgers and fries.  Ms. Collins takes a look at “The (Sort of) New Mitt” and has a question:  Is General Election Mitt Romney making some changes from the Primary Mitt Romney? Just look at the Mittspeak, people, and decide for yourself.  Here’s Mr. Blow:

“Making the Bus Monitor Cry.”

That’s the name of the video. It’s more than 10 minutes long, but if you make it through more than three of them with your eyes not getting misty and your blood not boiling then you are a rock, or at least your heart is.

The video shows Karen Klein, a 68-year-old grandmother and bus monitor in upstate New York, being relentlessly tormented by a group of young boys.

They hurl profanities. One asks for her address because he says he wants to go urinate on her door. Others are more explicit about defiling her.

One boy tells her that she doesn’t have a family because “they all killed themselves because they didn’t want to be near you.” (Her eldest son committed suicide.)

One suggests that if he were to stab her, his knife would go through her “like butter.”

Since the video was posted to YouTube, there has been an outpouring of shock and outrage.

An online campaign set up to raise $5,000 to send Klein on a vacation had raised more than $500,000 by midday Friday, Klein has made the media circuit recounting her ordeal and some of the children have apologized.

But what, if anything, does this say about society at large? Many things one could argue, but, for me, it is a remarkably apt metaphor for this moment in the American discourse in which hostility has been drawn out into the sunlight.

Those boys are us, or at least too many of us: America at it’s ugliest. It is that part of society that sees the weak and vulnerable as worthy of derision and animus.

This kind of behavior is not isolated to children and school buses and suburban communities. It stretches to the upper reaches of society — our politics and our pulpits and our public squares.

Whether it is a Republican debate audience booing a gay soldier or Rush Limbaugh’s vicious attack on a female Georgetown law student or Newt Gingrich’s salvos at the poor, bullying has become boilerplate. Hiss and taunt. Tease and intimidate. Target your enemies and torture them mercilessly. Maintain primacy through predation.

Traditionally inferior identity roles are registered in a variety of ways. For Klein, she was elderly and female and not thin or rich. For others, it is skin color, country of origin, object of affection or some other accident of birth.

The country is changing, and that change is creating friction: between the traditional ruling classes and emerging ones; between traditional social structures and altered ones; between a long-held vision of an American ideal and growing reality that its time has passed.

And that change is coming with an unrelenting swiftness.

Last month, the Census Bureau reported that for the first time in the country’s history, minority births outnumbered those of whites. And The New York Times recently highlighted a Brookings Institution demographer’s calculations that, “minorities accounted for 92 percent of the nation’s population growth in the decade that ended in 2010.”

Furthermore, there are now more women in college than men, and a Pew Research Center poll published in April found that, “in a reversal of traditional gender roles, young women now surpass young men in the importance they place on having a high-paying career or profession.”

A Gallup poll released Thursday found that a record number of people (54 percent) say that they would be willing to vote for an atheist for president, and a Gallup poll last month found that more people support same-sex marriage than oppose it.

These dramatic shifts are upending the majority-minority paradigm and are making many people uneasy.

The Republican-Democratic divide is increasingly becoming an all-white/multicultural divide, a male/female divide, and a more religious/less religious divide — the formers the traditional power classes, and the latters the emerging ones.

This has led to some increasingly unseemly attacks at traditionally marginalized groups, even as — and possibly particularly because — they grow more powerful.

Women are under attack. Hispanics are under attack. Minority voting rights are under attack. The poor are under attack. Unsurprisingly, those doing the attacking in every case are from the right.

Seldom is power freely passed and painlessly surrendered, particularly when the traditionally powerful see the realignment as an existential threat.

The bullying on that bus was awful, but so is the bullying in our politics. Those boys were trying to exert power over a person placed there to rein them in. But bullying is always about power — projecting more than you have in order to accrue more than your share.

Sounds like the frightened, insecure part of American society.

Now here’s Mr. Nocera:

Earlier this week, a well-known company went public in a complicated transaction that involved a handful of Wall Street sharpies and a mysterious investment vehicle called a SPAC. The company was Burger King.

Seriously.

If you are surprised to learn that the home of the Whopper — not to mention the bacon sundae — would find itself the subject of complex financial machinations, you shouldn’t be. Burger King has long been an enrichment scheme for clever financiers, who have sucked hundreds of millions of dollars out of it over the years. Maybe it will be different this time. Or maybe not.

Financial engineering has been part of the Burger King story for so long that it’s hard to believe there is still anything worth plucking from its carcass. “It’s been run as a cash cow for Wall Street,” said Bob Goldin, an executive vice president of Technomic, a food service consulting firm. Along the way it’s had 13 chief executives in 25 years, numerous strategy shifts and marketing campaigns — and has been constantly starved for cash. But, hey, the private equity guys got theirs. And isn’t that what really matters?

Burger King first became financial fodder in 1967 when it was bought by Pillsbury, which didn’t have a clue about how to run a restaurant chain. Then in 1988, a British company, Grand Metropolitan, initiated a hostile takeover and won Pillsbury. The new owners vowed to turn Burger King around.

It didn’t happen. Nine years later, Grand Met merged with Guinness to form Diageo, by which time Burger King’s role was well established. It shipped cash to headquarters, even as it lagged ever further behind McDonald’s.

Enter — ta-da! — private equity. In 2002, Goldman Sachs, along with two private equity firms, TGP and … hmmm … Bain Capital, teamed up to buy Burger King. This is exactly the kind of situation private equity firms like to trumpet: taking over a downtrodden company and nursing it back to health. And to get them their due, Burger King’s new owners did some good, stabilizing both the company and the franchisees, many of whom were in worse shape than Burger King itself.

But the private equity investors also cut themselves an incredibly sweet deal. Their $1.5 billion purchase price included only $210 million of their own money; the rest was borrowed. They immediately began taking out tens of millions of dollars in fees. Four years later, they took Burger King public. But, first, they rewarded themselves with a $448 million dividend. In all, according to The Wall Street Journal, “the firms received $511 million in dividend, fees, expense reimbursements and interest” — while still retaining a 76 percent stake.

Does it need to be said that Burger King was soon back to its old struggling self? Or that the solution, once again, was to sell to another private equity firm? Of course not! In 2010, Bain, Goldman and TPG cashed out, selling Burger King to 3G Capital, for $3.3 billion. In sum, the original private equity troika reaped a fortune by selling a company that was in nearly as much trouble as it had been when they first bought it. Surely this represents the apotheosis of financial engineering.

What has 3G done? According to Howard Penney, the managing director at Hedgeye, it has prettied up the pig by laying off a large percentage of the staff in Burger King’s Miami headquarters. Burger King’s owners grew earnings, he said, “by cutting expenses. They have not improved the business one iota.” And, of course, 3G pulled out fees and dividends, too. In all, Penney wrote recently, private equity firms have taken for themselves “$1 billion or more in capital that could have been used to improve the company’s relative standing versus its competitors, many of whom Burger King struggles to keep up with.”

This latest deal is just as complicated as the ones that have come before. Three financiers, including William Ackman, the well-known shareholder activist, put together a special purpose acquisition company, or SPAC — a vehicle that allows them to raise money, buy a company and take it public without the hassle of an I.P.O. The SPAC then bought a stake in Burger King, though 3G is still in charge. On its first day of trading, Burger King had a market value of $3.3 billion. When you include its fees and dividends, 3G has already made a tidy sum on its original investment.

Ackman told me that the 3G guys are “the best operators around, bar none.” He sent me a presentation for investors that suggests that the owners are prepared to modernize the stores, expand abroad and make other moves that are necessary for Burger King to remain competitive.

For the sake of all the people whose livelihoods depend on Burger King, let’s hope that happens. And if it doesn’t? The financiers will still make money. They always do.

And now here’s Ms. Collins:

Today: Mitt Romney and immigration.

As you know, American Hispanics are an important and fast-growing voting bloc. Romney has long had a strategy for winning them over. The key, he explained last year, is to tell them “what they know in their heart, which is they or their ancestors did not come here for a handout.”

Hard to get more appealing than that.

This was Primary Mitt, who had a long history of whacking his Republican opponents with soft-on-illegal-immigrants charges. In the 2008 campaign, he accused Rudy Giuliani of making New York a “sanctuary city” and Mike Huckabee of supporting “in-state benefits for illegal immigrants.” One of his ads called John McCain a champion of “amnesty for illegals.” The Romney news release that accompanied the ad’s debut mentioned “amnesty” 17 times.

It didn’t work. McCain won the nomination anyway. That was the earlier version of John McCain, before he lost the presidential race and was abducted by space aliens who took him off to a distant planet and substituted a cranky android with an obsession about border fences.

Last year, Romney tried the same tactics on Rick Perry. “I got to be honest with you. I don’t see how it is that a state like Texas — you go to the University of Texas, if you’re an illegal alien, you get an in-state tuition discount,” he complained during one of the debates.

Perry suggested that when it came to undocumented students who had been brought to the country as children, Romney had no heart. Also, he tried to get some mileage out of the fact that Mitt had once employed illegal immigrants to tend his yard. But it was, you know, Rick Perry, so, of course, nothing worked.

Now Romney is the inevitable Republican nominee, and this week there he was, speaking to a large group of prominent Hispanics. It was his first chance to try out his strategy, but astonishingly, Romney did not tell the audience what they knew in their hearts about in-state tuition and other handouts.

In fact, the word “handout” never came up. Romney did tell the inspiring story of his father’s emigration from Mexico at the age of 5, although not the part about how the family had gone down there in the first place to avoid American laws against polygamy.

And there was quite a bit about the economy. You certainly can’t blame Romney for mentioning it every chance he gets. But not everybody would choose to follow “liberty’s torch can burn just as brightly for future generations of immigrants” with a call to lower the corporate tax rate.

Plus, standard Mittspeak. We are going to have a lot of this in the coming months, people. Let’s pause for a minute while you test your ability to be a Mitt Romney speechwriter:

“Though each of us walks a different path in life, we are united by one great, overwhelming passion. We love …

A) heavily sugared soft drinks.”

B) attractive young women who marry into the British royal family.”

C) cat videos.”

D) America.”

“This isn’t an election about two people. This isn’t an election about being a Republican, Democrat or an independent. This is an election about …

A) lowering the corporate tax rate.”

B) lowering the individual marginal tax rates.”

C) keeping dogs off the car roof.”

D) the future of America.”

O.K., the Ds. And not the most stirring speech in the history of the world. Obama, who followed up on Friday, got a warmer reception. But let’s try to figure out what Romney actually said. Except when it came to certain lawn-mowing episodes, he’s always talked very tough on illegal immigration. Now that he’s sniffing around for Hispanic voters, is he going to change his tune?

Answer: Romney vowed to address the problem “in a civil and resolute manner.” That was a surprise. I really thought he’d go for “impolite yet wishy-washy.”

Like many of our big policy debates, immigration reform has dwindled away to an argument about something less than sweeping. In this case, it’s the Dream Act, the popular plan to let people who were brought here illegally as kids become citizens if they get a college degree or serve in the military.

Primary Mitt was going to veto it.

General Election Mitt will take the military service part, “and if you get an advanced degree here, we want you to stay here.” (Give me your tired, your poor, your huddled masses bearing Ph.D.’s and master’s degrees in civil engineering or computer science. …)

As for the mere college graduates, whom Obama has now announced he will protect from deportation under an executive order, Romney was, um, vague. But whatever he does will be “long-term.”

Also, he seems to have banished “self-deportation” and “amnesty” from his vocabulary. Unless it looks as if they’ll come in handy somewhere down the line.

 

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