(FOX19) - Mitt Romney has taken a lot of heat over the last few days for reportedly saying that he "likes to fire people." Was that statement taken out of context?
Before we get to what Romney said, lets put things into context.
One of the areas the former governor has been pounded on as of late is on his time at Bain Capital.
If you aren't savvy on what a private equity firm like Bain does, let me explain.
After earning degrees from Harvard Law and Harvard Business School, Romney landed at consulting firm Bain & Co.
In 1984, he was selected to lead Bain Capital. Bain Capital initially specialized in venture capital deals. That is where investors, like Bain, will take an equity stake in a developing or struggling company, restructure the company and make a profit.
Bain Capital would eventually move to more lucrative, and risky, investment strategy called leveraged buyouts.
In you buy a company with borrowed money and then use the companies assets as collateral. Bain made a lot of money - $2.5 billion made on investments of $1.1 billion.
The Wall Street Journal reports that from 1984 to 1999, during the time Romney was at helm, 77 companies were restructured. Of those 77 companies, 22 percent declared bankruptcy or closed within eight years of Bain's initial investment.
So if it is all free enterprise, what is the problem here?
In many cases, such as Staples, the company expanded and added thousands of jobs. Romney claims Bain created at least 100,000 jobs. But if you look into those numbers, they aren't really something you can prove because Bain Capital never kept portfolio payroll data.
The Romney campaign came up with those numbers by looking at three companies, Staples, Sports Authority and Dominos, in which Bain invested including time after Romney left.
But what about the losses?
In cases, such as Ampad or the American Pad and Paper Company, a company that sold yellow paper pads through Wal-mart and Staples, Bain cut 185 jobs and the company wound up in bankruptcy. Stockholders were left with worthless shares. Creditors and vendors were paid less than 50 cents on the dollar.
But even as jobs were lost, in almost all cases Bain Capital made money. In fact, Bain earned substantially more from Ampad than Staples. Staples returned about $13 million on a $2 million investment; Ampad yielded more than $100 million on a $5 million investment.
So, to the question of whether or not Mitt Romney likes to fire people? Candidates have been all of former governor for that statement.
So what did Romney say, in context? The former governor was talking about being able to choose his own healthcare.
"I want individuals to have their own insurance that means the insurance company will have an incentive to keep you healthy. It also means if you don't like what they do you can fire them. I like being able to fire people who provide services to me," Romney told a crowd in New Hampshire.
Here's what you need to know.
It is painfully clear that Romney was taken out of context. Any candidate who piled on should be embarrassed.
But there is a bigger question here.
For months Romney has been touted as the candidate who really knows economics and can get people working again.
It is true that about 70 percent of the companies Bain invested in did well. It is true that at Bain Capital, Romney and his investors did extremely well. It is also true that in a free market, there are winners and losers, not every company makes it.
But an equity firm is not like building a company from the ground up by creating or inventing a product.
So the question, is the Romney economic narrative as we learn more about it something independent voters will get behind?
That part of the story remains to be seen.
And that is Reality Check.
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