WASHINGTON — My daughter has not yet reached her ninth birthday, but I already have her pegged for a job at Bain Capital.
My evidence for this is the ease with which she has embraced “Tiny Tower,” a business-simulation game that millions of people are using to play capitalist on their iPhones and tablets, attempting to build ever larger towers with ever more businesses that generate ever more coins and “tower bux.”
My daughter’s 12 businesses include a casino, a bank, a doughnut shop and a soda brewery. But in this game it doesn’t matter what type of business she operates — only that she operates it with maximum efficiency, firing and evicting her “bitizens” at will and benefiting from the help of “VIPs” to bring her more business and accelerate construction.
The game is devoid of business ethics; the goal is to maximize value by boosting output. Tiny Tower functions, in other words, strikingly like Bain Capital did under Mitt Romney.
I thought of the similarity as I read a powerful report by Bloomberg News last week on Romney’s adventure with Bain in the Italian yellow-pages business. The news service revisited Bain’s experience in the privatization of the Italian phone directory Seat Pagine Gialle SpA, which generated $1 billion in profits for Bain (and $50 million to $60 million for Romney) when Bain’s investment group sold the company for about 25 times the original purchase price two years after buying it.
That’s a lot of tower bux.
According to the Bloomberg account, Bain invested 36 million euros as part of a group that bought a majority of Seat for 853 million euros in late 1997. In February 2000, during the dot-com bubble, Telecom Italia bought back the Seat shares it didn’t own for 14.6 billion euros — generating a windfall for Bain.
Three years later, according