David L. Ryan/Boston Globe via Getty Images

Mitt Romney, shown here when he was president of Bain Capital.

Mitt Romney is campaigning as a businessman who knows how to turn the economy around — a skill he says he learned during his time turning companies around, as president of the private equity firm Bain Capital.

So today, we're going to take a look at two deals that Bain did while Mitt Romney was heading the firm. This afternoon, we'll tell the story of one of Bain's successes.

In this story, we look at one of the deals that didn't turn out so well.

The story of how Bain Capital tried — and failed — to build a paper empire starts with an ordinary legal pad. Yellow-lined paper, wide margins. The most innocuous looking thing in the world. The company that makes it has been around for more than 100 years. Its name is as boring as its product: American Pad and Paper. Ampad for short.

Private equity works sort of like flipping houses. You buy a house cheap, fix it up nice, and sell it for a profit. In the process, you make the whole neighborhood better. That's the idea.

When you buy a house, you put down a bit of your own money. But typically you borrow most of the money. That's what Bain did in 1992, when it bought American Pad and Paper: $5 million down, $35 million in bank debt.

"We were highly leveraged as a company," says Russell Gard, the guy who Bain brought in to run the company. "Like, squeaky leveraged. We were tight."

ED JONES/AFP/Getty Images

Help.

Jiang Shixue is describing to me one of the most exciting moments of his life: The moment earlier this month when one of the most important people in Europe — German Chancellor Angela Merkel — came to visit his workplace.

"She said that the EU would be happy to see if China can offer a kind of helping hand," says Jiang, an academic at the Chinese Academy of Social Sciences.

Merkel never actually said the word "money," or "help." She said "cooperation" a lot. But Jiang says everyone in that auditorium heard one clear message: Europe needs help from China to get through its debt crisis.

"I can't believe that China is now the country that the EU is trying to seek help from," Jiang says. "Twenty-two years ago China was a basket case — a very poor developing country. So I really feel quite proud."

Jacob Goldstein/NPR

This can't go on forever.

China's economy sailed through the financial crisis unscathed — at least in the short run.

When the global crisis hit, the country's government-owned banks started lending out lots more money. The money came largely from the savings accounts of ordinary Chinese people. It went largely to finance big construction projects, which helped keep China's economy growing.

"It sort of explains why China recovered so quickly," Hu Angang, an economist at Tsinghua University, told us. Indeed, China's strong showing through the crisis was seen by some as a vindication of the large role Chinese government plays in steering the country's economy.

But if it turns out China doesn't need all that new stuff it's building, the country will face an economic reckoning, says Michael Pettis, who teaches finance at Peking University in Beijing.

iStockphoto.com

Nobody lives forever.

The nation's big banks are writing death plans — living wills that spell out how, in a future crisis, they could be safely dismantled. The idea is that the death plans will help avoid another government bailout of the banks.

"You're technically writing your own funeral, down to the color of the flowers" says Dolores Atallo.

Atallo is part of the living wills team at the consulting firm Deloitte. She shows up to our interview wearing all black, and jokes that she moonlights as an undertaker.

"The regulators are your funeral directors," she says. "They tell you how you're going to be unwound and then they stand over there and say, 'I'm very sorry for your loss.' "

Each bank is now responsible for proving — in detail — that in a crisis situation it could fail without bringing down the financial system. In the case of giant banks, this is ridiculously complicated.

Enlarge Mario Tama/Getty Images

Mario Tama/Getty Images

Turn on the news on any given day, and you're likely to hear about the Dow Jones industrial average. It is the most frequently checked, and cited, proxy of U.S. economic health. But a lot of people — maybe most — don't even know what it is. It's just the stock prices of 30 big companies, summed up and roughly averaged. That's it.

And what does the daily movement of this number have to do with the lives of most Americans? Not much.

Steve Snodgrass/Flickr

Old school.

Ron Silver, the owner of Bubby's restaurant in Brooklyn, recently put a word on his menu you don't often see anymore: lard. The white, creamy, processed fat from a pig. And he didn't use the word just once.

For a one-night-only "Lard Exoneration Dinner", Silver served up lard fried potatoes. And root vegetables, baked in lard. Fried chicken, fried in lard. Roasted fennel glazed with lard sugar and sea salt. Pies, with lard inside and out. All from lard he made himself in the kitchen.

"It seems funny," Silver says, "but for thousands of years this was the thing that people cooked with.

A century ago, lard was in every American pantry and fryer. These days, lard is an insult.

"The word lard has become this generally derogatory term associated with fat and disgustingness," says Dan Pashman who hosts a food podcast called The Sporkful. "Think about Lard-ass, the character from the movie Stand By Me. I mean, he didn't want to be called Lard-ass."

How did this delicious, all-natural fat from a pig become an insult? Who killed lard?

Lard didn't just fall out of favor. It was pushed. It was a casualty of a battle between giant business and corporate interests.

Enlarge Kraft Foods

Kraft Foods has reinvented the Oreo for Chinese consumers. Its latest offering in China: straw-shaped wafers with vanilla-flavored cream filling.

Kraft Foods

Kraft Foods has reinvented the Oreo for Chinese consumers. Its latest offering in China: straw-shaped wafers with vanilla-flavored cream filling.

Everyone knows what an Oreo cookie is supposed to be like. It's round, black and white, and intensely sweet. Has been for 100 years. But sometimes, in order to succeed in the world, even the most iconic product has to adapt.

In China, that meant totally reconsidering what gives an Oreo its Oreoness.

At first, though, Kraft Foods thought that the Chinese would love the Oreo. Who doesn't? The company launched the product there in 1996 as a clone of the American version.

Lorna Davis, who is in charge of the global biscuit division at Kraft, says the Oreo did OK. But it wasn't a hit. It was almost pulled out of China.

But before the cookie was declared a failure, Kraft thought that maybe a little research was in order. And so a decade after it was introduced, Kraft finally asked the right question of Chinese consumers. A question unthinkable in the United States:

What's the problem with an Oreo cookie?

The answer was surprising. Chinese consumers liked the contrast between the bitter cookie and the sugary cream, but, "they said it was a little bit too sweet and a little bit too bitter," Davis explained.

It turns out that if you didn't grow up with Oreos and develop an emotional attachment to the cookie, it can be a weird-tasting little thing. And this started a whole process in the Chinese division of Kraft of rethinking what the essence of an Oreo really is.

Dennis Cook/AP

Jack Abramoff in 2004. He's the one on the right.

Disgraced lobbyist Jack Abramoff has been making the rounds lately. He's out of prison. He has a new book. He's in a talkative mood. So I figured it was a good time to ask him about the business of lobbying — not about what he did that was illegal, but about the ordinary, legal stuff.

The firm he worked for was called Greenberg Traurig. I chose a year at random when Abramoff was working there, and picked a client I hoped would be fairly typical. I chose Tyco International, a multinational corporation that in 2003 gave Abramoff's firm $1.3 million.

"They were fighting to stay out of the tax bill that year, which would have retroactively taxed them to the tune of about $4 billion," Abramoff says.

DIMITAR DILKOFF/AFP/Getty Images

Greece is broke. But there's no blueprint for a country to declare bankruptcy, so Greece's creditors are sort of making things up as they go along.

"You're taking some sort of loss," Hans Humes of Greylock Capital Management told me. "But it's like, how much of a loss do you take? There's this thing called sovereign immunity. You can't go in and take the Acropolis."

Greylock Capital Management is a hedge fund company that holds Greek bonds. So Humes is sitting across the table from Greece. There are lots of other creditors — people sitting alongside Humes — and they all want different things.

Jacob Goldstein/NPR

Yen Jingchang was one of the signers of the secret document.

In 1978, the farmers in a small Chinese village called Xiaogang gathered in a mud hut to sign a secret contract. They thought it might get them executed. Instead, it wound up transforming China's economy in ways that are still reverberating today.

The contract was so risky — and such a big deal — because it was created at the height of communism in China. Everyone worked on the village's collective farm; there was no personal property.

"Back then, even one straw belonged to the group," says Yen Jingchang, who was a farmer in Xiaogang in 1978. "No one owned anything."

At one meeting with communist party officials, a farmer asked: "What about the teeth in my head? Do I own those?" Answer: No. Your teeth belong to the collective.

Felipe Dana/AP

If you listen to commercial radio, this is not news: Katy Perry had a huge year. She went No.1 five times. She was the most played artist on the radio. But the record industry is so weird, it's hard to know whether this kind of success translates into huge amounts of money.

So we asked.

I walked over to Katy Perry's record label. She's on Capital, which is under EMI. I met Greg Thompson, executive vice president of marketing and promotion at EMI.

"Did you guys end up in the black?" I asked.

"As far as I know, yes," he said.

"How do you not know?!"

"I believe we did. Absolutely," he said.

But how much did they spend on Katy Perry? And how much did they make?

Enlarge Dean Kaufman/The Atlantic

Maddie Parlier at work.

Dean Kaufman/The Atlantic

Maddie Parlier at work.

This is the second in a two-part series. Part one is here. For more, see Adam Davidson's cover story in this month's issue of The Atlantic.

Larry Sills is the CEO of Standard Motor Products, like his dad and his grandfather before him. The company makes replacement parts for car engines. Larry grew up with the company, and he has seen the workforce change over the years. A few decades ago, a lot of his workers had no high school degree. Some couldn't read.

"We had a plant in Connecticut where we didn't realize it, but they were illiterate," he says. "And then when we switched to the next generation, we had to be able to read the instructions. To our astonishment, they couldn't do it."

But in today's factory, workers don't just have to know how to read.

"We have a microscope, a hot stand, snap gauges, ID gauges," Standard employee Ralph Young says. "We use bore mics, go-no-go plugs."

Young is the perfect model of the new factory worker. He has an encyclopedic knowledge of metals and microscopes, gauges and plugs. He works on the team that makes fuel injectors, which require precision engineering. At the heart of the assembly process is an automated machine run by a computer process known as CNC.

"When I came here 20 years ago, we didn't have CNC equipment," he says. "It was more of the hammer and screwdriver fix, to where now it's all finesse."

"Now it's all finesse" could be the motto of American manufacturing today. In factories around the country, manufacturing is becoming a high-tech, high-precision business. And not everyone has the finesse to run a CNC machine.

I can read, I've had some computer classes, and I have a Bachelor of Arts degree. But when I asked Ralph's boss, Tony Scalzitti, if he would hire me and train me on the job, his answer surprised me.

Enlarge Dean Kaufman/The Atlantic

The Standard Motor Products plant in Greenville County, S.C.

Dean Kaufman/The Atlantic

The Standard Motor Products plant in Greenville County, S.C.

For more, see Adam Davidson's cover story in this month's issue of The Atlantic.

Greenville County in South Carolina is where manufacturing's past and future live side by side. This is not a metaphor; it's a visible fact. In South Carolina, and throughout America, factories produce more than ever. Yet in Greenville, there are abandoned textile mills everywhere you look.

A decade ago, life in Greenville was organized around the mills. Each mill had its own village, its own church, its own bar. These places were abandoned over the past decade as mill after mill went out of business. What's left are deeply depressed near-ghost towns. But sometimes, amid the stretches of shuttered buildings, you can find a living relic.

A bar called Christine's Place — the sign says "Come to the holler for a cold swaller" — is still open. A few white-haired regulars are nursing drinks at the bar.

In the old Greenville, they say, the mills ran three shifts a day, and Christine's was packed morning, noon and night.

"You could just make money," Terry Leah Suttles, the bar's owner, says. "You could get a job. Everybody knew somebody that worked in the mill, and usually they was hiring. ... I wasn't really old enough to work, but I went to work. I was about 16."

Suttles, like many people in Greenville, dropped out of high school to start work.

This is what made life in the old Greenville so rewarding. People with minimal education could work in a factory and support a lifestyle that their grandparents could only dream of. And the people here — they knew it.

Enlarge AP

Demand for quarter, dimes, nickels, and pennies was up this year.

AP

Demand for quarter, dimes, nickels, and pennies was up this year.

All the instability in the global economy this year has been good for the United States Mint. People in search of a safe place to put their money have been buying gold and silver coins in record numbers.

"Precious metal coins were up $800 million dollars last year and that's approximately thirty some percent," says Richard Peterson, deputy director of the Mint.

U.S Mint 2011 Annual Report

Revenue earned from the Mint's sale of gold and silver coins.

According the the Mint's annual report, they sold 45.2 million ounces of gold and silver coins in 2011.

You can also find what looks like good news for the U.S. economy in the Mint's report — demand for quarter, dimes, nickels, and pennies was up this year. During the financial crisis, demand had plunged.

"People went into their piggy banks and their coin jars and spent those coins, " says Peterson. "Those coins flowed back into the banks and then ultimately back to Federal Reserve. The Federal Reserve vaults started filling up and they turned off the spigot of new coin production from the United States Mint."

U.S Mint 2011 Annual Report

Enlarge Brendan Smialowski/Getty Images

Money goes in. More money comes out.

Brendan Smialowski/Getty Images

Money goes in. More money comes out.

Corporations don't lobby Congress for fun. They lobby because it helps their bottom line. Getting a regulation gutted or a tax loophole created means extra cash for the corporation. But getting laws changed can be very expensive. How much money does a corporation get back from investing in a good lobbyist?

It's a messy, secretive system so it was always hard to study. But in 2004, economists found a bill so simple, so lucrative, that they could finally track the return on lobbying investment.

The American Jobs Creation Act benefited hundreds of multinational corporations with a huge, one-time tax break. Without the law, companies that brought profits earned abroad back to the U.S. had to pay a tax rate of 35 percent. With the law, that rate dropped to just over 5 percent. It saved those companies billions of dollars.

In a recent study, researchers Raquel Alexander and Susan Scholz calculated the total amount the corporations saved from the lower tax rate. They compared the taxes saved to the amount the firms spent lobbying for the law. Their research showed the return on lobbying for those multinational corporations was 22,000 percent. That means for every dollar spent on lobbying, the companies got $220 in tax benefits.