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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsRolling Stone: Why Private Equity Firms Like Bain Really Are the Worst of Capitalism
Why Private Equity Firms Like Bain Really Are the Worst of Capitalism
POSTED: May 23, 2:35 PM ET | By Josh Kosman
By placing his career at Bain Capital at the center of his presidential campaign, former buyout artist Mitt Romney has put the private equity industry on trial.
About time.
Romney wants us to believe that critics of private equity are against capitalism. Theyre not. Theyre against a predatory system created and perpetuated by Wall Street solely to pump its own profits.
Defenders of private equity say firms like Bain, which Romney co-founded in 1984, exist to build businesses, creating jobs and prosperity all the while. "We started Staples, we started the Sports Authority, we started Bright Horizons children centers," Romney said at one of the GOP presidential debates last year. "Heck, we even started a steel mill in a farm field in Indiana. And that steel mill operates today and employs a lot of people." ................(more)
The complete piece is at: http://www.rollingstone.com/politics/blogs/national-affairs/why-private-equity-firms-like-bain-really-are-the-worst-of-capitalism-20120523#ixzz1w7k5YOfC
xchrom
(108,903 posts)LiberalAndProud
(12,799 posts)aint_no_life_nowhere
(21,925 posts)LiberalAndProud
(12,799 posts)flying rabbit
(4,644 posts)kentuck
(111,110 posts)When they brag about Staples and other successes, they are not talking about private equity, they are talking about "venture capital". The author does a good job differentiating.
spanone
(135,915 posts)KT2000
(20,597 posts)a very very few pocket the proceeds - with government assistance - for sending the work overseas and/or shutting them completely.
qb
(5,924 posts)Initech
(100,118 posts)Quantess
(27,630 posts)Warpy
(111,406 posts)In the past, vulture capitalists used to weed out the weak and that was probably a good thing. However, Bain didn't pick on the weak, it picked on weak and strong alike.
1. Find a company, any company, that is possible to purchase.
2. Purchase the company.
3. Borrow against the company, including its pension plan.
4. Send the borrowed cash offshore to stash it, or use it to
buy another company.
5. Sell off the most profitable parts of the company, if
possible, and decimate the workforce to squeeze out
anything left.
6. Cut the company loose to declare bankruptcy.
7. Watch the money roll in from the offshore accounts.
8. Congratulate oneself for being "smart."
In the meantime, displaced workers and shafted stockholders alike were more likely to end up living on the taxpayer dollar while Bain paid little to no tax on its stashed profit. Every company they destroyed made this country just a little poorer.
Hey, it's really easy to get ahead if you throw out the rules of common decency and fair play, if you have no regard for anything but your own profit, and if you buy enough people at the SEC to look the other way. Limbaugh will pull the wool over the eyes of anybody stupid enough to listen to him and I'm sorry to say a lot of people are stupid enough to listen to him.