foolsguinea | Jan. 26th, 2012

Jan. 26th, 2012

http://www.alternet.org/economy/153808/Mitt_Romney_Wouldn%27t_Know_a_Free_Market_If_It_Bit_Him_on_the_Ass/
Here's how the deal works. The leveraged buy-out firm will put down a fraction of the cost of buying an ailing company. The balance of the transaction is borrowed, but the debt goes onto the books of the target company, not the private equity firm – the struggling company basically finances the lion's share of its own sale.

And here's the key point: the target company's debt payments increase significantly, and those debt payments are then written off, reducing its tax burden significantly. This subsidy increases short-term revenues – at the expense of long-term debt – and that, in turn, is paid out in dividends to Bain's investors and a fat stream of management fees that Romney and his partners skimmed off the top.
...
(Let's ... savor the hypocrisy: a Texas teachers pension fund, one of the largest in the state, is an investor in Bain, and all of its trustees are Perry appointees, and Gingrich himself sat on a board of Forstmann Little. A major competitor of Bain Capital.)
...
"We were doing well and then Bain Capital bought us and they took everything they could out of the company without making the investments we needed to stay competitive," James Sanderson, who had worked at the mill since 1974 told the Herald. "They ran the company into bankruptcy."

Sanderson said the fund “replaced longtime managers who had built Georgetown Steel with bean counters looking for ways to cut costs.”

OK, so file-sharers and drug dealers go to prison while leveraged-buyout dudes wreck companies, make 9 figures, and run the country.

Crossposts: http://foolsguinea.livejournal.com/370028.html

Last night I had a dream wherein I was running along a four-lane highway, ostensibly one of the main roads in my town, at night. There wasn't much traffic, and I saw a break in it, so I crossed from the right shoulder to the left.

A pickup truck was coming over the ridge ahead of me, and at first I thought it was coming in the center oncoming lane to my left, but then it was coming backwards--actually driving backwards--in the lanes to my right. It pulled onto the shoulder where I'd been a moment before--just across the highway from the entrance to a residential area--and stopped. A man and a woman got out. They set a long gun on the roof of the cab. They were laughing.

I was bewildered. What legitimate reason was there for this behavior? It occurred to me to run, but not to pull out my cellphone and call the police.

I broke out of the dream--or took the dream so far into lucidity that I was writing it--at that point, so it basically ended there.

But the thing that gets me is that I started from the standpoint of giving these people the benefit of the doubt. It was as I was analyzing it enough to wake up my brain and stop the flow of images that I realized these people were up to no good. If that had been real, I might have cost the police department response time. (Well, I'm not sure dream-me had a cell phone originally, but awake me was still kicking myself.)

This dream feels like a parable to me. We often see people doing dangerous, foolish things, and try to imagine that it's justified. Maybe it really is malevolent.