foolsguinea (![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
foolsguinea) wrote2012-01-26 04:08 am
foolsguinea) wrote2012-01-26 04:08 am
(no subject)
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.
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.