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Capitalism, as practiced in the real world, goes far beyond the private ownership of productive capital. Capitalism as it actually exists includes different forms of corporate ownership, different forms of investment and financing schemes, interest, the acceptance of greed as an objective good, usury, using capital for profit, using capital to prevent competitors from making profit, monopoly, free trade, involvement of the highest levels of government, and a utilitarian view of the worker. Any discussion of Capitalism which reduces the term to the basic definition of the word is unrealistic. In other words, the economic system actually operating under the name Capitalism is very different than the basic definition of the word, and with all due respect to Dr. Waters, what he described as true Capitalism is really a different economic system that also includes the private ownership of capital but actively rejects and prevents unjust practices. For the purpose of debate about our current economic situation, Capitalism must be considered as including all of the views and practices commonly accepted as part of the system.
Private equity trembles over 'vulture' label as Romney rises
An industry that likes operating in the shadows is uncomfortably in the campaign limelight
The titans of private equity have long feared this moment. As Mitt Romney has established himself as the front-runner for the Republican nomination, not only has his record at Bain Capital come under intense scrutiny and withering attacks — but so has the private equity industry.
Mr. Romney’s opponents are the loudest, accusing such firms of carving up companies and cutting jobs. Newt Gingrich said over the weekend that Bain looted companies and fired employees, and Rick Perry on Tuesday called private equity firms “vultures.” An anti-Romney documentary calls him a “predatory corporate raider.”
And if Mr. Romney faces a well-financed Obama re-election campaign, the industry’s top officials know that the president will continue to push the portrayal of Mr. Romney as a fat-cat job-destroying deal maker.
“We were bracing ourselves for this, but we’re not even in the general election yet,” said a senior private equity executive who spoke on the condition of anonymity. “Expect more pain.”
The two faces of Mitt Romney and Bain Capital
There’s Mitt Romney, job-creator, the Bain executive who swooped in to help start-ups become nationally successful enterprises. Then there’s Mitt Romney, job-destroyer: the Bain executive who swooped in to help ailing firms reorganize, lay off workers, and sold them off at a profit — only to have some of them go bankrupt later.
First, there’s venture-capital Romney — the Bain businessman who invested in fledgling start-ups, typically through obtaining a minority stake. This is the version that Romney himself likes to tout on the campaign trail. In his early years at Bain, Romney helped make deals like the $5 million investment sunk into Staples in the 1980s — buying a minority stake that ultimately made Bain $13 million when the office-supply store went public in 1989. Bain was also among a handful of venture-capital firms that helped found the Sports Authority through another minority stakeholder investment.
On the flip side, there’s private-equity Romney — the Bain businessman who pursued corporate buyouts that typically secured majority control of mature firms, helped reorganize them, then sold them off a few years later. These were Romney’s business deals that scored the biggest gains during his time at Bain — and those that were significantly more fundamental to building Bain’s industry-leading reputation than the small venture-capital investments that dominated the early part of his business career. Ten of these private-equity deals produced 70 percent of the dollar gains that Bain made during Romney’s tenure from 1984 until 1999 — or about $1.75 billion in total — as the Wall Street Journal points out.
Originally posted by KonquestAbySS
reply to post by FortAnthem
This will mostly be one of the reasons why Romney will drop out of this race, or why he will lose a lot of support...This will come back and get him big time, and there is no dodging it this time Mitt...I can picture his hair turning gray over this, better get another coat of Rogaine before your next television appearance...
Originally posted by FortAnthem
What Bain did was to force companies to accept a leveraged buyout; they would find a good productive company with a lot of assets and finance the money needed to buy out the company by borrowing against the assets of the company they had not yet gained possession of. When they aquired that company, the formerly productive and well run business found itself strapped with the debt used by the buyers for the takeover.
Originally posted by Jessica6
I have never understood how this is possibly legal. It makes absolutely no sense at all.