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Brothern
... yeah, you have to feel bad for the manufacturing plant that laid off it's employees, but it's killing economic development by wasting resources.

It's analogous to a very Luddite type perspective of the world.

It's s**t that someone invented the mechanized loom that's making you lose your job. The automobile -- killer for the horse and buggy market. Obviously we're not all going to be on the same page in terms of benefiting from progress. It's unfortunate, but in order for progress and change to happen and for everyone to benefit from the rising tide, the inefficiencies need to be weeded out.
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Brothern
Brothern
... yeah, you have to feel bad for the manufacturing plant that laid off it's employees, but it's killing economic development by wasting resources.

It's analogous to a very Luddite type perspective of the world.

It's s**t that someone invented the mechanized loom that's making you lose your job. The automobile -- killer for the horse and buggy market. Obviously we're not all going to be on the same page in terms of benefiting from progress. It's unfortunate, but in order for progress and change to happen and for everyone to benefit from the rising tide, the inefficiencies need to be weeded out.

I'm not sure if what Bain is doing is in any way comparable to the invention of the automobile. If it shits like a horse, and all that.
Buying companies and laying off everyone who worked for them to liquidate that assets? Sounds like a scumbag to me.

Also he should choke on his own words

Heimdalr
I'm not sure if what Bain is doing is in any way comparable to the invention of the automobile. If it shits like a horse, and all that.

Wasn't talking about Bain specifically. I'm referring to large scale economic progress and weeding out economic inefficiencies. Yes, Bain's market function is one of many tools of the free market to do that. And even Bain existing in the market is beneficial to us because it incentives companies' managements to self regulate and embrace efficient resource allocation.
Brothern
Heimdalr
I'm not sure if what Bain is doing is in any way comparable to the invention of the automobile. If it shits like a horse, and all that.

Wasn't talking about Bain specifically. I'm referring to large scale economic progress and weeding out economic inefficiencies. Yes, Bain's market function is one of many tools of the free market to do that. Even Bain existing in the market is beneficially to us because it incentives companies' managements to self regulate and embrace efficient resource allocation.

Weeding out economic inefficiencies is another way of saying that Americans are getting laid off.
The title says it all, but would make little difference to the voter as it is clear from the article, the attack is personal just because Romney is running for the top job. It is common business practice and performed legitimately throughout the world. As it should, since there is nothing worse than a badly run business. For everybody concerned. But sometimes these folk do go too far without considering (or maybe they have and rejected it), the ripple effect it may have through communities.

From the voters point of view a 'Bad Capitalist' is still a far better choice than a 'Good Socialist' to be President.

Though I do not believe Obama to be Socialist in any form of definition, just how I see anti Obama sentiment portrayed in some corners of the media.
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Old Blue Collar Joe
You can't make a profit by buying a business and driving it in to the ground.
Yeah, you can. You just probably shouldn't, because it makes you kind of a douchebag.
Side note, T. Boone Pickens.

Brothern
The best analogy I can think of is flipping a house.
scream scream scream scream scream scream scream scream scream scream

What economic crisis did we JUST FINISH HAVING.
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Wendigo
Brothern
The best analogy I can think of is flipping a house.
scream scream scream scream scream scream scream scream scream scream

What economic crisis did we JUST FINISH HAVING.
In the case of the vulture capitalism accusations, it's really more like setting up a limited liability corporation to take out a mortgage to purchase the house, selling all the copper wire, appliances, and fixtures and renting out the remaining husk as a meth lab, paying yourself a big salary through the corporation, and then letting the mortgage default and the corporation go bankrupt.
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Old Blue Collar Joe
You can't make a profit by buying a business and driving it in to the ground.
Yeah, you can. You just probably shouldn't, because it makes you kind of a douchebag.

I think it's also illegal.
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Old Blue Collar Joe
You can't make a profit by buying a business and driving it in to the ground.
Yeah, you can. You just probably shouldn't, because it makes you kind of a douchebag.

I think it's also illegal.
Why would it be illegal? You bought the business. It's yours. You can do what you want with it.

Of course, because most of the profit to be made is through a leveraged buyout followed by a recapitalization scheme, you might have engaged in some sort of fraudulent transfer, violated a duty of care or a fiduciary relationship to bond holders. But, generally, unless you're doing something to a publicly traded company, where there's SEC involvement, it would probably just depend on any local regulations of business practices.
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Old Blue Collar Joe
You can't make a profit by buying a business and driving it in to the ground.
Yeah, you can. You just probably shouldn't, because it makes you kind of a douchebag.

I think it's also illegal.
A person can legally do a whole lot of things that are scummy, opportunistic and unethical.

If you're Roland Arnall, they'll even make you an ambassador.
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Old Blue Collar Joe
You can't make a profit by buying a business and driving it in to the ground.
Yeah, you can. You just probably shouldn't, because it makes you kind of a douchebag.

I think it's also illegal.
Why would it be illegal? You bought the business. It's yours. You can do what you want with it.

Of course, because most of the profit to be made is through a leveraged buyout followed by a recapitalization scheme, you might have engaged in some sort of fraudulent transfer, violated a duty of care or a fiduciary relationship to bond holders. But, generally, unless you're doing something to a publicly traded company, where there's SEC involvement, it would probably just depend on any local regulations of business practices.

The typical means to profit off of a failing business to to short it stocks. That's insider trading.

Most other mean are straight up fraud. Typically legal entities governing finance like to try and make sure people have a reason to stay in business.
Heimdalr's avatar

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Brothern
Heimdalr
I'm not sure if what Bain is doing is in any way comparable to the invention of the automobile. If it shits like a horse, and all that.

Wasn't talking about Bain specifically. I'm referring to large scale economic progress and weeding out economic inefficiencies. Yes, Bain's market function is one of many tools of the free market to do that. And even Bain existing in the market is beneficial to us because it incentives companies' managements to self regulate and embrace efficient resource allocation.

So basically they're the horror story the CEO's get to hear when the shareholders tuck them in at night. "You better look busy or I'll sell you to Bain. The end. Good night"
Yuki the Third
azulmagia
Yuki the Third
the good news is that if we do recover there's zero chance in hell anyone will attempt that crap again.


That's what they said during the Great Depression.

And look what happened.
Well, let's hope there's smarter people this century.


Um, those are the people I had in mind. sad
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Enduring Shapeshifter

Brothern
TheSilverNoble
Link

The article is definitely biased, but that doesn't necessarily mean it's wrong. It sounds pretty damning, but I admit I don't know a whole lot about that sort of investing. So is this as bad as it seems, or is does it blow things out of proportion.

No, it completely blows things out of proportion. It's hard to beginning defending it too, because you have to have the academic and business background to understand what Bain does what it does and for what purposes.

The best analogy I can think of is flipping a house. You buy an old, worn house for $100K with a leaky roof, broken plumbing and atrocious landscaping. You may be able to live in the house, but the living conditions are still terrible. What Romney does is take out a loan to buy the house, fix the roof, tear out the plumbing and re-do the landscaping. He then sells the house for $250K, because the condition of the house has been improved.

Business are like that house. A lot of people believe every single company that exists is actually a $2M McMansions. They aren't. Businesses may even be profitable (livable) but they still can have poor management, ineffective resource allocations, insensible capital structures, and etc. that is damaging the company and wasting time, resources and human capital. Flipping the house is "creative destruction" - by ripping out the roof or reforming the company's resource allocation, you are strengthening the company.

The disconnect comes from the workers, who do not have the insight into the larger business. No one tells them that their employer is a shitty broken company. Employees may not realize their division is the leaky sink or broken pipe that's dragging down the company. Unfortunate as it may be, that has to be fixed in order for the company to grow or become more prosperous. This article is the equivalent of a person hugging and sobbing over the broken sink and blaming Romney for fixing it.

Yeah. It's harsh. It's cruel. But on a large scale, we need to do it as a society. Economic and social progress will not occur if all of our resources are being ineffectually used and our companies are digging one hole to fill another. Yeah, you have to feel bad for the manufacturing plant that laid off it's employees, but it's killing economic development by wasting resources.


Wouldn't it be more like there was a family living in there and he has now kicked them out to flip the house, increased its value, and resold it at such a profit that the family that had been living in there is now homeless permanently?

Sure he made the house prettier and more functional, and now some other people get to live in it, but what about the people that were already there?

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