Friday, August 03, 2012

Romney and Bain Capital

The theory versus the reality.  In economic theory, private equity firms buy under performing businesses and restructure them such that the capital is used more efficiently.  This creative destruction strengthens the economy in the long run.  But in actual practice, leveraged buyouts load firms with debt, channel money to the brokers, and leave the workers in the lurch.  What's lacking is appropriate regulation that genuinely results in the theoretical promise of such creative destruction.  What we have is a social class that extols the theoretical benefits of capitalism while it delivers little of them in actual practice.  Instead, they manipulate capitalism for their own predatory satisfaction.  If the benefits of capitalism are to be genuinely realized, its energy needs to be channel appropriately rather than diverted into the silver-lined pockets of the wealthy.

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