Friday, May 25, 2012

Why Romney doesn't want to talk about Bain Capital

The Huffington Post explains how Republican presidential candidate Mitt Romney's former company, Bain Capital, works. The article also shows why Mitt Romney doesn't want to talk his tenure at Bain. The article says it similar to when the mob moves in on a company, saddle it with debt, loot the profits and then do a "planned bankruptcy." The way Bain does it is legal but harsh. Saddle a company with debt, pay the investors at Bain the proceeds of various loans and cost savings by slashing costs such as the workforce. I like the way the Post says it:

"But for both private equity firms and the mafia, investors use their control of the firm to take on more debt, while at the same time cutting costs by laying off workers.

Cash from the loans and cost savings are funneled back to the investors. This looting continues until the company can't pay its debts. When it finally collapses, the company files for bankruptcy to extinguish the debt -- but private equity investors, as well as mobsters, get to keep the gains they've already reaped."

Here's a video from the Huffington Post.

Stephen Colbert gets it right. Colbert's Super PAC ad on Romney and Bain Capital.

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