General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsCover of September RS with Taibbi's article about Rmoney
I just may have to get my hands on this issue:
Michigan Alum
(335 posts)Mr.Bill
(24,303 posts)I subscribed to it this year. They have been tearing Romney up on a regular basis. I also remember reading a copy in the doctor's office before the last presidential election, and the article on McCain was devastating.
I have boxes of old issues dating back to the 60s. Fun to get them out every now and then and read some of the old Hunter S. Thompson stuff. It was RS that introduced me to his work.
NICO9000
(970 posts)ProudProgressiveNow
(6,129 posts)struggle4progress
(118,295 posts)ProfessionalLeftist
(4,982 posts)but this is one of them that should be posted every day (and should be major news if our media did its damn job).
renate
(13,776 posts)Most people--myself included--think that the world of business and finance is just so damn complicated that we could never understand it, and would tune out if an ad got too convoluted, but this article explains pretty simply how Mitt got his money, and it's infuriating.
Here's how Romney would go about "liberating" a company: A private equity firm like Bain typically seeks out floundering businesses with good cash flows. It then puts down a relatively small amount of its own money and runs to a big bank like Goldman Sachs or Citigroup for the rest of the financing. (Most leveraged buyouts are financed with 60 to 90 percent borrowed cash.) The takeover firm then uses that borrowed money to buy a controlling stake in the target company, either with or without its consent. When an LBO is done without the consent of the target, it's called a hostile takeover; such thrilling acts of corporate piracy were made legend in the Eighties, most notably the 1988 attack by notorious corporate raiders Kohlberg Kravis Roberts against RJR Nabisco, a deal memorialized in the book Barbarians at the Gate.
Romney and Bain avoided the hostile approach, preferring to secure the cooperation of their takeover targets by buying off a company's management with lucrative bonuses. Once management is on board, the rest is just math. So if the target company is worth $500 million, Bain might put down $20 million of its own cash, then borrow $350 million from an investment bank to take over a controlling stake.
But here's the catch. When Bain borrows all of that money from the bank, it's the target company that ends up on the hook for all of the debt.
Now your troubled firm let's say you make tricycles in Alabama has been taken over by a bunch of slick Wall Street dudes who kicked in as little as five percent as a down payment. So in addition to whatever problems you had before, Tricycle Inc. now owes Goldman or Citigroup $350 million. With all that new debt service to pay, the company's bottom line is suddenly untenable: You almost have to start firing people immediately just to get your costs down to a manageable level.
Read more: http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829#ixzz29rxyFrYM
Of course it would have to be boiled down a bit for a 30-second spot, but I think this explanation is pretty clear.
Wellstone ruled
(34,661 posts)wonder why average folks would vote for this Keeper of the Mormon Cult. If you had read some of the previous articles posted in the RS. You would see the true Willard. Check this hypocrite out gang,he is pure evil to the core. Did I mention,he has no soul,as stated by one of his early in life friend. Willard = Greed and loathing.
dmr
(28,347 posts)What a gem he is.
I was going to let my subscription lapse, but decided I didn't want to give up Taibbi.