Thursday, January 12, 2012

The Corporate Raider zero-sum game...

While Romney is being attacked on his “success” with Bain Capital, the mainstay of the Republican Party is trying to cleanse what corporate raiders are doing by labeling the activity as “good capitalism.”

The problem with that approach is that when a private equity firm like Bain makes money out of turn-around activity, someone has to bleed in order to produce the glorious profits. Either the seller lost money in the deal, the employees are getting laid off or the creditors are forced to take a fraction of their due. This, at the end of the day, is a zero-sum game and someone has to pay for the gain of the investors...

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