Differences when Bain invest in a company versus when Obama "invests" in a company

  • Posted by a hidden member.
    Log in to view his profile

    Jan 17, 2012 11:06 PM GMT
    "This is Romney's moment to distinguish himself by making a moral case for free-market capitalism."

    http://online.wsj.com/article/SB10001424052970204409004577158741468922050.html?mod=ITP_opinion_0

    Excerpt only:

    Blue font headings my addition

    Rules Romney followed as an equity investor

    Under the rule of law, capitalists—investors in real estate, factories, equipment, stocks, bonds or whole companies—have the confidence to invest because they know exactly what their property rights will be under various scenarios of success or failure.

    So investors can knowingly take big risks, first when they start or acquire a company, and then when they have to pay workers before there are any customers or any profits. They understand that if everything goes well, their investment will yield profits, and that someday they may be able to sell the business itself for a profit.

    And they understand that if things go badly, and they have to shut down the business, all they'll end up with is whatever they can fire-sale its assets for. That could very well mean a loss. The workers whom they've employed all along will lose their jobs, but they were paid their salaries and benefits all along—investors who rely on equity profits have no such guarantee.

    This is what the word "equity" means, legally. It is the residual share of value left over once everyone else—suppliers, lenders, the tax-man and employees—are paid. An equity owner such as Bain is last in line to earn profits or salvage the remains if there is a failure. In compensation for that lowly status, equity owners get the lion's share of the upside if there is a big success.

    Contrast with the "Rules" Obama followed in GM "Investment"

    The rules under today's politics are quite different. Consider the federal government's 2009 bailout of General Motors. GM's secured bondholders were contractually entitled to equity in the failing company, yet the president stripped them of their rights, giving their equity unfairly to the company's unions—which had helped get that president elected.

    -------------------------------------------------------------------------------------

    BTW - Not all unions benefited under Obama. Indiana Teachers Pension Fund were invested oh Chrysler.

    http://www.openmarket.org/2009/05/21/retirees-taxpayers-ripped-off-to-subsidize-uaw/

    Retirees, Taxpayers Ripped Off to Subsidize UAW

    Obama accused critics of his decision to give control of Chrysler to the United Auto Workers Union of being “speculators.” But it turns out that many of them are pension funds representing the interests of retirees, who are being fleeced to enrich the politically better-connected UAW. ...

    -------------------------------------------------------------------------------------

    It stank before, and it stinks now. Defenders of the Administration will have your hands full when everyone is reminded of the truth in coming months.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 17, 2012 11:09 PM GMT
    southbeach1500 saidDifferences when Bain invest in a company versus when Obama "invests" in a company

    Basically, when Obama "invests" in a company, it turns to crap.

    GM may be doing better, but many jobs, dealerships were lost, and the union owns the company, and investors, including those pensions who Obama the Socialist considers rotten "speculators" were fleeced.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 18, 2012 12:33 AM GMT
    How many of these threads are you going to start? You can keep parroting the new discredited WSJ but everyone understand was PE is, what Romney did, and conflating it with the auto bailouts is specious at best.

    It's really getting pathetic and desperate.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 18, 2012 12:34 AM GMT
    Christian73 saidHow many of these threads are you going to start? You can keep parroting the new discredited WSJ but everyone understand was PE is, what Romney did, and conflating it with the auto bailouts is specious at best.

    It's really getting pathetic and desperate.
    Yeah it is.. poor John.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 18, 2012 2:28 AM GMT
    Christian73 saidHow many of these threads are you going to start? You can keep parroting the new discredited WSJ but everyone understand was PE is, what Romney did, and conflating it with the auto bailouts is specious at best.

    It's really getting pathetic and desperate.

    What is actually pathetic and desperate is your desire to claim on one hand that Romney did less than honorable things, but then you acknowledge private equity is not bad. So when asked what significantly different did Bain do compared to other private equity firms, you are empty-handed, which is why you find these threads annoying.

    True, the private equity investment in companies is very different from the auto bailouts. Just ask the teachers who took a hit with their pensions because they were not as connected as the UAW. That is a big difference, and we will hear a lot about that in coming months. Also, WSJ is influential in the business community, but understandably not favored by the left.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 18, 2012 4:55 AM GMT
    socalfitness said
    Christian73 saidHow many of these threads are you going to start? You can keep parroting the new discredited WSJ but everyone understand was PE is, what Romney did, and conflating it with the auto bailouts is specious at best.

    It's really getting pathetic and desperate.

    What is actually pathetic and desperate is your desire to claim on one hand that Romney did less than honorable things, but then you acknowledge private equity is not bad. So when asked what significantly different did Bain do compared to other private equity firms, you are empty-handed, which is why you find these threads annoying.

    True, the private equity investment in companies is very different from the auto bailouts. Just ask the teachers who took a hit with their pensions because they were not as connected as the UAW. That is a big difference, and we will hear a lot about that in coming months. Also, WSJ is influential in the business community, but understandably not favored by the left.


    I acknowledged that private equity is morally and ethically neutral as a business model. What Bain did was neither. And it puts the lie to your and riddler constant claims that "investors get paid last" as they made millions of companies that went into bankruptcy. Not to mention they charged exorbitant "management fees" (graft really) to outsource jobs and lay Americans off. And I don't recall being ask to differentiate between Bain and its competitors, so...

    The auto bailouts didn't save a company or a union but an entire American industry that is now reasserting its dominance. Had they been left to collapse, it wouldn't have just been union members out of work, it would have been the entire downstream businesses and local economies that would have been wrecked. Meanwhile, the banks continue to be bailed out and have received trillions in tax-payer dollars since 2007.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 18, 2012 5:14 AM GMT
    So socalfitness would have let the american auto industry go bankrupt?

  • Posted by a hidden member.
    Log in to view his profile

    Jan 18, 2012 5:47 AM GMT
    TigerTim saidSo socalfitness would have let the american auto industry go bankrupt?



    Yes. As would Mitt Romney.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 18, 2012 8:35 AM GMT
    Christian73 said...I acknowledged that private equity is morally and ethically neutral as a business model. What Bain did was neither. And it puts the lie to your and riddler constant claims that "investors get paid last" as they made millions of companies that went into bankruptcy. Not to mention they charged exorbitant "management fees" (graft really) to outsource jobs and lay Americans off. And I don't recall being ask to differentiate between Bain and its competitors, so...

    The auto bailouts didn't save a company or a union but an entire American industry that is now reasserting its dominance. Had they been left to collapse, it wouldn't have just been union members out of work, it would have been the entire downstream businesses and local economies that would have been wrecked. Meanwhile, the banks continue to be bailed out and have received trillions in tax-payer dollars since 2007.

    You still did not state what Bain did differently from other private equity companies.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 18, 2012 8:36 AM GMT
    TigerTim saidSo socalfitness would have let the american auto industry go bankrupt?

    So where did I state that? A clumsy way to dodge the fact that he gave ownership to the unions. Either you're playing games, or you are experiencing the onset of some challenges. Some good advice from your home country: http://www.sheffieldforum.co.uk/showthread.php?t=242119
  • Posted by a hidden member.
    Log in to view his profile

    May 14, 2012 5:29 PM GMT
    Thread from primary season relevant again.