On August 15 2012 12:06 Rassy wrote: And how did romney make that monney? By working verry hard and beeing verry good at his job, turning around businesses in difficult times.
The success rate of Bain capital wasn't particularly good with the companies they bought out. Approximately one quarter of them went into bankruptcy. Essentially, buy a large stake in a company, charge that company exorbitant consulting fees, and slash the workforce (or send it overseas). If it worked, they made a fortune. If the company failed, they still made money in many cases. There's a reason why people often call it vulture capitalism.
To be fair, it was Romney's job to make money for his own company and he did a good job of that. But he was often toxic for the companies Bain bought and almost always toxic for the people who worked at them.
They're using a poor methodology to measure Bain's success. Bankruptcy doesn't usually mean that the company is eradicated. A company after bankruptcy could still be much larger than when you first bought it.
It also needs to be noted that Bain often bought companies already in trouble. Many would have likely defaulted if Bain hadn't stepped in anyways.
You really can't be profitable driving companies into the ground. It might happen once in a while by luck but that's it.
On August 15 2012 12:06 Rassy wrote: And how did romney make that monney? By working verry hard and beeing verry good at his job, turning around businesses in difficult times.
The success rate of Bain capital wasn't particularly good with the companies they bought out. Approximately one quarter of them went into bankruptcy. Essentially, buy a large stake in a company, charge that company exorbitant consulting fees, and slash the workforce (or send it overseas). If it worked, they made a fortune. If the company failed, they still made money in many cases. There's a reason why people often call it vulture capitalism.
To be fair, it was Romney's job to make money for his own company and he did a good job of that. But he was often toxic for the companies Bain bought and almost always toxic for the people who worked at them.
It's obvious neither ThinkProgress nor you understand private equity so here's a brief primer:
What is private equity? Well it has three elements, two of which are in the name. To be a private equity investor, you invest in equity, meaning either the stock of a public company or a stake in a private company. You would also be an activist investor rather than a passive one. Most people are passive, meaning they buy stock for the purpose of dividends or price increases but don't care how the company is run or what it produces. Activist investors seek to change management or make decisions that change the company's operations. And private equity investors carry the option (which they don't always use) to take the company private, de-listing them from stock markets if they're publicly traded, then try to sell them to other investors or taking them public again.
Bain typically looked for undervalued companies rather than poorly managed ones. What did they do at such companies? Usually they tell management to take on more debt and pay bigger dividends, i.e. return equity to the investors. They usually try to make the company grow more aggressively, and this is where Romney has a so-so record of improving profitability or return on capital.
Now, is someone like Bain good for a company? Well, it depends where you are. If you're a stockholder in a company whose value has stagnated or started to slide backwards, actually Bain IS good for you. Their actions will boost the price and return your equity to you at a higher price than if they weren't. If you're an employee, then the news is mixed. The company is being more aggressive about growth but it's doing it with debt, which is kind of all-in. If it doesn't work, then the company will fail and you'll be laid off. If you're in management, either you're getting Romney to help you cash out or he's going to push you out. That's either very good or very bad for you.
Is Bain good for society? Most people's answer that Romney is a job killer miss the point. The success of a business is never measured in how many people it hires but in the value it creates for customers and owners. If it creates no value, customers won't buy and owners won't do the venture. If the business is successful, then it will create jobs. When we speak with admiration of Google as a charitable company that hires lots of people, you can't forget that these are the privileges of being a highly successful company. If they did those things while losing money, you'd just call them crazy. That's bad for both their stockholders and the people they employ.
So when you blame Romney for investing in companies that ultimately went bankrupt, most of the time you're ignoring the glaring problems that existed long before Romney ever showed up. The company he bought that made cameras didn't die because of Bain, it died because they were still manufacturing film when digital photography and the internet were changing the market.
On August 15 2012 12:06 Rassy wrote: And how did romney make that monney? By working verry hard and beeing verry good at his job, turning around businesses in difficult times.
The success rate of Bain capital wasn't particularly good with the companies they bought out. Approximately one quarter of them went into bankruptcy. Essentially, buy a large stake in a company, charge that company exorbitant consulting fees, and slash the workforce (or send it overseas). If it worked, they made a fortune. If the company failed, they still made money in many cases. There's a reason why people often call it vulture capitalism.
To be fair, it was Romney's job to make money for his own company and he did a good job of that. But he was often toxic for the companies Bain bought and almost always toxic for the people who worked at them.
They're using a poor methodology to measure Bain's success. Bankruptcy doesn't usually mean that the company is eradicated. A company after bankruptcy could still be much larger than when you first bought it.
It also needs to be noted that Bain often bought companies already in trouble. Many would have likely defaulted if Bain hadn't stepped in anyways.
You really can't be profitable driving companies into the ground. It might happen once in a while by luck but that's it.
You are correct on your first point. Bankruptcy isn't necessarily a bad thing, especially for companies that are loaded down with debt. However, it is a bit awkward when you look at the quote from the next guy who is also defending Romney's Bain record.
Then you say that they were going to end up in bankruptcy anyways so it's not his fault. So what exactly did Bain do for them and why did Bain get consulting fees so that a company could do exactly what it was going to do anyways? Finally, there are very clear examples of Bain making profits on companies that were destroyed. Try this one: http://www.reuters.com/article/2012/01/06/us-campaign-romney-bailout-idUSTRE8050LL20120106
Bain typically looked for undervalued companies rather than poorly managed ones. What did they do at such companies? Usually they tell management to take on more debt and pay bigger dividends, i.e. return equity to the investors. They usually try to make the company grow more aggressively, and this is where Romney has a so-so record of improving profitability or return on capital.
This is very interesting. So he's taking a well-managed stable company and making it instable (taking on more debt while paying out its profits and cash reserves)? He's putting the company in a position where it will either make more money or it will crash and burn when it didn't need to. Is that considered good for anyone but his company which will be guaranteed consulting fees to offset the failures while augmenting the sucesses?
So when you blame Romney for investing in companies that ultimately went bankrupt, most of the time you're ignoring the glaring problems that existed long before Romney ever showed up. The company he bought that made cameras didn't die because of Bain, it died because they were still manufacturing film when digital photography and the internet were changing the market.
It's a good thing he didn't invest in Apple. They were dead in the water creating a product that few people still wanted as the PC dominated more and more of the market. Instead of gutting their R&D and anything else that didn't immediately turn a profit, they went into R&D and produced a few new products that are almost considered staples of our daily lives now.
Instead, Bain invests in a company that manufactures film, becomes their consultant, and never says, "Hey, you guys might want to take your equipment and manpower and convert it to __________ because film is dead"?
From every report I've seen, Bain guts the workforce and/or takes on more debt. It never actively changes a company (like an activist would), it simply guts them. Bain strips out anything that doesn't immediately look good on a balance sheet (say goodbye to R&D and the company's future), and then resells a company with prettier financial numbers, but a highly questionable future. Is that really a good thing for anyone but Bain?
i'd have thought the idea that the value of a company to society is solely measured by the profit it generates for owners and consumers was already dead. apparently not.
On August 15 2012 12:06 Rassy wrote: And how did romney make that monney? By working verry hard and beeing verry good at his job, turning around businesses in difficult times.
The success rate of Bain capital wasn't particularly good with the companies they bought out. Approximately one quarter of them went into bankruptcy. Essentially, buy a large stake in a company, charge that company exorbitant consulting fees, and slash the workforce (or send it overseas). If it worked, they made a fortune. If the company failed, they still made money in many cases. There's a reason why people often call it vulture capitalism.
To be fair, it was Romney's job to make money for his own company and he did a good job of that. But he was often toxic for the companies Bain bought and almost always toxic for the people who worked at them.
They're using a poor methodology to measure Bain's success. Bankruptcy doesn't usually mean that the company is eradicated. A company after bankruptcy could still be much larger than when you first bought it.
It also needs to be noted that Bain often bought companies already in trouble. Many would have likely defaulted if Bain hadn't stepped in anyways.
You really can't be profitable driving companies into the ground. It might happen once in a while by luck but that's it.
You are correct on your first point. Bankruptcy isn't necessarily a bad thing, especially for companies that are loaded down with debt. However, it is a bit awkward when you look at the quote from the next guy who is also defending Romney's Bain record.
Then you say that they were going to end up in bankruptcy anyways so it's not his fault. So what exactly did Bain do for them and why did Bain get consulting fees so that a company could do exactly what it was going to do anyways? Finally, there are very clear examples of Bain making profits on companies that were destroyed. Try this one: http://www.reuters.com/article/2012/01/06/us-campaign-romney-bailout-idUSTRE8050LL20120106
No, I never said it wasn't his fault. I'm putting it in the context that he wasn't buying up perfectly healthy companies and they ended up in bankruptcy. They were companies in trouble already and that makes them more risky - it makes bankruptcy more likely from the get-go.
A lot of the criticism is that the companies were left with "too much debt." But what is too much debt? You only know it is too much after you default.
If they knew it was too much debt ex-ante the loan would never be made.
Bain typically looked for undervalued companies rather than poorly managed ones. What did they do at such companies? Usually they tell management to take on more debt and pay bigger dividends, i.e. return equity to the investors. They usually try to make the company grow more aggressively, and this is where Romney has a so-so record of improving profitability or return on capital.
This is very interesting. So he's taking a well-managed stable company and making it instable (taking on more debt while paying out its profits and cash reserves)? He's putting the company in a position where it will either make more money or it will crash and burn when it didn't need to. Is that considered good for anyone but his company which will be guaranteed consulting fees to offset the failures while augmenting the sucesses?
Consulting fees aren't free money... you do need to work to earn them (and pay people for that work). Also any money pulled out in the form of consulting fees lowers the value of the company (its less profitable now). Its not some free money siphon.
So when you blame Romney for investing in companies that ultimately went bankrupt, most of the time you're ignoring the glaring problems that existed long before Romney ever showed up. The company he bought that made cameras didn't die because of Bain, it died because they were still manufacturing film when digital photography and the internet were changing the market.
It's a good thing he didn't invest in Apple. They were dead in the water creating a product that few people still wanted as the PC dominated more and more of the market. Instead of gutting their R&D and anything else that didn't immediately turn a profit, they went into R&D and produced a few new products that are almost considered staples of our daily lives now.
Instead, Bain invests in a company that manufactures film, becomes their consultant, and never says, "Hey, you guys might want to take your equipment and manpower and convert it to __________ because film is dead"?
From every report I've seen, Bain guts the workforce and/or takes on more debt. It never actively changes a company (like an activist would), it simply guts them. Bain strips out anything that doesn't immediately look good on a balance sheet (say goodbye to R&D and the company's future), and then resells a company with prettier financial numbers, but a highly questionable future. Is that really a good thing for anyone but Bain?
You can't make a company more valuable simply by gutting it to death. Bain didn't have some unlimited pool of fools to buy stripped companies from them.
There's plenty of examples of Bain providing more money to companies so they can invest in new equipment or merge with other businesses... including your steel mill example.
You know I would only be half surprised if parties were working together. Just throw all this shit around and let their respective supporters turn on each other and fight tooth and nail. To keep the plebs from uniting lol. Either way true "change" never happens just the same group in power.
Bain typically looked for undervalued companies rather than poorly managed ones. What did they do at such companies? Usually they tell management to take on more debt and pay bigger dividends, i.e. return equity to the investors. They usually try to make the company grow more aggressively, and this is where Romney has a so-so record of improving profitability or return on capital.
This is very interesting. So he's taking a well-managed stable company and making it instable (taking on more debt while paying out its profits and cash reserves)? He's putting the company in a position where it will either make more money or it will crash and burn when it didn't need to. Is that considered good for anyone but his company which will be guaranteed consulting fees to offset the failures while augmenting the sucesses?
That's quite a leap, isn't it? Companies can be undervalued for many reasons. "Undervalued" doesn't necessarily imply that they're hidden bargains or that they don't need help. And let's face it, you don't know the circumstances of any of the companies that Bain dealt with. Maybe they didn't scale well and couldn't handle boosted growth. Maybe they refused to take the advice or projects that Bain suggested. You know that happens all the time in business, right?
It's a good thing he didn't invest in Apple. They were dead in the water creating a product that few people still wanted as the PC dominated more and more of the market. Instead of gutting their R&D and anything else that didn't immediately turn a profit, they went into R&D and produced a few new products that are almost considered staples of our daily lives now.
You have this narrative of Apple but don't bother with any details. Apple DID ask someone to come in and help: Steve Jobs. Steve Jobs is the ultimate activist investor for a poorly managed company. He fired the management team and refocused the company on specific projects. It's not like Apple magically just changed their fortune by pouring money into R&D. Jobs would loudly and vocally challenge employees to do better, to put it bluntly, he was a slave driver.
As far as Bain gutting companies by contrast, that's just a difference in narrative. As above, you don't know the details of these companies they're gutting. Maybe some of them deserve it. If a company is worth more to society dead than alive, then Bain did the right thing to gut the assets and sell them rather than let the company die a slow and agonizing death that cripples the community (see: Rust Belt, Detroit). You should note - companies, like people, inevitably die. If a company no longer provides good value to consumers or investors, it has failed and should shut down.
Use a different example, one whose result you don't know: RIM. Their finances have floundered and they haven't had a good project in years. Should they refocus and spend money on new R&D or should they close their doors and shut down? Should they bring in someone new to try to shake things up? It's really not an easy question.
My point is that these things are really a lot more sophisticated than you're being led to believe or trying to lead others to believe. If you still don't think Romney would be a good president, that's fine. But think that for a good reason. That he worked in private equity and was good at his job isn't persuasive.
On August 15 2012 17:00 oneofthem wrote: i'd have thought the idea that the value of a company to society is solely measured by the profit it generates for owners and consumers was already dead. apparently not.
The value of a company to society is all about how many jobs it has (including subcontractors and indirect job-creation but only in the country) and how much netto-export it creates.
Jobs are making more people self-sustaining and thus going from costing the society to helping the society. having a netto export is a huge advantage for the countrys economy for obvious reasons.
Talking about the owners lining their pockets being good is all about how those money are used.
On August 15 2012 17:00 oneofthem wrote: i'd have thought the idea that the value of a company to society is solely measured by the profit it generates for owners and consumers was already dead. apparently not.
How do you measure the value of a company to society?
On August 15 2012 17:00 oneofthem wrote: i'd have thought the idea that the value of a company to society is solely measured by the profit it generates for owners and consumers was already dead. apparently not.
How do you measure the value of a company to society?
The value of a company to society is measured by the value of the product or good they produce for society, which is of course measured by the quantity and price that people are willing to pay for that product minus the cost of producing the product, which is of course...
Profit.
If it makes people happy, we could say Profit minus Negative Externalities, but such things are much more SUBJECTIVE. Also profit is only measured value assuming there aren't government or other artificial barriers to entry into a market, such as exist in health care or higher education.
On August 15 2012 17:00 oneofthem wrote: i'd have thought the idea that the value of a company to society is solely measured by the profit it generates for owners and consumers was already dead. apparently not.
How do you measure the value of a company to society?
The value of a company is measured by the value of the product or good they produce for society, which is of course measured by the quantity and price that people are willing to pay for that product minus the cost of producing the product, which is of course...
Profit.
If it makes people happy, we could say Profit minus Negative Externalities, but such things are much more SUBJECTIVE.
Wouldn't it be the aggregate of consumer surplus plus Net Externalities? Or perhaps the aggregate of both consumer and producer surplus plus Net Externalities? This is coming from my meager understanding of economics. Regulations (like price floors/ceilings, quotas) and taxes cause deadweight loss to occur however they might result in Positive Externalities (sometimes to global society, sometimes to a local society such as your country/state/city/town). And like you said, such things are much more subjective next to definite measures like sale price and cost.
On August 15 2012 17:00 oneofthem wrote: i'd have thought the idea that the value of a company to society is solely measured by the profit it generates for owners and consumers was already dead. apparently not.
How do you measure the value of a company to society?
The value of a company is measured by the value of the product or good they produce for society, which is of course measured by the quantity and price that people are willing to pay for that product minus the cost of producing the product, which is of course...
Profit.
If it makes people happy, we could say Profit minus Negative Externalities, but such things are much more SUBJECTIVE.
Wouldn't it be the aggregate of consumer surplus plus Net Externalities? Or perhaps the aggregate of both consumer and producer surplus plus Net Externalities? This is coming from my meager understanding of economics. Regulations (like price floors/ceilings, quotas) and taxes cause deadweight loss to occur however they might result in Positive Externalities (sometimes to global society, sometimes to a local society such as your country/state/city/town). And like you said, such things are much more subjective next to definite measures like sale price and cost.
You are probably on the right track, I wasn't trying to be too technical just to illustrate the connection between profits and the benefits of voluntary exchange.
On August 15 2012 17:00 oneofthem wrote: i'd have thought the idea that the value of a company to society is solely measured by the profit it generates for owners and consumers was already dead. apparently not.
How do you measure the value of a company to society?
The value of a company to society is measured by the value of the product or good they produce for society, which is of course measured by the quantity and price that people are willing to pay for that product minus the cost of producing the product, which is of course...
Profit.
If it makes people happy, we could say Profit minus Negative Externalities, but such things are much more SUBJECTIVE. Also profit is only measured value assuming there aren't government or other artificial barriers to entry into a market, such as exist in health care or higher education.
That's certainly the easiest way to quantify a certain form of value, but when people use the phrase "value to society" they probably mean something more like contribution to the well-being of people, which is a lot harder to quantify and not necessarily in a linear (or even positive) relation to profit at all.
On August 16 2012 05:53 Mohdoo wrote: If everything here is true, which is presumably is, I don't see how Ryan could be considered moderate:
Eh, I think some of those points may be off. For example, I know that failing to support the Lilly Ledbetter act does not mean that you're against the EPA. All it means that is that you do not favor looser statutes of limitations for reporting Title VII claims based on unequal payment than what is already allowed for.
On August 16 2012 05:53 Mohdoo wrote: If everything here is true, which is presumably is, I don't see how Ryan could be considered moderate:
Eh, I think some of those points may be off. For example, I know that failing to support the Lilly Ledbetter act does not mean that you're against the EPA. All it means that is that you do not favor looser statutes of limitations for reporting Title VII claims based on unequal payment than what is already allowed for.
Here are sources:
Sources:
1. "Paul Ryan: Just Plain Bad for Women," New York Daily News, August 13, 2012
The big thing is planned parenthood and birth control generally speaking. Regardless of how someone feels about abortion, you're not going to find many people outside the far right who disagree with birth control or planned parenthood. A huge majority of teenage girls have used planned parenthood at some time in their lives, most often to obtain birth control in their teens. There's a lot more wrong with Ryan than just his equal pay voting.
On August 16 2012 05:53 Mohdoo wrote: If everything here is true, which is presumably is, I don't see how Ryan could be considered moderate:
Eh, I think some of those points may be off. For example, I know that failing to support the Lilly Ledbetter act does not mean that you're against the EPA. All it means that is that you do not favor looser statutes of limitations for reporting Title VII claims based on unequal payment than what is already allowed for.
Here are sources:
Sources:
1. "Paul Ryan: Just Plain Bad for Women," New York Daily News, August 13, 2012
The big thing is planned parenthood and birth control generally speaking. Regardless of how someone feels about abortion, you're not going to find many people outside the far right who disagree with birth control or planned parenthood. A huge majority of teenage girls have used planned parenthood at some time in their lives, most often to obtain birth control in their teens. There's a lot more wrong with Ryan than just his equal pay voting.
Not just teen girls, I've used planned parenthood as a teen boy, and now as a young adult. Not only do they supply birth control, they supply other reproductive health services like STD tests, as well as checkups . The place is affordable, helpful, nice, and awesome.
On August 16 2012 05:53 Mohdoo wrote: If everything here is true, which is presumably is, I don't see how Ryan could be considered moderate:
Eh, I think some of those points may be off. For example, I know that failing to support the Lilly Ledbetter act does not mean that you're against the EPA. All it means that is that you do not favor looser statutes of limitations for reporting Title VII claims based on unequal payment than what is already allowed for.
Here are sources:
Sources:
1. "Paul Ryan: Just Plain Bad for Women," New York Daily News, August 13, 2012
The big thing is planned parenthood and birth control generally speaking. Regardless of how someone feels about abortion, you're not going to find many people outside the far right who disagree with birth control or planned parenthood. A huge majority of teenage girls have used planned parenthood at some time in their lives, most often to obtain birth control in their teens. There's a lot more wrong with Ryan than just his equal pay voting.
I don't doubt that #2 and #3 are true. I know that the subtext of #1 is false. I think #4 is exaggerated if not false. My understanding is that Ryan has not said that he supports criminalizing abortions so much as he has said that he opposes abortion and would leave the issue for the states to regulate. As for #5, I haven't seen the legislation at issue, but I find it hard to believe that he or anyone else would oppose all forms of in vitro fertilization. I'm guessing that it's wrong.
On August 16 2012 05:53 Mohdoo wrote: If everything here is true, which is presumably is, I don't see how Ryan could be considered moderate:
Eh, I think some of those points may be off. For example, I know that failing to support the Lilly Ledbetter act does not mean that you're against the EPA. All it means that is that you do not favor looser statutes of limitations for reporting Title VII claims based on unequal payment than what is already allowed for.
Here are sources:
Sources:
1. "Paul Ryan: Just Plain Bad for Women," New York Daily News, August 13, 2012
The big thing is planned parenthood and birth control generally speaking. Regardless of how someone feels about abortion, you're not going to find many people outside the far right who disagree with birth control or planned parenthood. A huge majority of teenage girls have used planned parenthood at some time in their lives, most often to obtain birth control in their teens. There's a lot more wrong with Ryan than just his equal pay voting.
I don't doubt that #2 and #3 are true. I know that the subtext of #1 is false. I think #4 is exaggerated if not false. My understanding is that Ryan has not said that he supports criminalizing abortions so much as he has said that he opposes abortion and would leave the issue for the states to regulate. As for #5, I haven't seen the legislation at issue, but I find it hard to believe that he or anyone else would oppose all forms of in vitro fertilization. I'm guessing that it's wrong.
Ryan co-sponsored a “personhood” amendment that would give legal rights to a fetus starting at conception. Ryan joined 62 other Republicans in co-sponsoring the Sactity of Human Life ActSanctity of Human Life Act, an anti-abortion measure declaring that a fertilized egg “shall have all the legal and constitutional attributes and privileges of personhood.” This would outlaw abortion, some forms of contraception and in-vitro fertilization.
Ryan supports banning all abortions, even in cases of rape and incest. In addition to his support of the personhood amendment, Ryan won his congressional seat in 1998 by emphasizing his opposition to all abortions without exceptions. But this puts him at odds with Mitt Romney, who has said he would allow exceptions in cases or rape and incest.
Ryan is a co-sponsor of the Sanctity of Human Life Act, which defines a fertilized egg as a human being — similar to recent “personhood” efforts in a handful of states. He also won his seat in 1998 by running to his opponent’s right on abortion and emphasizing no exceptions. Romney has suggested he supports a constitutional personhood legislation, but has also said that he would allow for abortions in cases of rape and incest.
It definitely seems like he is opposed to abortion in the case of rape and incest. How many independents do you think that sits well with? No planned parenthood and no abortion due to rape. That's just screwed up.
EPT![[image loading]](http://i.imgur.com/2yxDx.jpg)
