Monday, July 16, 2012

When Is Thievery Illegal?
Yikes! I read this and get sickened by Bain's ability to pay $60,000,000 in dividends on a firm that has a cash flow of $4.7M. Even if the profit margin were 30%, that means they only made $1.4M. So your investment dividend is 40 times higher than your profit. That would be like me bringing home after taxes 25 cents and getting a bonus of $10. Who would pay that? You don't have the money. Bonuses are paid on PROFIT. In the case of Dade, Bain (Romney's firm) made $100,000,000 in management fees annually and the debt increased to over $1,000,000,000. Who the hell takes that much money when there is no profit--no real substance there??!!

And even worse, who loans them money that many times over the actual cash flow and asset level. Homeowners did not even do things this bad, as a general rule when they refinanced homes in the 1990s to make improvements or even just take vacations, because in many cases the value of the property (the asset) appreciated. What Bain was doing was the same scheme, but then they left and in many cases the taxpayers had to bail out workers and pensions because they took the money.

an honest question--just because they got out before bankruptcy, probably because they could see it coming, doesn't that still make it thievery?

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