Get Rid of Capitalism?

[Fife]

[Hanarchy Montanarchy]

The mismanagement of Sears reflects an ongoing pattern: private equity takeover artists that benefit from hobbling the companies they purchase. Golden Gate Capital and Blum Capital, the two firms behind footwear chain Payless, paid themselves $700 million in dividends in 2012 and 2013, all on the back of the company. Payless filed for bankruptcy this year, closing 400 stores. Toys“R”Us filed for bankruptcy in September, unable to sustain between $400-$500 million in annual interest payments on $5.2 billion in long-term debt. Buyout managers, including Bain Capital and longtime firm Kohlberg Kravis Roberts, stripped out nearly $2 billion in cash while debt levels rose.

This is a robbery in progress. Private equity firms borrow massively to buy companies, and use corporate cash reserves to pay themselves back. Workers who supply the value to the business see nothing; in fact, to service the debt, companies usually cut staff. When the retailer collapses under the borrowing weight, all workers lose their jobs. And even when sales go up, like they have by 5 percent annually in the toy sector over the past five years, dominant toy sellers like Toys“R”Us cannot compete because of the debt burden. The company’s profitability was increasing when it filed for bankruptcy.

If only there wasn't a dang government.

[SuburbanFarmer]

The mismanagement of Sears reflects an ongoing pattern: private equity takeover artists that benefit from hobbling the companies they purchase. Golden Gate Capital and Blum Capital, the two firms behind footwear chain Payless, paid themselves $700 million in dividends in 2012 and 2013, all on the back of the company. Payless filed for bankruptcy this year, closing 400 stores. Toys“R”Us filed for bankruptcy in September, unable to sustain between $400-$500 million in annual interest payments on $5.2 billion in long-term debt. Buyout managers, including Bain Capital and longtime firm Kohlberg Kravis Roberts, stripped out nearly $2 billion in cash while debt levels rose.

This is a robbery in progress. Private equity firms borrow massively to buy companies, and use corporate cash reserves to pay themselves back. Workers who supply the value to the business see nothing; in fact, to service the debt, companies usually cut staff. When the retailer collapses under the borrowing weight, all workers lose their jobs. And even when sales go up, like they have by 5 percent annually in the toy sector over the past five years, dominant toy sellers like Toys“R”Us cannot compete because of the debt burden. The company’s profitability was increasing when it filed for bankruptcy.

If only there wasn't a dang government.

That’s been a thing since the 80s, actually. Vulture Capital.

[Speaker to Animals]

Vulture funds are something different than that. They purchase sovereign debt at a discount and then use lobbying in the federal government to seize that nation's assets in US federal courts under comity.

Vulture funds are far more evil than these guys. For I stance, Bush Jr. was partly funded by a culture fund manager. That manager would purchase African sovereign debt at a discount. Then Bush would male a big show about his compassionate conservatism by taking many millions of our tax dollars and giving it to those African nations as alleged humanitarian aid. But the whole time he knew his benefactor was waiting to seize that money via federal courts.

[Fife]

[Fife]

[SuburbanFarmer]

More complex than it looks.

[Fife]

[Hanarchy Montanarchy]

Yes, the argument for public infrastructure is that it is too complicated for private industry to manage.

Good work libertarians, you are all very knowledgeable about economics, and have the highest-info opinions.

[Martin Hash]

Libertarians want everyone to pay tolls, and for them to own the roads.