Mitt Romney's capitalism for suckers

Mitt Romney and Bain Capital is what happens when the government gets corrupted by the rich to make what the great venture capitalist Vinod Khosla calls "incumbency capitalism" - capitalism rigged in favor of the people who already are rich. The law is supposed to make sure that managers and owners of corporations do not take advantage of the corporate structure to enrich themselves by having the corporation pay them with money owed to someone else. For example, if you create a corporation that gets an advance payment to build a house, gives you all the money as a "dividend", and then goes out of business without building the house, you will most likely be forced to give the money up and also spend time in jail. But, thanks mostly to 40 years of conservative Judges "reinterpreting" law, if you do the same trick on a large enough scale, with the assistance of enough bankers and corporate lawyers and tax lawyers and so on, you can keep the money and leave the debts to the little people - exactly what Mitt Romney did.

In fact all over America, there are companies that have failed leaving huge piles of unpaid debt behind them (like pensions, unpaid salaries, unpaid taxes ... ) or companies that are barely surviving under huge burdens of debt - because someone smart and well connected like Mitt Romney has scooped out all the money from the company and walked away. With several companies it owned, Bain Capital had the company borrow hundreds of millions of dollars, paid itself "dividends" and fees, and then stepped back as the company collapsed. It needs a lot of money to pull of this kind of scam - you have to start as rich or well connected - but profits are enormous. Bain was able to take home hundreds of millions for investments of 10s of millions in a couple of years and do the same thing several times over.

Corporations are complicated legal structures that are supposed to encourage innovation and enterprise by making it somewhat less risky for people to start companies. It used to be that when a business failed, the business partners would have to pay debts themselves. A corporation is a special legal way to setup a business so the business is responsible for its own debts and the owners have "limited liability". The idea is that people will be more willing to start new businesses if they can separate their personal assets from the corporate assets and keep their homes in the event that the business fails. But there are obvious ways to abuse this kind of system and so corporate managers and owners are supposed to be held accountable if they enrich themselves by looting the company. The laws require that corporations cannot just give money away, they have to either be distributing profits to owners or getting value for whatever it is they are paying for. About 40 years ago, the Olin Foundation, set up by right wing nut Chemical Company billionaires, began funding cushy law school "endowed chairs", and fancy vacations for Federal Judges (I mean, "seminars") where they could push a theory called "law and economics".  That theory brings right wing economic ideas (trickle down and "supply side")  into interpretation of law to essentially destroy traditional ideas of the duties of managers and owners - even when they need to ignore the plain meaning of written law to do so.

When Republicans or Conservatives or Libertarians say they want the government out of business, what they mean is that the unfair legal protection for incumbency capitalism that they have constructed over 40 years should never be challenged. And you can see what kind of world they have in mind when you notice how much they respect and cheer for the corporate looting that Bain did, and how much they hate and fear people like Elon Musk who started a rocketship making company. Musk is everything they dislike, a real entrepreneur, taking real risks, with his own money, to innovate in a way that might displace the incumbents - the guys who are already funding  "Free Market" Professors and "small government" political campaigns.

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Time to grow up

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