A Primer on Greed

OK, boys and girls.  The word for today is:

greed [greed] n

strong desire for more: an overwhelming desire to have more of something such as money than is actually needed

Let us illustrate this word with an admittedly absurd example.

- I need enough food to keep from starving to death.

- I need enough food to satisfy my hunger.

- I need extra food to store away in my home to keep me from running out someday.

- Just in case the food runs out in my home, I need a warehouse (or maybe 2 or more) to be able to fill up with more food.  After all, one can never have enough!

- Whew!  All this food doesn’t seem like it’s quite enough.  I may well have to steal some. Maybe others won’t have enough – but that’s their problem!  I may land up going to jail, but it’s a chance I have to take because…repeat after me…one can never have enough!

So this is indeed an absurd example.  Or is it?

If we substitute ‘money’ for food and ‘banks’ for warehouses, we can come up with plenty of real life examples of greed.

For example, there is today’s favorite example of someone who is filthy rich, Mitt Romney who is reputedly worth about a quarter billion dollars.  Romney and his company, Bain Capital had an unlimited appetite for making millions upon millions of dollars even though many people lost their jobs in the process.  And then there are all of those overseas investments in places like the Cayman Islands (presumably to avoid taxes).  But is the relatively small amount of money he saved by doing this worth all of the grief he is taking from the need to hide all of this by not releasing tax returns that people from both parties are demanding?

Then there is the flap over Ralph Lauren outfitting the 2012 US Olympic team with clothing made in China.  Look, I get it.  Chinese labor is much cheaper than ours.  So when selling goods in a very price sensitive marketplace, manufacturers may well have to cut costs in every way possible to stay competitive.  But a look at the Ralph Lauren website shows for example, men’s polo shirts for $145 up to the double breasted blazer for a cool $795.  It is obvious that these upscale items are hardly price sensitive and are likely to be hugely profitable for the company.  How much of that huge profit would they lose out on if this clothing was made by American workers? 

A similar argument can be made about Apple and its very profitable iPhone and iPad which are also manufactured in China.  To add insult to injury, Apple has received a great deal of criticism over the horrid labor conditions in Chinese factories making these devices.

In 2010, workers in China planned to sue iPhone contractors over poisoning by a cleaner used to clean LCD screens. One worker claimed that he and his coworkers had not been informed of possible occupational illnesses.  After a spate of suicides in a Foxconn facility in China making iPads and iPhones, albeit at a lower rate than in China as a whole, workers were forced to sign a legally binding document guaranteeing that they would not kill themselves.  In 2011 Apple admitted that its suppliers' child labor practices in China had worsened.

 

Workers in factories producing Apple products have also been exposed to n-hexane, a neurotoxin that is a cheaper alternative than alcohol for cleaning the products.

See the above link for footnotes to support these assertions.  Suicides and child labor issues aside, it’s beyond belief that Apple was willing to see their factory workers exposed to a toxic chemical for the sake of preserving every penny of profits. But when you are a corporation, you can never have too much profit!

And check out this list of notable accounting scandals which include Enron and Bernie Madoff.  These are examples of CEOs and other executives who were already fabulously wealthy resorting to crime to further pad their wealth with many of them now deservedly serving jail time.

So what do these super wealthy individuals do with all of this money?  Bill and Melinda Gates along with Warren Buffett set up a philanthropic foundation aimed towards helping people in poverty.  And there are many others who share their wealth in similar ways who are not as well known.

But what is most disturbing are the increasing efforts of some of the super rich to buy politicians and elections.  Yes, money has always been a significant part of politics, but the infamous Citizens United Supreme Court decision opened the money floodgates wide open by allowing unlimited political contributions to persuade the electorate to see things their way.  It has already had an effect on the 2010 elections and will undoubtedly figure prominently in the upcoming 2012 elections.

One of the efforts by the super rich centers on the estate tax lobby.

A 2006 report by Public Citizen and United for a Fair Economy -- both nonprofits opposed to concentrated wealth -- identified 18 families financing a coordinated campaign to repeal the estate tax altogether. Among the leading names behind that push: the Gallos (E&J Gallo Winery), the Kochs (Koch Industries), the Mars' (Mars Inc.), the Waltons (Wal-Mart), and the Wegmans (Wegmans Food Markets). At the time, the report estimated the families' collected net worth to be at least $185 billion, roughly equal to the market cap of Google today.   

A couple of the above families are worth a special mention.

Here is a list of the Walton family fortune as of 2012 published by Forbes:

- Christy Walton and family US$25.3 billion

- Jim Walton US$23.7 billion

- Alice Walton US$23.3 billion

- S. Robson Walton US$23.1 billion

- Ann Walton Kroenke US$3.9 billion

- Nancy Walton Laurie US$3.4 billion

Total: US$102.7 billion

To put the above number into some perspective, this one family has a net worth equal to the combined wealth of the bottom 30 percent of all Americans.  Remember “filthy rich” Mitt Romney?  This is equal to about 400 times Romney’s estimated wealth.

While all of this incredible wealth has been accumulated, Wal-Mart has been notorious for low pay and benefits for its employees over the years and has dealt with unions as mortal enemies to be destroyed.  But just think about how a tiny fraction of this fortune directed towards providing a living wage and good health benefits for their workers would help the lives of so many families who are struggling to stay above water.  Obviously, they haven’t thought about it.

And then there are the Koch Brothers who at one time were unknown to most but have since been profiled in the media (but probably not on Fox News or others on the right) for their political activity that consists of buying politicians to promote their agenda of among other things, environmental deregulation (to save money instead of preventing and cleaning up pollution), climate change denial (so we will continue to use the fossil fuels they produce), and union busting (to share the least possible amount of money with workers).   

To get a better sense of what this is all about, please check out this video link from the excellent Robert Greenwald documentary, Koch Brothers Exposed    For those who are interested, here is one of my previous postings, The Koch Brothers - The Most Powerful People You've Never Heard Of.  They have especially benefited from the aforementioned Citizens United Supreme Court decision allowing unlimited political contributions. 

So this ends our little primer on the subject of greed.  What can we learn from all of this?  It’s that greed is all around us and will be as long as people walk the face of the earth. While some will get the lion’s share and others get the crumbs, there will still be some who will come back to go after the crumbs they missed the first time around. And while we can’t get rid of greed in this world, we can do a better job of recognizing it and calling it out for what it is. 

For example, when we see politicians who advocate more tax giveaways for the wealthiest among us while asking for sacrifice from others of their safety net, that is greed!  And when fabulously rich CEOs and their bought politicians are out to crush the efforts of workers to collectively bargain over living wages and working conditions, that is greed! 

While the greedy can do their best to buy the government they want, when we go to vote, we can send a message to all of them.  That unlike what the fictional Gordon Gekko from the movie, Wall Street had to say on the subject, greed is NOT good!  

Still Worries over the Affordable Care Act

Those who supported the Affordable Care Act, often referred to derisively by its opponents as “Obamacare”, are rejoicing over the recent Supreme Court decision to keep it largely intact.  But there are some who are worried about whether the future Medicaid expansion that is an important part of this law was fatally weakened by a part of this decision.

One of the fundamental purposes of the ACA is to expand health insurance coverage to as many of the estimated 50 million uninsured Americans as possible. Many of the uninsured earn not much more than what the government has established as the poverty line.

In 2010, in the United States, the poverty threshold for one person under 65 was US$11,344 (annual income); the threshold for a family group of four, including two children, was US$22,133.  According to the U.S. Census Bureau data released on September 13, 2011, the nation's poverty rate rose to 15.1 percent in 2010.

Since Medicaid covers people at or below the poverty line, those who are even slightly above the poverty line are now ineligible for coverage. But at the same time, they still do not make enough to afford health insurance – especially those with preexisting conditions. So one of the important provisions of the ACA was to expand Medicaid to those making up to 133% of the poverty line.

Although this is a federal program, it is up to the individual states to decide whether to accept the money from the Feds and implement this expansion.  Part of the ACA included some ‘gentle persuasion’ saying that if an individual state refused the expanded Medicare, it would lose all of its existing Medicare funding.

But this part of the law was struck down by the Court.

In a 7-to-2 decision, with Justices Elena Kagan and Stephen G. Breyer joining the five conservatives, the court ruled that the new provisions of the act giving coverage to all Americans under 133 percent of the poverty level constituted not an expansion of the program but actually a new Medicaid program. Threatening states that did not adopt this provision with termination of all their matching federal Medicaid money, the court said, constituted “a shift in kind, not merely degree.” The court viewed this Medicaid provision as coercion — “withholding of ‘existing Medicaid funds’ is ‘a gun to the head’ ” — that would force states to acquiesce.

I think most fair-minded people would agree that this was overly coercive.  But in striking it down, the result went to the other extreme which gives the federal government almost no leverage over the individual states to comply.

This has given Republican governors in several states the opportunity to publicly renounce the law by saying that they will not accept the money for this expansion.

Republican officials in more than a half-dozen states said they opposed expanding Medicaid or had serious doubts about it, even though the federal government would pick up all the costs in the first few years and at least 90 percent of the expenses after that. 

In writing the law, Congress assumed that the poorest uninsured people would gain coverage through Medicaid, while many people with higher incomes would receive federal subsidies to buy private insurance. Now, poor people who live in a state that refuses to expand its Medicaid program will find themselves in a predicament, unable to obtain either Medicaid or subsidies.

That really sucks!

It’s one thing for ideologues to spout off their views on conservatism and limited government for others in their party to admire.  But is this worth putting human lives in peril for the sake of little more than political posturing?

This appears to be a game of chicken being waged by these governors.  If they can convince their citizens that sticking to conservative principles is more important than insuring as many people as possible, the governors win and those who must go needlessly without health insurance lose.  On the other hand, if enough people catch on to what’s being done to them by their leaders, they will have to back down from their position while risking the wrath of their electorate when they go to the ballot box.

The best guess is that the governors will eventually have to back down.  After all, the deal from the Feds is simply too good for them to turn down.  But the question remains, what kind of person would inflict all of this on others in the first place? 

Home Alone

I had a mishap last month.

I don’t remember passing out, but when I came to, I had a real close-up view of my floor.  I didn’t even know where I was for a few seconds before I recognized the carpet and then realized that I had fallen.

It was an ugly affair.  My glasses were smashed in half.  My nose was broken and bleeding with blood all over the carpeting. Two of my front teeth were loose.  Soon my face was a number of shades of black and blue.

Then I remembered I had to get to the nursing home to be with my mom to help feed her dinner.  My uncle (her brother) told me that he couldn’t make it that day so I had to be there.  So I wiped as much blood as possible off my face and got into the car. 

Shortly after arriving at the nursing home, it occurred to me that walking through the halls with blood streaming down my face just like for the Etrade baby was frowned upon in this establishment!  Three nurses surrounded and pinned me in a hallway against the wall and told me I wasn’t going anywhere.  I told them I had to see my mother.  They told me I wasn’t going anywhere.  An EMT who happened to be nearby told me I was crazy for getting into a car and driving after I had passed out.  I saw it differently.  I was just fulfilling an obligation.

I was sequestered behind the nurses’ station while they made arrangements to get me to the Emergency Room.  I am happy that my face has healed and that my teeth were fixed so I could eat solid foods..

But it was the time between the accident and the healing that was so painful from living alone.

I have taken an informal survey of many of the people in my singles social club (almost all divorced) on how they were doing living alone.  The very solid consensus was that they were extremely happy living alone and wouldn’t have it any other way.  It was all about freedom.  Freedom to do what they wanted at any time they wanted without having to answer to anybody.  But maybe they had controlling spouses which contributed to their divorces in the first place.  Having a partner who allows you enough space provides for companionship when you want it without being stifled which as I see it is the best of both worlds.

But there is a big downside to being alone and that is when we get sick or injured.  Of course we would never leave young children alone to fend for themselves.  And with the elderly, there are all of the devices advertised on TV to alert personnel to call an ambulance when somebody says "I've fallen and I can't get up!" which by the way is now trademarked.

But what about the group of people between childhood and old age who live alone, especially those in middle age like I am.  Yes we get sick or hurt but there doesn’t seem to be the same concern.  We may well have neighbors and friends but often they are so busy with their lives that we rarely see them so it may be awkward to ask them for help.  Having relatives nearby can help but that isn’t always so.

Being alone while hurt or sick for any period of time makes it very difficult to take care of oneself.  This may include eating properly, bathing and grooming, keeping the house or apartment clean, and taking care of the daily mail including the bills that have to be paid on time.  And then there is the issue of loneliness which I haven’t mentioned yet.  When we are feeling well, we can get out and socialize which can fight loneliness.  But when sick or injured and confined to the house, loneliness can be crushing as I can attest.

So what’s the solution to all of this?  Unlike the elderly who can have caregivers and children who have parents, babysitters, or teachers to watch over them, there is no equivalent for other adults.  This is where we need our friends to help.

But simple friendship isn’t enough.  It takes going the extra mile.  If you have a friend or relative or neighbor who lives alone, stay in touch with that person especially if you haven’t seen him or her for awhile.

Most importantly, reach out and convince that person that if they ever need anything that you are there for him or her.  It’s not trademarked and it may be sappy.  But for those in their hour of need, they will be so grateful and in extreme cases, you may even save a life!  

The Common Touch

Back on April 17^th, Cookie Gate was born as described in this Washington Post blog.

It seemed like a good idea at the time. Go to a Pittsburgh suburb. Hang out with a few “regular Americans” and sit and chat about taxes over chips, lemonade and cookies.

And so it was that Mitt Romney, dressed in brown loafers, grey slacks and blue tie with shirt sleeves rolled up, found himself strolling toward a picnic table in Bethel Park on Tax Day for a simple, utterly staged, roundtable with four couples handpicked to have an audience with a man who could be president.

But for Romney, who is not known for his gift of the regular-guy gab, a table, eight regular people, microphones, cameras, cookies, lemonade, reporters, chips, and dead air that needs to be filled with things that people say, can often be a recipe for awkwardness.

“I’m not sure about these cookies,” Romney said, looking at the women and around the table. “They don’t look like you made them. Did you make those cookies? You didn’t, did you? No. No. They came from the local 7-Eleven bakery or wherever.”

Democrats and marketers pounced and “Cookie Gate” was born.

The video of the exchange is in this link.

So what do we make of all of this?  There have been a number of examples where Romney has not exhibited the common touch when speaking to ordinary people.  By the way, the common touch is defined by the free dictionary as the ability of a rich or important person to communicate well with and understand ordinary people.

But the example with the cookies was in a class by itself.  How many of us would ever complain about food we were served by other people (other than in a restaurant)?  What made it more silly is that Romney didn’t even taste the cookies before criticizing them.  Tasting them first, would have avoided the unkind words. And as far as I can determine, Romney never tried any of the cookies so he was unable (or unwilling) to offer an apology to the bakery that made the cookies.

It’s easy to say that some faux pas over some cookies is not going have any effect on the election.  But not so fast!  Politicians on the campaign circuit are regularly expected to interact with the electorate whether it is kissing babies or eating all of the local specialties.  Yes, delivering a speech on foreign policy is OK.  But it’s also about sharing a human side that voters also think is important.  

Will the Supreme Court Kill Obamacare?

This week, the Supreme Court heard 3 days of arguments mostly about whether the Individual Mandate that is part of the Affordable Care Act a.k.a. Obamacare is constitutional.   This challenge was originally started by a group of 26 Republican state attorneys general with the Supreme Court eventually agreeing to hear the arguments this week.

Until the hearings, many believed that the Individual Mandate would be safe because it was protected by the commerce clause of the Constitution.  But with the tone of the questions pursued by the conservative judges, many now believe this is going to be another one of those 5-4 decisions favoring the right.

Here are some of Paul Krugman’s thoughts from his recent op-ed Broccoli and Bad Faith.

Given the stakes, one might have expected all the court’s members to be very careful in speaking about both health care realities and legal precedents. In reality, however, the second day of hearings suggested that the justices most hostile to the law don’t understand, or choose not to understand, how insurance works. And the third day was, in a way, even worse, as antireform justices appeared to embrace any argument, no matter how flimsy, that they could use to kill reform.

Let’s start with the already famous exchange in which Justice Antonin Scalia compared the purchase of health insurance to the purchase of broccoli, with the implication that if the government can compel you to do the former, it can also compel you to do the latter. That comparison horrified health care experts all across America because health insurance is nothing like broccoli.

So how does the individual mandate figure into all of this?  It is part of a 3-legged stool.  Take one of the legs away and the stool collapses.

The first leg:

Insurers cannot deny anybody health insurance based on a pre-existing condition.

Of course this is the point of Obamacare, to provide insurance to those millions of people who have been going without insurance.

The second leg:

All people, including those who are healthy must purchase health insurance.

This is the controversial Individual Mandate.  It is here because if we force insurers to take in all of the sick people, we need to add healthy people to the risk pool or else the premiums will skyrocket.

In addition there is the issue of so-called free riders.  If someone who didn’t sign up for insurance needs hospital treatment because of either illness or an accident, we can’t just deny him treatment so essentially the cost is borne by the other policyholders.

The third leg:

Since we are requiring everybody to buy health insurance, the government will subsidize the cost for those least able to afford the premiums.

So the important question is whether Obamacare would survive if the Individual Mandate is struck down.  And the answer to that is no.  While its opponents may argue about being forced to buy insurance or even broccoli, in reality they have seized upon what they feel is an Achilles’ heel.  And with a very partisan Supreme Court agreeing to hear this case, they may well kill Obamacare when they announce their decision in June.

And if that happens, the question will be what now?  There has been a lot of talk by Republicans about repealing Obamacare but no plans on what they will do to replace it.  Paradoxically, this may indeed mobilize the Democrats this fall! 

Rick Santorum's Other Positions

Now that Rick Santorum has emerged as a serious contender to Mitt Romney for the Republican presidential nomination, a tremendous amount has been written about Santorum’s positions on religion, sex, and contraceptives to the point where his other positions have been largely overlooked.  I would like to explore some of these other positions here.

The best and fairest way to get a candidate’s views is through his website http://www.ricksantorum.com/issues so it is in the candidate’s own words.

I’ll eliminate all regulations promulgated by the Obama Administration which have an economic burden over $100 million dollars, on Day One, including repeal of the EPA rule on CO2 emissions that have already shut down six power plants and furlowed (sic) 500 workers. I will order a review of all regulations, making sure these regulations use sound science and common-sense cost benefit analysis.

It is amusing that Santorum wants to make sure that environmental regulations are based on sound science when he completely rejects current science around climate change in favor of what he sees as biblical evidence.

I will cut spending by $5 trillion over 5 years, repeal ObamaCare and other onerous regulations and cut non-defense spending to 2008 levels..

This is not too much different than the other Republican candidates which amounts to cutting taxes and non-defense spending in exchange for what they call entitlement reform.  It’s easy to say that you are going to cut $5 trillion.  But it takes more guts to say specifically what you’re going to cut.  By process of elimination, the cuts would have to be Social Security and Medicare.  According to a recent AARP Bulletin, Santorum was once in favor of raising the retirement age to 70 but has apparently backed off of that in favor of personal retirement accounts.  And he endorsed the Ryan plan which would turn Medicare into a voucher system.  If the voucher doesn’t cover the cost of the private insurance that seniors would have to purchase on their own, the remainder would come out of pocket.  Some way to save money out of the budget!

Strengthen patient-driven health coverage options such as Health Savings Accounts coupled with high deductible insurance plans (and repeal ObamaCare policies that gut such options)

This too has been proposed by other Republicans.  Health savings accounts allow people to put money away pre-tax so they essentially get a discount on their medical bills equal to the amount of tax they would normally pay on that money.  This is nice for the middle-class and above.  But those in the lower incomes who pay little or no tax get little or no benefit.  And high deductible insurance plans sound nice for those who are not forced to buy them.  But especially for the poor who have such policies, it is tempting to save money by not going to the doctor and getting any needed tests since these visits are usually not covered.  One of the main purposes of insurance is so people will get preventative care before they become seriously ill.  High deductible insurance doesn’t do that.

The federal role in education is very limited.  Education is the responsibility of parents, local schools (public and private), and states in that order.

And during a February 26 appearance on Meet the Press, Santorum had this to add.

I have a plan that says we're going to repeal No Child Left Behind , we're going to get the federal government out of education." I've even said we need to get the state government more out of education, put it back at the local level, have parents and teachers and administrators and the community build a customized program for every single child in America . That's what I believe.

It’s not unusual for a conservative to want the federal government to bail out in favor of a state government.  But Santorum seems to dislike state control, too.  This may create a few problems.  First of all, without any federal and state educational standards, local school districts can teach pretty much anything they want.  What if some rogue school board members want to teach intelligent design?   This would not bother Santorum since while he was a senator, he tried to pass the Santorum Amendment which promotes the teaching of intelligent design while questioning the validity of evolution.

And with state budgets suffering shortfalls, cuts to education have been the result putting more of the financial burden on the school districts.  But if schools have to rely too much on local property taxes, the poorer school districts would be hard pressed to provide a comparable education to the affluent ones.

Rick Santorum is no stranger to the issue of judges.  As a U.S. Senator, he stood against activist judicial nominees time and again.  As a Republican leader in the Senate, he was pivotal in the fight to confirm U.S. Supreme Court Chief Justice Roberts and Justice Alito. 

This is an example of conservative arrogance.  Anything that a liberal judge does is judicial activism while anything a conservative judge does is just interpreting the Constitution.  Chief Justice John Roberts famously said in his confirmation hearing that a judge was just there "to call balls and strikes", apparently meaning that he was not to be a judicial activist.  But many observers feel that the Roberts Court has been the most activist in recent memory, especially considering the Citizens United ruling which is responsible for the existence of the super-PACs that have run amok during this primary season.

But perhaps the best reason to choose one presidential candidate over another is based on which judges they would appoint, especially ones for the Supreme Court.  Now no matter what any candidate says about not having a litmus test, a Democrat is going to appoint liberal judges while a Republican will appoint conservative ones.  Nothing wrong with that.  But the problem with Santorum is his extreme conservatism on social issues, in many cases attacking what are generally agreed to interpretations of the separation of church and state.  For as strongly as he believes in his hard-right social positions, it would be hard to believe he wouldn’t select judges who are just as extreme.

This more than anything else is what scares me about a Rick Santorum presidency!. 

Is Mitt Romney a Vulture Capitalist?

Mitt Romney as a result of yesterday’s convincing defeat of Newt Gingrich has again established himself as the odds-on favorite to win the Republican nomination for president.  But even so, Gingrich has vowed to stay in the race until the convention.

One of the issues raised by Gingrich is about Mitt Romney’s former position at Bain Capital.  Romney has cited his business background as making him uniquely qualified to create jobs.  Gingrich’s response was to ask how Romney can create jobs when at Bain Capital, he made a career out of destroying them.

If you haven’t already, I invite you to check out the 28 minute video When Mitt Romney Came to Town.  It is compelling watching but in fairness, it was produced by Newt Gingrich’s super PAC so it may well be tainted with bias.

But what is the truth behind what Romney’s detractors call Vulture Capitalism?  Because these transactions are so complicated, it’s hard to say for sure.  Romney says that he created 100,000 jobs.  But he hasn’t presented any supporting evidence.

A Wall Street Journal article Romney at Bain: Big Gains Some Busts tries to come up with some answers.

Amid anecdotal evidence on both sides, the full record has largely escaped a close look, because so many transactions are involved. The Wall Street Journal, aiming for a comprehensive assessment, examined 77 businesses Bain invested in while Mr. Romney led the firm from its 1984 start until early 1999, to see how they fared during Bain's involvement and shortly afterward.

Among the findings: 22% either filed for bankruptcy reorganization or closed their doors by the end of the eighth year after Bain first invested, sometimes with substantial job losses. An additional 8% ran into so much trouble that all of the money Bain invested was lost.

Of the 10 businesses on which Bain investors scored their biggest gains, four later landed in bankruptcy court.

What is perhaps the most controversial is Bain’s use of the Leveraged Buyout which is defined and explained in this Investopedia article.

Definition of 'Leveraged Buyout - LBO'  

The acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. Often, the assets of the company being acquired are used as collateral for the loans in addition to the assets of the acquiring company. The purpose of leveraged buyouts is to allow companies to make large acquisitions without having to commit a lot of capital.  

Investopedia explains 'Leveraged Buyout - LBO' 

In an LBO, there is usually a ratio of 90% debt to 10% equity. Because of this high debt/equity ratio, the bonds usually are not investment grade and are referred to as junk bonds. Leveraged buyouts have had a notorious history, especially in the 1980s when several prominent buyouts led to the eventual bankruptcy of the acquired companies. This was mainly due to the fact that the leverage ratio was nearly 100% and the interest payments were so large that the company's operating cash flows were unable to meet the obligation.  

One of the largest LBOs on record was the acquisition of HCA Inc. in 2006 by Kohlberg Kravis Roberts & Co. (KKR), Bain & Co., and Merrill Lynch. The three companies paid around $33 billion for the acquisition. 

It can be considered ironic that a company's success (in the form of assets on the balance sheet) can be used against it as collateral by a hostile company that acquires it. For this reason, some regard LBOs as an especially ruthless, predatory tactic.

There seems to be a pattern that the companies that failed did so because of overwhelming debt imposed on them by the acquiring company.  In addition, companies with these large amounts of debt have far more difficulties dealing with down markets.

But what was the idea of Bain taking over these companies?  Unless one is incredibly naïve, it was first and foremost with the idea of making money (preferably big money).  If workers lost their jobs and perhaps their pensions from their companies going bankrupt, that’s just a part of capitalism where according to Romney, there have to be winners and losers.  But all too often Bain made a handsome return from management fees whether the company did well or not.

While there is no accusation of Romney and Bain doing anything illegal, there is a question of conscience and empathy.  If I were to cause the loss of hundreds or even thousands of jobs to make a nice payday, I would feel terrible about it.  But then I’m just a bleeding-heart liberal.  Mitt Romney doesn’t seem to even give it a second thought.

So what this is ultimately about is whether Mitt Romney has compassion for those of us who are not wealthy like him.  Today, he make a curious remark saying that he is not concerned about the poor since they already have a safety net while at the same time supporting the Ryan Budget Plan which would not only make cuts in that same safety net, but also lower taxes on capital gains to zero.  So for those who are outraged at Romney paying only 14% on his submitted income tax return, his taxation rate under the Ryan Plan that he favors would be close to zero on all of the millions that he earns mostly from capital gains.

Assuming he gets the Republican nomination, voters this fall will have to decide if Mitt Romney is looking out for the interests of the 99% or the 1% he is a part of.  I think I know!