Legalizing Theft - The New Capitalism II

A confluence of events may have just occurred. Recently, by accident, I saw Michael Moore being interviewed by CNBC on his new movie "Capitalism: A Love Story". In that interview Michael noted that we have lost our moral compass when it comes to making money. Today, I ran across a New York Times article and video: "Profits for Buyout Firms as Company Debt Soared". This article concerns the buying and selling of the Simmons Bedding Company. With each buying and selling action, the private venture firms would increase the debt of Simmons and pay themselves. In that article, the Times is reporting that Simmons will be soon filing for bankruptcy protection. The Times notes that the employees and bondholders will lose but the private venture firm will be making a profit when this is all over.

What the Times is reporting is unfortunately not new, private equity firms have been buying companies and stripping them of there assets for many years. What is telling in this situation is that this article appeared just after the release of "Caplitalism: A Love Story". Now I don't know if the congruence of these two events is a coincidence or not, but they both further highlight that we have a corrupt form of Capitalism. How corrupt Capitalism has become was illustrated just over a year ago with the housing bubble and the use of Collateralized Debt Obligations that proved virtually worthless. We need to restore a moral balance to Capitalism. Furthermore, our corporate and elected leaders need to make decisions with the public interest in mind.

In summary, Rick A. in the reader comments section of the Times article remarked that:

"So in their supposed mission of making companies more efficient, and supposedly, more profitable, PE has actually succeeded in making companies grossly inefficient, and has destroyed lives, families and communities in the process, all while profiting from their shell games and paper-pushing. Then they avoid paying their fair share of taxes using lawyers, accountants and more shell games. All while our country sinks like a rock.

This is capitalism at its worst, and plainly indicates that business needs more regulation to do what's morally right, since the PE people have proven themselves to be morally bankrupt while they bankrupt the rest of us.

Ain't that America?"