Why aren’t the middle classes revolting?
[....]
I’m not financially sophisticated enough to understand the labyrinthine ins and outs of private equity deals. But I don’t think I need to be. Here, my relative ignorance is actually a plus. You took a viable company, ran up ridiculous levels of debt, paid yourselves millions and then walked away, leaving unemployment and unpaid tax bills in your wake. What’s to understand? We should be calling for your heads on a plate.
In America? Ho ho, you must be kidding.
More past the orange space-time vortex...
The Telegraph is a British newspaper on the conservative side, more respectable than the barking mad Daily Mail but solidly pro free markets and the Conservative Party, so it comes as a surprise to read one of their editorialists calling out a private equity firm for following the usual PE script: buying a company, strip-mining its assets, and walking away from the wreckage. In this case we're talking about Phones4U, who had a tidy business reselling mobiles on various plans before the debt incurred by BC Partners, their recent owner, scuppered negotiations with their cellular network providers:
It was the decision by EE and Vodafone decisions this month to cut ties with Phones 4U that triggered the administration process on Sunday night. They have said Phones 4U did not offer competitive commercial terms during months of negotiations. Management cited expensive interest payments on debt loaded onto it by its private equity owner, BC Partners, according to the mobile operators.
http://www.telegraph.co.uk/...
BC Partners says they're devastated, but they made out pretty well out of the deal: they spent 200 million pounds buying Phones4U, issued 205 million pounds of debt, then gave themselves a 233 million pound dividend. Meanwhile 5600 people are on the street, easy prey for Tory screw-the-poor-and-unemployed schemes.
Let's hear from Alex Proud again:
All these guys care about is money. They don’t care about society. They certainly don’t care about jobs and they don’t care about you.
OK, you might say, but this has always been going on. But it hasn’t. This sort of utterly amoral screw-everyone capitalism has become much more prevalent in the last 15 years. Our financial elite is now totally out of control. They learned nothing from the crisis, except that the rest of us were stupid enough to give them a second chance. And, now, having plucked all the “low hanging fruit,” they’re destroying the middle classes for profit.
Remember he is a
conservative columnist writing in a British
conservative paper. If they're willing to print this angry screed in the face of a looming general election, then banksters and various other greedheads may have cold days ahead of them in the UK. The whole column is worth a read for the sight of a Gladstone liberal, as he calls himself, having the scales drop from his eyes. Perhaps we might extend an invitation to the Great Orange Satan.
http://www.telegraph.co.uk/...
Meanwhile, in the USA do we have any coverage of Private Equity destroying jobs?
Crickets.
And I will be the first to laugh when Bain Capital sucks the last lifejuices from Clear Channel (pardon me, IHeartMedia) and tosses away the withered corpse.