I’ll make it clearer then. Bain over-leveraged the firms because they knew they could walk away with the profits taken out of the borrowed money. That put those companies in a weaker position against their competitors and made it more likely for them to go bankrupt. It is the equivalent of what went on with the mortgage-backed securities, somebody using high finance techniques to trick someone out of their money by selling them something worthless. It’s not a question of legality, but of the kind of ethics and values we want in a president.
It also directly ties into Romney’s socialist schemes as governor. Just like John Corzine, often the type of person who likes playing these big money shell games also likes to collect a lot of tax revenue for the government and think he can work some accounting magic with those funds as well. This is not the profile of a small or limited government conservative.
If you own shares in a company and decide they’re overvalued, is it unethical to sell at the inflated market value? (Assuming you’re not illegally trading on inside info of course.). Are you morally obligated to wait for a lower price? If you see market values in your neighborhood starting to edge down, is it incumbent upon you to sell at a big discount based on how far prices might fall in the next five years?
The high yield bond and loan investors who lent the money to allow the dividends and share buybacks were ultimately responsible to make the determination that the terms and pricing of the additional debt were adequate compensation for the increased risk of default.
Debt investors consider the value of the assets in the event of bankruptcy, because if that occurs they’re the new owners. There is nothing unethical about the process.
Sorry it’s still not clear. Did they purchase the companies for market value? How did they receive the credit? Were the lenders forced to give them credit? Or, did the lender look at the proposal, do due diligence and make a business decision to extend credit based on the lender’s best interest? If the company was purchased for market value and extending credit was in the companies best interest (according to both the lender and debtor) then it was nothing more than a failed business plan. My guess is that attacking Bain as an inept company is not as easy as using the tools of the left and portaying them as evil capitalists.
By the way, I would not vote for Romney in any election but I will not attack capitalism to try and defeat him.