Jan
19th
Thu
19th
Financial engineering is at the heart of what Wall Street now does, what it has become, and private equity firms of which Mr. Romney ran for quite awhile, are at the heart of that. They buy up companies - that’s the investment - they fiddle around with them, they borrow against them, they layoff workers quite often, they pull out money for their fees, and then they bring them back into the public market. And if everything goes well they make a fortune, and if everything doesn’t go well, the company goes bankrupt and they still make a fortune, because they’ve taken out all the fees. And, because the money they invested is investment capital, what they pay themselves, is a capital gain. And the capital gain is taxed at 15%, no matter how many millions it gets to.
— Joe Nocera of NYTimes on the Daily Show (via kateoplis)
