Why You’re a Communist Stooge

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If you think that Mitt Romney’s work in dismantling failing companies is something bad, then you’re a communist stooge. You really don’t belong in America.

Let me help you understand.

A corporation is a legal entity where many stockholders own the company and have a claim to its profits. They elect a board of directors, who appoint officers to actually run the company.

When a company is mismanaged, the officers and board are cheating the stockholders out of their money. It’s no different than a plumber who shows up, ruins your plumbing system, then demands to be paid.

You may not like stockholders because they are rich. That’s a communist knee-jerk reaction that has nothing to do with reality. Even if you own 0 shares of any corporation, your life is dependent on people making money for their stockholders.

If you have some money in the bank, if you buy a CD or buy insurance, if you interact with money in a financial institution in any way, then you are affected by how boards and officers are held accountable to their stockholders. Heck, the company that pays you likely pays you with money that comes directly from the sale of stock. Or were you naive enough to think that your company put its payroll cash in a warehouse?

When a company goes bad, when it no longer delivers as much profit as it could, something needs to change. Either the officers and board need to develop a new plan and implement it successfully, or the stockholders need to change the board. When things go really bad, such a change isn’t possible, likely because the stockholders are too naive or too powerless to do anything.

In comes companies like Bain Capital. They raise money to buy the stock of a failing company. Then they go in and hopefully fix things up so it becomes a successful company. If it can’t be made successful, then they salvage the company and sell it off, just like you’d sell your car to a junkyard which would take the car apart and try to make as much money as possible from the parts.

In the first place, additional money flows into the pockets of the shareholders who leave the company. Bain must pay more than the company is worth to buy enough shares to take it over. That is a net benefit to you, because your company or insurance or bank may own quite a few shares of the failing company. Cha-ching!

In the second place, Bain may restore the company to profitability. If your bank or insurance company or payroll company held shares in the company, then Cha-ching!

Or maybe the company is sold for parts. In this case, the stockholders actually make a positive return, because the company is paid more than it’s worth. Cha-ching!

Let’s suppose you had no connection whatsoever with the company. That doesn’t matter. The additional wealth made from the takeover ends up funding companies you are invested in.

It’s impossible to track every economic transaction made every day. What can be said is that as long as the transactions are made with good knowledge and freely, every transaction creates wealth, both for the seller and the buyer. Bain Capital simply looks for particular kinds of transactions that would be profitable both for them and their takeover targets, and executes on them. The fact that they are done with knowledge and out of free will means that wealth is created, despite the fact that it isn’t much better than a junkyard buying a car that can no longer be driven.

If you don’t get this, you’re a communist stooge. A stooge, I say, because you are not intelligent enough to realize how the communist movement and ideology is using you. If you’re reaction is to deny the label communist and apply “liberal” or “socialist” or whatever else, then you’re still a communist stooge, so stupid to be incapable of realizing that you are a stooge. That’s a classic stooge.

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2 Responses to “Why You’re a Communist Stooge”

  1. Abby Hollyfield Says:

    Resorting to ad hominem attacks and using straw men to argue your points is the sign of a weak mind. How’s that. I think your definition of “communist stooge” includes everybody who is intelligent enough to think for themselves and who dare disagree with your Disneyland views of reality.

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