General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhat the word "business" really means today
"For almost the entire history of America, the route to riches was to build a business that sold real products or services to real customers. Depending on the era, it might have been a railroad, steel, retail, energy, real estate or technology empire. By the end of the 20th century, technology, media and real estate were the best ways to get rich. . . As the 21st century dawned, a new actor had snuck onto the stage.
leveraged-buyout (LBO) and hedge-fund managers who charged their capital providers 2 percent of the assets they managed plus 20 percent of the profits made. Call it the 2&20 formula. This formula became one of the greatest generators of new wealth in America. And it was the source of Romneys fortune, estimated at about $250 million.
How do they do it? How do the 2&20 titans get to the top of the list in greater numbers than anybody else? By treating labor and capital as adversaries. For hedge funds in particular, the question is not: How can I serve capital best? It is: How much of the investment returns can I extract for myself before the investor earns his returns?
How do they do it? How do the 2&20 titans get to the top of the list in greater numbers than anybody else? By treating labor and capital as adversaries. For hedge funds in particular, the question is not: How can I serve capital best? It is: How much of the investment returns can I extract for myself before the investor earns his returns?"
http://www.washingtonpost.com/opinions/mitt-romney-a-symbol-of-the-talent-economy/2012/10/19/09df8966-17ae-11e2-9855-71f2b202721b_story_1.html
JustAnotherGen
(31,780 posts)And thanks to 1stringblackman for directing me to this. My husband owns a small HVAC company - but his lifeblood and passion is his Iron/Metal works/Restoration business. His chief capital in both? His workers. Especially his metal shop. Without skilled artisans and welders - he's got nothing. And they don't move numbers around a spreadsheet all day . . .
Skidmore
(37,364 posts)for your workforce or the environment.
meow2u3
(24,759 posts)What Rmoney did was not so much a bustout, but rather a bleedout, which is harder to prove than a mob bustout.