Saturday, April 14, 2012

The private equity scam

Robert Reich does it again with this article and video, exposing the scam that calls itself private equity investment. First off, it's public money that is invested, typically from pension and 401k funds, i.e, our money. And if the investments go bad there is no personal accountability for the investment managers, since they don't lose a dime; again, it's we that lose our investment. This is partly due to bogus investment laws that do not require these brokers to do due diligence. Hence there is absolutely no motivation to protect the public and every motivation to recklessly play with our money, since they skim their profit from the top and to hell with what happens after that. That used to be called conflict of interest when laws were more responsible and responsive to the public good, but we can't have any of that now, can we?

Reich as usual doesn't just complain but offers some practical solutions, solutions we're not likely to see as long as the corporate lackeys are controlling Congress. (Hint: vote and replace the scoundrels in 2012.) For example: tax capital gains like ordinary income; hold money managers accountable to due diligence and punish them financially for bad investments; resurrect Glass-Steagall. And another he doesn't mention this time, break up the big investment banks and end too big to fail. This is all assuming you want a government for and by the people instead of a corporate fascist State for and by the 1%. You decide and vote this year.

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