Venture v. Vulture Capitalism

Share

Once upon a time, a great man uttered the following words:

 “I want our campaign to stand for Main Street, not Wall Street. I want us to stand for the worker, the shopkeeper, the entrepreneur, and the small businessman.”

That man was Ronald Reagan.  Today, though, he would be viewed as a “marxist.

For those who don’t know the difference between Vulture Capitalism and Venture Capitalism, well there’s a difference – a huge difference.  A venture capitalist is someone who puts their life, tears, sweat, equity, and home on the line to open a business.  A vulture capitalist is just that – a vulture. For those who claim that an attack on vulture capitalism is an attack on baseball, hot dogs, and apple pie, well, they know they are lying through their gold filled teeth.

It is not so.

A vulture is a vulture.

In order for the argument that vulture capitalism is good for the country, and that any attack against it is an attack on free markets requires a suspension of logic, reason, and common sense.  There has been an entire set-up to this.  In order to defend Mitt Romney, we must now accept the balderdash that big business employs more people in this country than mom and pop small businesses.  I know in cities, there are super-strips with just one big corporation after another, but where I live we have Wallyworld, Walgreens, MacDonalds,  and…. well, that’s it.  The KFC, Sonic, and Taco Bell are all franchises, privately owned, as are the local motels.  The two largest businesses are the Inn of the Mountain Gods and their casino, which are owned by the Mescelaro Tribe.  The track near me is privately owned, as is the casino.  There are four banks in town.  Two are large franchises, two are small.  We’re not talking major chains here.

This is more a picture of small town America than Bain Capital is.   I know what small town America is.  I’ve lived in fly-over country most of my life.  I find it rather insulting when those who think they know everything, assume that those they think know nothing, more than they do.   This is one of those times when I suspect The Pink Flamingo may know more than the Knights of the Keyboard (an insult Ted Williams frequently used against the press).

Before I get started on my original rant and rave, I think I will commence with another one.  I am becoming sick and tired of the Romney apologists claiming that what Bain did was good for the country.  Attacking Bain is an attack on free enterprise.

Bunk.

“…“It’s puzzling to see Speaker Gingrich and his supporters continue their attacks on free enterprise,” the Romney campaign said of the Gingrich PAC’s new film. “This is the type of criticism we’ve come to expect from President Obama and his left-wing allies at Moveon.org. Unlike President Obama and Speaker Gingrich, Mitt Romney spent his career in business and knows what it will take to turn around our nation’s bad economy.”…”

This is bunk.

Anyone who knows anything about this nation knows we are a land of small businesses.

“...Meanwhile, over in the dark corners, new small businesses are starting up. These firms create the vast majority of net new jobs. Picture a highly unpredictable, boiling cauldron of winners and losers engaged in fierce competition. That’s the definition of a vibrant, job-producing economy. Some of these new firms produce society-transforming technologies. But most provide everyday services, sometimes with specialized niche products ignored by corporate America. Most of these highly risky startups fail, but others spring to life to take their place. The net result is an expansion of the job base.”…”

Venture capital is someone who risks it all in order to create a business.  They put up their life savings, their home, their future and often their children’s college fund – to build something.  Let me tell you about small business.  I had one.  My father had one.  My grandfather had one.  My sister is now owned by one.  To listen to people like Rush Limbaugh, etc. stating that those of us who disapprove of vultures like Mitt Romney are Marxist is insulting.  It shows how out of touch these people truly are.

Let me tell you about my small business.  The first two years were great.  It was incredible.  The gallery and gift shop my mother and I owned was growing like crazy.  Then things started to change.  The wonderful throw blankets that I was selling like crazy, and had put quite a bit of investment into, stopped selling.  I soon discovered the local Walmart was selling them, for half the price I was.

Oh, wait – that was good business.  If I couldn’t keep up, I could go under.

You are right.  If you think this is right then you are nothing but a heartless bastard who has never been in business in your life.  The local Walmart manager would shop in my store.  He located the small mill that was starting to go back into business. You see, the small company had been bought up by a vulture capitalist and the jobs shipped off to China.  The son of the late owner (who died of a heart attack over the deal) was left with an old building and older machines.  He used everything he had to start the mill up, again.  I was his first customer.  He and a few old employees would work after hours to manufacture some wonderful throw blankets.

The manager of the local Walmart was given permission to make the man an offer he couldn’t refuse.  They stepped in, started pushing him to reduce his prices.  He went bankrupt and lost everything.  I was stuck with dozens of blankets I was required to sell at a loss, in order to keep up with Walmart.

Now, you may say this did not happen, that’s fine.  It did.  Go ahead and call me a liar.  But, it was not the only time this happened to me.  My picture frame sales were destroyed the very same way.   But – that’s pure capitalism, right?

Now you know why I detest “business”.  I don’t have the stomach for battling the big guys who lie, cheat, and steal just to push me out of business.  After 5 years I was able to pay off my start-up loan and I quit.  I will never own another shop or another small business.  It isn’t worth it.  It’s not the small mom/pop down the road who destroy you, it’s the big guys who are so damn greedy they will do anything to get what they want.  Lives ruined mean nothing to them.

My father spent 40 years of his life as a small business owner with a Chapter S corporation.  Do you know what a Chapter S is?  Well, it is a bargain with the devil.  Everything you own is tied up in the corporation.  Like he said, he was lucky to be able to get minimum wage out of it on a weekly basis.  Forget about a pension.  He couldn’t afford it.  He could only afford the minimum of social security.  He couldn’t take cash out as profit, so he would buy land in the business name.  He’s now sitting on millions of dollars worth of land that can’t be sold because of the recession.  He paid millions of dollars in taxes.  Unlike the fat cat corporate vultures like Mitt Romney, when you have a little Chapter S, you are screwed from the beginning.  There are few deductions.  We’re still sitting on actual “property” in a business that closed 12 years ago – to the tune of about $700,000.  Only a small amount can be depreciated each year.  If we close out the corporation, the taxes, on what he’s already paid, will basically bankrupt my parents.

We were talking about the situation at lunch on Thursday.  My father may be in the early stages of Alzheimer’s but he is quit with it (thanks to B-12 shots).  “There were weeks when I could not even take minimum wage, let alone a pension.”  He is mad, furious.  “I hate to say it, but Newt Gingrich is right.  I shudder to think what will happen to our country when people like Mitt Romney have their way.”    He is livid because he  is now considered a Marxist because he opposes what Mitt Romney did at Bain Capital.  “It may be honest, but there is nothing moral or decent about it.”

Then there is my sister.  She is literally owned by a small business.  Everything she has, every cent, is tied up in the business loan.  She battles the IRS, employees, rules, regulations, and is fighting to build something.  Currently she has anywhere from 28-40 employees depending on the time of year.  You can’t even fire one without going to a hearing to explain that so and so was stealing from the credit card machine.

She has no money.  She’s always broke.  If she had not opened the business, she would have a tremendous amount of cash, but everything she has goes into that business.  She doesn’t get minimum wage – she gets NOTHING. She is putting bare minimum into social security.  She has no pension.  And yes, she has been approached by individuals who want to partner with her.

She refuses to do it.

Want to to know why?

Well, if someone gets outside money into her company, she can be pushed out into the cold, lose her home, and everything she has while the business is milked for every cent it is worth.  It is called capitalism, creative destruction.  I call it legalized theft.

Don’t insult my intelligence by saying I don’t know anything about business, but the likes of Rush Limbaugh, Ann Coulter, Michelle Malkin, Jennifer Rubin, Charles Krauthammer, etc. do.  That’s a big fat dirty lie. No, I don’t have a MBA, but I have a Ph.D. in hard knocks.  I know how things work.  I know how business is financed.  I know how the market works.

Please, don’t bother wasting my time pointing to this expert or that, or telling me that Newt Gingrich is now “Bad Newt” because he had the courage to point out (as have others before him, including Mike Huckabee, John McCain, Rudy Giuliani, etc) what a sleaze Mitt Romney is.  I am not that stupid.

Mega corporations and vulture capitalists are NOT the backbone of the American economy.  My friends who own a small business here in town are.  They have about 25 employees.  My friend likes to hire people who have a difficult time getting jobs.  I have another friend who works her fingers to the bone (almost literally) to keep her small business profitable.  I have another friend who schleps trunk shows all over Texas to support her business now that the economy has gone south.  I have friends who have bet it all on the creation of a small museum, which is now considered one of the best in this part of the country.  They go without in order to keep it open.

Come to think of it, I really don’t know anyone who does work for a huge corporation.  I’ve known bankers and brokers.  They did not lie, cheat, and destroy viable companies to milk the profits.  I’ve known people who use a business to bleed cash, but those are few and far between.

I hate to break it to you, but people like Mitt Romney and his slobbering apologists are NOT the backbone of America.  The backbone of this nation is every man and woman who has gone without in order to make their payroll.  They are people who have paid for employees babies, bailed their kids out of jail, and given a job to a bum who needs help.  Small business owners are people who take a chance hiring someone who has been convicted of robbery.  They’re the ones who give the second change.

Big corporations check your credit rating, and your degree.  If you don’t look right, they don’t want you.  There is no heart or soul.  There is no basic decency or compassion.  There is only the endless soul sucking corporation.

Save me from it. No, I’m not Marxist.  I’m like Ronald Reagan.  I know the real people in this country are the shopkeepers, small business people, the men and women who are struggling to keep their restaurant open and provide jobs for 25 people.  No, it’s not a heck of a lot, but when you start adding things up, here in Ruidoso  the local Wallyworld may employ 100 lost souls.  The community has a population of about 8,000 in the winter.  Someone is employing the other 5000 (who aren’t retired) and it sure as hell isn’t a big corporation, but the little mom and pop.

That is what American Capitalism is. The kind of business Mitt Romney and others like him run, may generate millions for a few lucky investors who have millions to invest, but it is a perversion.

Those who keep damning us as Marxist are soon going to discover that the 75% of Republicans who think Mitt Romney is unelectable are going to stop listening to your radio shows.  We are going to stop buying your books, and stop watching you on FOX. 

It’s called C – A – P – I – T – A – L – I – S – M.

Deal with hit.

You want to know something, I’m mad now.

Don’t try bullying me.

 

 

Share

4 thoughts on “Venture v. Vulture Capitalism

  1. Wow Pinky, you just might be a Catholic Radical. Read the story of Dorothy Day — I’m sure you’ll like it. The Zwick’s book on the intellectual foundations of the Catholic Worker Movement is especially good. Here, patronize a small used book store: http://bit.ly/ySyrRn

    I’m working on a definition of Capitalism, but it has to be succinct. The biggest single failing of Capitalism is that it treats human labor as a commodity. Human labor is inseparable from human persons, and the human person is the whole reason for an economy in the first place. Treating his labor and (by extension) him as a mere input or cost to a business gets this relationship wrong. It also exaggerates property rights but I have to think more about this.

    What you’re calling a “true” Venture Capitalist is what most people call an entrepreneur, and specifically an entrepreneur who hasn’t got a big-enough idea to attract outside investors (i.e. Venture Capitalists). There is a place for venture capital and there is a place for private equity firms. What there is no place for is emphasizing “stuff” over people. But Capitalism is exactly that. You’re complaining about the confusion of Finance with Business, and what a Vulture Capitalist does is abuse the tools of Finance to enrich himself too often at the expense of families. I don’t mind so much his enriching himself at the expense of all-too-passive owners (i.e. stockholders).

  2. I’m just a heathen Episcopalian. Then again, the Sermon on the Mount is quite radical, but no one pays attention to it. It may be one of the most radical and revolutionary moments in the history of humanity.

    SJR

  3. Oh, yes, certainly. Considered strictly as a philosophy the ethic proposed by Jesus of Nazareth based on love is entirely unique in human history — it was adopted by all Europe (at least in theory). Maybe the biggest single failing of Capitalism is that it does not share this ethic.

    Another of my Facebook Statuses:

    “In its positive form the personalist norm says that the person is a good toward which the only proper and adequate attitude is love.” – Karol Wojtyla, Love and Responsibility

    BTW, your former Bishop got a promotion:
    http://www.ncregister.com/site/article/preserving-anglican-patrimony/

    He’s a real curiosity in my circles: A married priest with a miter ;-)

Comments are closed.