Four Little Letters

Four Little Letters

To start this posting, I would like to respond to Anonymous about my posting of last week.  The list of actions by some of the hierarchy over the past decades, up to the present, are horrific all the way down to the stupid decision to investigate the Girl Scouts.  Those actions could be for a future blog, but last week was just about what was in the ad, not what was left out.  Thank you much for commenting, and one of these days I’ll figure out how to respond to comments!

It is always amazing to me how such small things can have such a huge impact.  Take the four little letters “e,n,u,l”.  Why these four?  Well, for one thing they change the word “venture” into “vulture”.

In the current debate about Romney and his company, Bain Capital, Romney is either portrayed as a marvelous businessman who has used the capital in his company to increase revenues in a company, and thereby supposedly increasing job growth, or as a businessman who uses the capital in his company to gut businesses by stripping all of their assets and leaving them bankrupt, and destroying jobs in the process.

Like almost anything one can think of, how something is used can vary widely.  When I finish this blog, I intend to peel carrots for some lentil soup.  I can either use that carrot peeler for what it was intended, peeling carrots, or I can use it to dig small plants out of the ground, and then use it to dig a bigger hole to transplant the plants, thereby dulling the carrot peeler, and making it no longer useful for its intended use.  The choice is mine. 

Thus, if capital is used to fund a start-up company until it can sustain itself, pay back what it borrowed with interest, and create jobs, then that is one use of capital that has a positive result for both the venture capitalist, the new company and the community that now has jobs it didn’t have before.  If the capital is used to only create wealth for the owners of the company, and perhaps a few others, the result is positive for a select few, but definitely not positive for the workers, their families, and the community at large. The community has now lost the revenue that had accrued to the community in the form of taxes, such as sales taxes because now people cannot purchase items, or increased property taxes as people were able to purchase more expensive homes, and on and on.  The resultant decline in community services required by the people make the community less attractive for new residents.

Thus, one could say that by replacing the two little letters of “e,n” with “u,l”, we have turned venture capital into vulture capital.  A small word change with really dreadful results.  During this election season we really need to not be taken in by simplistic comments.  So someone says he is a businessman and therefore knows how to get the economy working again.  OK.  Taking into account Romney’s experience at Bain Capital, someone needs to ask him in public, “Get the economy working for whom? And be specific”.  We do not need an answer, “For the American people”.  That is a non-answer in that we are all the American people.  We need to know if Romney means for the owners or for the workers, or in the best of all possible worlds, for both.