Archive for the ‘Business’ Category

Poll Position: Who’s right about Romney’s time at Bain?

(Note: Apologies for the late Poll Position today, but I wanted the ethics reform post to be online all day.)

This week has seen one of the more amazing attack lines in any GOP presidential primary. It seems some Republican candidates think Mitt Romney was too much of a capitalist.

Well, that’s not exactly how they’d put it. Texas Gov. Rick Perry (yes, he’s still running, despite barely beating the combination of Buddy Roemer and “total write-ins” in New Hampshire) refers to Romney’s career at Bain Capital as “vulture capitalism,” not venture capitalism. A so-called Super PAC supporting Newt Gingrich produced a 28-minute video titled “When Mitt Romney Came to Town” about a company in South Carolina — the site of the next primary — bought by Bain.

Who’s right about Romney’s time at Bain Capital?

  • Gingrich and Perry (178 Votes)
  • Romney and his defenders (95 Votes)
  • Who knows? (38 Votes)

Total Voters: 311

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Their attacks have been lauded by some on the right, …

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When tycoons and politicians do business, taxpayers lose

If your blood hasn’t boiled in awhile, you must have missed the AJC story earlier this week about Range Fuels — a multimillion-dollar lesson in why taxpayers usually lose when billionaires with hare-brained schemes sidle up to politicians.

It’s been about a year since Range Fuels shut down its facility in Soperton, the South Georgia town where it had promised to turn our state into a world leader in turning wood into ethanol. There was just one problem: Range didn’t actually know how to turn wood into ethanol. The resulting failure cost taxpayers $64 million in federal loan guarantees and another $6 million in state funds.

This past week, the AJC’s Dan Chapman reported the sale of Range for a mere $5.1 million. The lucky bargain shopper? A New Zealand firm bankrolled by Vinod Khosla — the former tech executive who just happens to have been one of the main backers of Range.

Too bad Georgia didn’t invest in one of Khosla’s other ethanol endeavors: In its 2011 ranking …

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An anti-Wall Street idea that I like

As someone who believes in competition and challenges to the entrenched ways of doing things, I think this is a great idea (from the Wall Street Journal):

By virtue of its size, business model and popularity, Facebook is the rare company that doesn’t need Wall Street to go public. It should press home the advantage and blaze a trail for others to follow.

Mr. Zuckerberg’s has two options: a traditional [initial public offering], in which banks distribute shares to investors in exchange for a percentage of total proceeds; and the little-used “Dutch auction” that cuts out the Wall Street middlemen by making the allocation of shares dependent on prices bid by each investor.

The biggest difference between the two systems, apart from the lower fees paid by companies in auctions, is that when IPOs go Dutch, banks don’t choose who gets shares, giving all investors a fair shake and avoiding potential conflicts of interests.

This is particularly important for “hot” IPOs, like Facebook. …

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