Wednesday, May 23, 2012
David Brooks defends
Nor is it true that private equity firms generally pile up companies with debt, loot them and then send them to the graveyard. This does happen occasionally, but banks would not be lending money to private equity-owned companies if those companies weren't generally credit worthy.
Paul Krugman takes on Brooks today, without naming him, at his NYTimes Blog.
As I recall, during the GOP candidates debates where Romney's Bain success claims were challenged, Brooks pointed out that that was okay as Romney's success at Bain was a major basis of his candidacy. Of course, Brooks was not pushing Romney back then and in fact may have been favoring one of his competitors.
For a second lets pretend that these leveraged buy-out companies are not vampire capitalists. Lets assume that what Brooks describes as a "process of rigorous creative destruction" is a good thing. How exactly would this approach work in government? Who will be the innocent by-standers?