Monthly Archives: February 2018

Taxpayer-financed business failure insurance

  

Two recent posts looked at private equity (PE) as an aberrant form of business model dependent first on very artificial tax preferences and second on the ability to empty the cash from “cash cow” businesses. In this final part of my critique of PE, I will look at the liberal use of bankruptcy protection as a “feature, not a bug”… Read more »

What makes the United States different on guns?

  

A February 26 interview by NPR’s Steve Inskeep with Kentucky Governor Matt Bevin on the curiously-ignored mass school shooting in his state in January was one of the most disturbing discussions with a politician I have heard recently. In short, Governor Bevin has no explanation for school shootings except “evil,” and thus no useful suggestions for countering this national tragedy. He… Read more »

The ever-changing river

  

The Greek philosopher Heraclitus of Ephesus was noted for saying that “No man ever steps in the same river twice.” He recognized that the fundamental nature of the universe is that it is ever-changing and ever-moving. You might think of him as the first to understand and articulate, long before the idea of “Poisson processes” as explained in an earlier… Read more »

Army suicides and gun policy

  

A very significant U. S. Army study on suicides in the ranks [1] came and went past most public notice in 2013. On some military bases, “successful” suicides are nearly zero. Suicides on U.S. bases in South Korea have been very rare. But the rates are disturbingly high at Fort Campbell, Kentucky, and Fort Hood, Texas, for example. The one… Read more »

How to milk a cash cow

  

An earlier post explored the “tax welfare” characteristics in much private equity (PE) investment in the U.S. This post explores the second key characteristic of PE, which is the preying on “cash cow” companies. One of the greater misstatements common in the business press is that private equity firms like Bain Capital target “troubled companies” for takeover and rescue. A… Read more »

The “mentally-ill shooter” fallacy

  

In my earlier post on “The gun violence lottery” I presented the math behind my contention that the rise of American gun violence is mostly correlated simply with the accelerating rise in the availability of guns in America. The short version of the proof is found in the “should be obvious” fact that other “first world” countries have all of… Read more »

Fingers, toes, and Bernie Madoff

  

The record-breaking Bernie Madoff Ponzi scheme, which collapsed in 2008, is in news again. The trustee trying to recover assets has clawed back $76.5 million from a Bermuda/Austrian investment fund that had profited from the scheme. [1] Most people don’t know that this fraud could have been taken down eight years earlier. An analyst named Harry Markopolos had tried to… Read more »

Private equity and tax welfare

  

With Mitt Romney back in politics, running for senator from Utah, as well as the recent death of his business mentor, Bill Bain, [1] I thought I should revisit the legacy of the “private equity” (PE) model of corporate governance. Romney’s Bain & Co. spin-off, Bain Capital, was one of the first, and has long been one of the most… Read more »

Will you choose the cake or the fruit?

  

Call it “choice” or call it “free will,” we struggle daily when trying to figure out why people do bad things. Most of us go through our day thinking we are in control of our own choices, and we assume that others are as well. We can’t even entertain the thought that perhaps some other force if affecting how we… Read more »

The gun violence lottery

  

A recent New York Times story reported the frustration in trying to determine a “cause” for Stephen Paddock’s October 2017 murder of 58 concertgoers in Las Vegas, and the wounding of hundreds more, all shot using a modified semi-automatic weapon, fired high up from an adjacent hotel. [1] No strong personal motives have emerged, at least significant enough to commit… Read more »