In 1990 I graduated from high school and a few months before graduation the Richard Gere/Julia Roberts flick Pretty Woman hit theaters. I have never found Julia Roberts to be all that pretty to be honest but anyway that was the name of the film. It was supposed to be a romantic comedy with a billionaire financier who falls in love with a hooker. Sure, that would happen. Gere’s character, Edward Lewis, buys companies, breaks them up and sells off the pieces. His hatchet man is Philip Stuckey, played by Jason Alexander (real name Jay Greenspan). Thanks to the wisdom he attains by banging a chick he pays to have sex with him, he decides to change his ways and instead of chopping up and selling off a ship building company run by James Morse, played by Ralph Bellamy in his last film before his death, he instead decides to rescue the company, save the jobs and make ships. By any reasonable measure it is a very silly movie.
Most people pay very little attention to the backstory of Edward Lewis, it is enough that he is a rich guy who only finds love from a whore making it a twist on the story of Cinderella if Cinderella had sold herself to men for money. The story is important though, as the film hit theaters in 1990 during the backlash against the excess of the 1980s where people became familiar with terms like insider trading, leveraged buyouts and corporate raiders. People like Ivan Boesky, Dennis Levine and Michael Milken became household names when they were busted for insider trading but others also grew incredibly wealthy with financial shenanigans, like Mitt Romney who headed up Bain Capital.
While it was very in-style to rail against the excesses of greed in the 1980s, in the real world not much has changed. Wall Street is still full of corporate raiders and hedge funds who use all manner of financial chicanery to make obscene profits while not actually doing anything.
I was reminded of this the other day. You probably didn’t notice but Joann’s fabric and craft stores are closing. My mom used to go there when I was a kid and would often drag me along but I usually got to hit a bookstore while she was shopping so it worked out.
No surprise that a company that was doing well gets bought out and then ends up going bankrupt after the “private venture” firm cashed out. The buyout was done by Leonard Green & Partners, founded by the late Leonard Green and you don’t even need to look at his early life to know. A leveraged buyout or LBO is: “buying existing companies with money mostly borrowed from banking institutions using the newly bought companies’ assets as collateral”. What often ends up happening is that the company bought out, now in debt from being bought out, comes apart but not until the LBO buyer cashes out and makes a profit.
Remember in Goodfellas where Sonny Bunz gets into business with Paulie and they end up buying a bunch of stuff using the restaurant’s credit, selling it on the side until the restaurant finally goes bankrupt and closes? It is kind of like that.
This nonsense has been going on for decades. The securities industry is barely regulated and lots of rules exist that only benefit hedge funds and corporate raiders. What they do doesn’t have any benefit to the general public, it just makes Wall Street types that are already wealthy a little wealthier. It isn’t like Congress is going to do anything, here is Chuck Schumer’s profile at OpenSecrets.org…..
Almost five million bucks from the securities and investment industry. They ain’t paying him for his burger grilling skillz, they pay him to make sure no one interferes with their money printing schemes. Many of the members of Congress in both chambers and from both parties have significant donations coming in from the securities industry and that is why people can buy companies using the company being bought as collateral, cash out and then walk away as the company folds and people lose their jobs.
I wrote about this a few years ago after Tucker Carlson did a piece on Cabela’s being bought by Bass Pro Shops because Paul Singer (yes, he is) was threatening to buy them out: This Is Why People Hate Libertarians.
Paul Singer spooked Cabela’s so they merged with Bass Pro Shops and their stock went up, Singer made a hundred million or something, and the town of Sidney, Nebraska was devastated. Then he moved on to do the same thing somewhere else.
What Singer did to Cabela’s, what Leonard Green & Partners did with Joann’s, what Mitt Romney was doing with Bain Capital isn’t illegal as such. It is deeply unethical but not illegal.
This is just a small part of what is deeply wrong with our economic system. This isn’t a “free market”, it is a system that is rigged for the donors to politicians who make sure that the very wealthiest keep getting wealthier and the impact on regular people isn’t even a consideration except when it comes to campaign slogans. I worked for decades in financial services and banking and very little of what goes on is beneficial to most people.
Maybe it is time to rethink the whole system?
Crony capitalism is like a bowling lane rigged with the bumpers in the gutters. The people that try to bowl rightly with good form and by the rules are penalized, whereas the people that learn how to “operate in the margins” and use the bumpers to their advantage end up benefiting even though their bowling technique and effort appears to be way off the marque. Ill gotten gains always mean someone is getting screwed. Someone getting screwed always means someone is making ill gotten gains. Make the unethical illegal, and then enforce the rules.
I am also very amused when reminded of the story line of “Pretty Woman” which helped magnify the lie that a woman can live her life with no care, maybe be egregiously promiscuous, maybe acquire insuperable debt, maybe harbor ideas and habits that are untenable, but even so “a real gentlemen” will come along and put her life in order. Real men should demand that the mother of their children will have managed their affairs much more scrupulously.
(((private equity))) ruins everything.
The list is endless (hooters, red lobster off the top of my head). And explains why everything is crappier and everything is so expensive. So many grifters at every level with their snout in the trough.
Time to decimate the whole financial system and start over. It’s a grift system tilted toward the powerfully connected and shysters (but I repeat myself).
(((Rich))) small hats in high places are monstrously corrupt and immoral, from the Rothschilds in Europe to their subsidiary in the U.S. (Goldman Sachs); there are no exceptions. They all suck beyond my powers of description.
Re: “Pretty Woman,” I recall Jay Leno quipping about the film during his monologue (not an exact quote):
“Oh yeah, “Pretty Woman.” Now ALL my rich friends are marrying prostitutes.” Basically, Leno gave it that much attention and no more.
Absolutely no fixing this; definitely need to start over. And not only can you not shame these people for their unethical behavior – after all, everyone they know (almost all fellow tribesmen) operates the same way. Besides, if you don’t operate that way and take advantage of every possible twist of the system, then you are a sucker and a loser, just asking to be taken advantage of. You’re goy cattle.
My husband and I saw Pretty Woman in 1990 in Belgrade (drove up there for a long weekend) – this was before AINO bombed the city to rubble.
Most actors/actresses play themselves. Not necessarily their IRL role, but they still fit the part they play as most can’t act.
Boesky, Levine, Milken, Green, Schumer , Singer. What a cohencidence.
We all know what the fix is. It would involve real numbers instead of imaginary numbers.
Typically they loot the assets and leave a husk. Which they liquidate.