In “Bankruptcy for Billionaires,” Daniel Gross from Newsweek speaks out about a little-known fact.
Last year the Carlyle Group chose to fall behind on payments at one of their chains of hospitals, LifeCare Holdings. Instead of using its hoard of cash to pay obligations, Carlyle defaulted on a $5.5 million interest payment and wiped out $110 million in bankruptcy.
Carlyle’s top three executives were rewarded with $400 million in compensation.
There were 29 major debt defaults last year by U.S. companies, and 17 were private equity firms. This group includes Contec Holdings, owned by Bain Capital, which filed on Aug. 29 to wipe out $300 million in debt.
The problem with Bain Capital isn’t that presidential hopeful Mitt Romney earned a return for his shareholders. The problem is that private equity “reward” calculus avoids “moral hazard” by using attorneys and bankruptcy at the expense of vendors and landlords, service providers and bondholders.
This is not a small business owner staring at the moral hazard effects of life altering choices. This is corporate welfare.
The problem with Romney isn’t Bain Capital, but those private equity impulses that chose to exploit the system. The principle says you can make money destroying the wealth of others so long as it is legal.
The Judeo-Christian principles we live by as a nation and the path we choose this election have never stood in such stark contrast.
On the Trail
For three months I’ve been campaigning with my wife Jeske Noordergraaf, Senate candidate in District 32. As we went door to door, we met many thousands of voters in Chisago and Isanti Counties. I’d like you to know what we’ve experienced on the campaign trail.
As we knocked on doors, and perhaps contrary to my expectations regarding talking “politics,” we found residents were friendly and welcoming. Voters were sincerely interested to learn about Jeske (pronounced “Yes-ka”). They were looking for leadership in the Minnesota Senate that they can trust and count on, and that’s just what they’ll get with her.
Our counties’ residents will not find a smarter, harder-working and more caring candidate than Dr. Jeske Noordergraaf. She will be the senator who works for her district’s constituents and for the state. If you haven’t met us yet, you will – we look forward to meeting you and discussing new leadership for our district.
James P. McCarthy
Enough is Enough
Mayor, City Council:
After attending the past two budget workshops it has become apparent that the “robbing Peter to pay Paul” intergovernmental money transfers have come back to haunt you. This is evidenced by the $1.7 million Park Board loan payback dilemma, the lack of road maintenance funds due to the draining of MSA and TIF accounts on overspent projects and the increase in debt service by $241,000.
On Aug. 30, the Forest Lake Area Athletic Association came before you for additional requests. The following should be considered:
1. FLAAA is a private 501c3 entity.
2. FLAAA had revenues in excess of $1.9 million in 2009 and again in 2010.
3. As of 2010, FLAAA had a net fund balance of greater than $1 million.
4. FLAAA’s IRS 990 form indicates they lost $151,000 in 2009 and $96,000 in 2010.
5. FLAAA’s service area is the entire school district plus outside.
6. The taxpayers here have in excess of $1.7 million invested in this complex with no financial return.
7. All surrounding communities in the FLAAA service area need to participate in the program costs.
8. FLAAA membership should request an internal audit to determine the cause of their financial problems and the viability and future of the organization so as not to become another Vadnais Heights clone.
9. After all the taxpayers in Forest Lake have put in, in the form of land, contractual considerations and money, there is no justification for additional subsidies without a financial return on investment.
Time for a Change
It was extremely disappointing to see State Sen. Sean Nienow vote against the recent special session bill to provide critical repairs after the historic flooding this summer in Duluth and surrounding areas. Nienow was one of only seven senators who voted against the bipartisan bill. Even as a fiscal conservative, what could be more important than providing funding for our critical infrastructure?
It’s appalling that Nienow would take his full salary – along with $12,040 in extra expenses – but fail to find merit in assisting our northern neighbors. The selfishness and hypocrisy Nienow has exhibited, while businesses in storm-damaged areas are struggling to reopen, has become the stark reality of his tenure. If our community were to be unfortunate enough to experience a natural disaster, could we count on Nienow to support our recovery?
It’s clear there is a deficit of leadership from Sen. Nienow and that he is out of touch with practical, bipartisan, and necessary relief for Minnesota communities.
We need someone willing to work in a bipartisan manner to get things done. That someone is Jeske Noordergraaf. She has pledged to work with other legislators to take care of our state’s business. She has proven leadership skills as the first woman chair of the Sunrise Town Board, as a successful business owner, in her work with Relay for Life, and as a member of the Immanuel Lutheran Church Council.
I urge you to vote Nov. 6 for Jeske Noordergraaf for Senate District 32.
Just an Illusion
The Forest Lake council says the property tax levy for 2013 will not increase. This is very misleading. They’re using a sleight-of-hand trick.
The reality is that they will be adding a new and significant tax onto our gas and electric bills to provide money that would normally be part of the levy. This move is similar to the storm water tax added to the water and sewer bills to keep it below the radar.
The 2013 general fund budget is $7,164,000. In addition, the city will be collecting $768,500 from the new tax, bringing the total to $7,932,500. This is a 10.7 percent increase from 2012, not 0 percent.
Because total property values are expected to drop another 12 percent in 2013, the tax rate will increase from 37.7 percent of taxable value to 48.4 percent, including the new utility tax. So even if your property decreases some in value, your city tax will rise significantly.
This is where the city spending and taxes are headed and being directed by the majority of the current city council. It is time for the responsible leadership of Ben Winnick and Ed Eigner on the council and Bruce Anderson as mayor.
Better Than That
“I oppose this plan…No…Nay.” These are the words of Wyoming Council person Linda Nanko Yeager, who’s seeking reelection.
She vehemently opposed the bid to secure a future city hall at a astoundingly low price, as she did to the cost-sharing plan to fix our crumbling streets. Her colleagues, three other council members and Mayor Peterson, voted in the affirmative on those exact same issues.
Make no mistake, Yeager is especially intelligent and seemingly has genuine concern. Because of that perception I campaigned and voted for her in 2008. In January 2011, I wrote a public letter praising Yeager in that she promised progressive, forward thinking. Instead, she’s thrown those of us who live in the old city under the bus. In her view our streets can drop dead in favor of the flat levies that are important to her Tea Party supporters.
In fact she’s counting that the “live for today” rebellion she’s stirred up will come to fruition with Joe Zerwas and Eric Peterson thrown out of office. That’s been her strategy all along — dissension and false blame, pointing fingers at others, shifting responsibility. Are we really that gullible? Is this what we expect and deserve from our leaders? Isn’t Wyoming better than that?