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CICEROSC

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  1. Nicky, I "liked" your comment because IMHO that's an excellent question. I suspect that a large part of the answer -- in those cases where it happens -- is that fraud in general and in financial cases in particular is very difficult to prove in court. An example is the mortgage crisis, where most of the people involved could honestly claim that they thought "passing the trash" was perfectly acceptable -- because of course everyone knows that "real estate always goes up." Your observation that "starting businesses to load them up with debt would be all everyone did" is excellent. But of course starting from scratch is not so simple, and it is much easier to detect bad faith if the new business does not (and never had) a truly economic model. That's what attracts the PE crowd to their targets -- the targets are existing businesses which do (or did) have an economic model and were (or are) at least close to profitable and therefore had a reputation for honest dealing. That means there was (or is) a reasonable argument that a "turnaround" might work, and that asking others to lending money to them seems reasonable. In those situations, the PE operators can go to lenders and participants all along the chain, point to the company's past track record, and say that they have a reasonable hope that things will turn out all right. And there are lots of people, institutions, and government who will grant concessions and make loans to "help the local people keep their jobs." This is a topic closely related to the topic of "crony capitalism," and poses the same challenge - separating out the minority of cases that are illegitimate from the majority that are legitimate. Due to the complexity of the financial transactions involved it can take considerable study and command of the facts to be able to tell one from the other. Lots of conservative politicians jump on the Solyndra situation, and rightly condemn it, but similar "economic development" arrangements are put forth all the time by Republican legislators all across the country. Probably that's why Rick Perry was so quick to come up with and apply the "Vulture Capitalist" name to PE firms during the primary campaign. As I understand it, his Texas administration has been right in the middle of many such "economic development deals," so Rick Perry was in the position of those who say "it takes one to know one."
  2. I would have to go back and reread to go into detail, but I think I can summarize. One of the main issues is a PE tactic of loading up a target company with debt that cannot and knowingly will not be repaid, and then using the proceeds of that debt issue to pay big "management fees" to the Private Equity company. This results in a payoff to the PE owner in excess of the amount "invested." Such a pattern appears fairly commonly, and the point to look for is that these equity extractions are not being made in order to fund new capital, new equipment, new strategies, etc -- the extractions are taken out and paid to the PE as profit with no pretense of "re-investing" them in the operation of the target company. This is the problem with the common conception that all PE's are acting as "turnaround specialists" by investing money and knowhow into a failing company with the goal of turning it around and getting it to operate profitably and successfully in the future. Sometimes that is in fact the case. On the other hand, sometimes, as detailed in the Kosman book, the facts are such that no objective observer would conclude that the PE entered the business in order to turn it around. Instead, the financial transactions, to the extent they are public knowledge, evidence the conclusion that the goal from the beginning was to pull out all avalable cash (and even new cash through debt and otherwise) and then send the company into bankrupty. The details are all very fact-specific to individual deals. There are indeed many "turnaround" deals that are legitmate in any fair-minded person's book, and those are the ones where the "win some / lose some" argument applies. On the other hand, if you do the research you will see that there are deals where the overwhelming circumstances do not point to a good faith effort to turn around a company. Now in those cases one can argue (correctly) that the activities of a vulture in scavenging what's left of a dead body serve a legitimate purpose. The real issue becomes when a PE firm goes in with the representation to all concerned that it is acting to achieve a turnaround, when it's real purpose is to extract all available equity, obtain new debt under "false pretenses", and then bankrupt a company that would otherwise have continued to survive at least for some period of time. Many types of ethical issues are raised in this fact pattern in addition to the deception that is involved. I do not think that it violates objectivist principles to be concerned about the effect on long-term employees of such a company who have themselves operated under the representation that the owners intended that it remain a going concern. I would think that Nat Taggart inspired his workers to their own best efforts by his clear determination to build the best railroad he possibly could, and that his employees made decisions in their personal lives based on those representations. Again, I do not want to be perceived as bashing the main article. The point it makes applies to many cases and maybe even a majority. But I do want to make a point to those who might find themselves debating this issue, perhaps even live in a political or other debate, that there are intricacies to certain deals which can be difficult to defend.
  3. From the article: "Private equity firms typically invest in relatively mature companies...." "It's a serious injustice to malign private equity firms as their critics do today. We should recognize that they're reorganization experts who aim to improve undervalued or underperforming businesses. Their profits should be admired." This argument is painting with a very broad brush. The argument certainly applies to some cases, but it is a very different matter to assert that it applies to every case. For the other side of the story I recommend The Buyout of America which I read in full during the height of the Newt Gingrich / Bain Capital discussion. I found it well researched, even though clearly written from a more liberal perspective than my own (Austrian) view. Anyone choosing to debate the issue would be well advised to educate themselves about a number of private equity tactics that are frequently used and yet quite inconsistent with what is implied when one thinks of "reorganization" with the intent to "improve." I am not posting this as an attack on the Altner article. I simply want to note that the "devil is in the details." Blanket praise for "private equity" in every situation can be just as inaccurate as blanket denunciation of it.
  4. I think this is an important topic, and it will become more important every day as we see the rise of a group of people among us who think that routine animal sacrifice is a wonderful idea. I scanned that other thread and found little that was clear and helpful other than just personal opinion. I see this page by Alex Epstein "Animal Rights' Movement Cruelty To Humans" which says "No sane person seeks to inflict needless pain on animals. Such practices, where they exist, should be condemned" and "The "animal rights" movement's emphasis on the senseless torture of animals--in the rare cases where it actually exists--is a red herring." While Epstein acknowledges the proper position, I really have a problem with that second sentence -- concern over animal cruelty is not a "red herring." I see this article at the atlassociety page which takes the position that "[T]he issues of gratuitous cruelty to animals and of vegetarianism are not fundamental philosophical issues." Seems that's the main comment I've seen before when this is discussed. Maybe it's not a "fundamental philosophical issue," but a philosophy which has no guidance on an abomination like animal cruelty is a pretty weak thing. I suspect the true answer is that the ideas of Ayn Rand do lead to the proper condemnation of animal cruelty, but the definitive formulation of the argument has yet to be made.
  5. This movie looks like it deserves a word of mouth campaign. Check out THIS poster.
  6. Link for stills from the movie: http://www.ropeofsilicon.com/movie/agora/stills/ And a good summary of the status: http://www.ropeofsilicon.com/article/agora...annes-reactions This really looks interesting.
  7. I gather it's not out in the US yet but is on the way. More links: http://armariummagnus.blogspot.com/2009/05...od-strikes.html http://www.variety.com/index.asp?layout=fe...940282&cs=1 THIS one is interesting about why it hasn't been released yet: http://riskybusiness.blogs.thr.com/2009/10...z-amenabar.html
  8. I searched for other mentions of this movie on the forum but did not find any, so this is just to note that this appears to be worth watching: http://www.agoralapelicula.com/ Be sure to select the English menu at the bottom, and watch the trailer under the multimedia section. Here is more info: Of the little that is known about Hypatia, the following account by Socrates Scholasticus, which was written about AD 450, is the best and most substantial. "There was a woman at Alexandria named Hypatia, daughter of the philosopher Theon, who made such attainments in literature and science, as to far surpass all the philosophers of her own time. Having succeeded to the school of Plato and Plotinus, she explained the principles of philosophy to her auditors, many of whom came from a distance to receive her instructions. On account of the self-possession and ease of manner, which she had acquired in consequence of the cultivation of her mind, she not infrequently appeared in public in presence of the magistrates. Neither did she feel abashed in coming to an assembly of men. For all men on account of her extraordinary dignity and virtue admired her the more. Yet even she fell a victim to the political jealousy which at that time prevailed. For as she had frequent interviews with Orestes, it was calumniously reported among the Christian populace, that it was she who prevented Orestes from being reconciled to the bishop. Some of them therefore, hurried away by a fierce and bigoted zeal, whose ringleader was a reader named Peter, waylaid her returning home, and dragging her from her carriage, they took her to the church called Caesareum, where they completely stripped her, and then murdered her with tiles [oyster shells]. After tearing her body in pieces, they took her mangled limbs to a place called Cinaron, and there burnt them. This affair brought not the least opprobrium, not only upon Cyril, but also upon the whole Alexandrian church. And surely nothing can be farther from the spirit of Christianity than the allowance of massacres, fights, and transactions of that sort. This happened in the month of March during Lent, in the fourth year of Cyril's episcopate, under the tenth consulate of Honorius, and the sixth of Theodosius [AD 415]." Ecclesiastical History (VII.15)
  9. I completely agree and said so here: http://forums.4aynrandfans.com/index.php?s...ic=9377&hl= I hope you get better responses than I did! This really needs to happen and the sooner the better.
  10. Ed: I recently came across Jefferson's aversion to Plato when I was researching his fondness for Epicurus, which I posted about here in relation to Lucretius' poem "De Rerum Natura." My post was mainly an inquiry about an old paper written over twenty years ago in "Objectivity" comparing the views of Ayn Rand to those of Epicurus. The quote most relevant to the current conversation is this one from Jefferson's letter to William Short in 1820: “I too am an Epicurian. I consider the genuine (not the imputed) doctrines of Epicurus as containing everything rational in moral philosophy which Greece and Rome have left us.” From my reading so far it seems to me that Jefferson's esteem was correct. Unfortunately, other than the "Objectivity" article cited above it seems that many fans of Ayn Rand have the same incorrect view to which Jefferson objected -- the misrepresentation pushed by the Platonists and then Christians that Epicurus was a hedonist. The truth appears to be that Epicurus was in fact the most influential philosopher of the pre-Christian period, more so even than Aristotle, to stand for a complete break with Platonism, irrationalism and religion. It also appears that the Church found Epicurus to be a greater enemy than Aristiotle, and made sure that most of Epicurus' own work was destroyed, as it was preserved only through the work of Lucretius and Diogenes Laertius. Also of interest is that there apparently was another now mostly-forgotten writer (Pierre Gassendi) who popularized Epicurus and Lucretius during the Renaissance, and who served the same purpose to pass on Epicurus' emphasis on reason and reality for which we often praise Thomas Aquinas in relation to Aristotle. I would be extremely interested in your views on Epicurus.
  11. In my view the two lectures were a great success. At Furman, AB spoke to over a hundred students on Global Capitalism. After the lecture, the local leftists came out in force with a series of Questions in the QA session. One (by a Furman philosophy professor) was to the effect of: "How can you defend capitalism when the capital on which it is based is accumulated through oppression, racism, genocide, and slavery?" AB handled it deftly and pointed out that if oppression, racism, genocide, and slavery were the requirements for successful economies then it would have been such societies as the Soviet Union (and much of the rest of human history) that would have succeeded and not the US and Britain after the Enlightenment. At Coffee Underground, AB spoke to about 40 people on the Literary Revolution of Atlas Shrugged. This was also well received, and included in attendance was not just those of us familiar with AR's work but also a high school English teacher who brought eight of her Advanced Placement students. Here's a photo from Coffee Underground of the crowd gathering before the lecture (attached).
  12. Philosopher and Author Andrew Bernstein will be appearing twice in Greenville, South Carolina during the first week of November, 2007. On Thursday, November 8th, at 7:00 PM, Dr. Bernstein will lecture at Furman University on the topic: "Global Capitalism - The Solution to World Poverty and Oppression." More details can be found here. On Saturday, November 10th, at 3:00 PM, Dr. Bernstein will address a meeting of the New South Objectivists at the theatre at Coffee Underground, located in downtown Greenville at the intersection of Main and Coffee Streets. His topic will be: "The Literary Revolution of Atlas Shrugged." More details can be found here. Seating is limited at both events, so plan to arrive early. If possible RSVP here, but reservations are NOT required!
  13. More discussion on this question is now going on over at Mises.org: Ayn Rand and Garet Garrett This article appears fairly unbiased and evenhanded, but the comments show typical libertarian hostility toward Ms. Rand. With the publication of Garet Garrett's works over at Mises, I suspect we're going to see more of this argument. Regardless of that, and where the argument goes, Garet Garrett does seem to be a meritorious writer. Certainly there must have been Americans during the 20's and 30's who wrote articulately in opposition to the New Deal. From my reading of The Driver (and I'm just starting "The People's Pottage") it looks to me like the name Garet Garrett deserves a place in the pre-Randian honor role of worthwhile writers who made an effort to stem the leftist tide. PS -- Tangential comment: I think it would profit someone at ARI to take a look at mises.org and get some inspiration on improving aynrand.org.
  14. I've now had some more time to think about THE DRIVER after reading it. I yield to no one in my admiration of Ayn Rand, and in fact it's because of that, not in spite of it, that I'd like to know more about Ayn Rand's contact with this book and writer. As I've thought more, a couple of other connections are of note, particularly involving Vera, the beautiful older daughter of Henry Galt. Not only does the description of her icy personality recall a lot of the description of the early Dominique, but it's pretty striking that one of the scenes in THE DRIVER involves Vera intentionally dropping and destroying a piece of sculpture as did Dominique. The meaning of the scene is of course quite different, but it might be a point that use of a "drop the statue" scenario for dramatic impact is pretty unusual. In fact, one might almost argue that aspects of the Fountainhead relate to THE DRIVER as much or more than Atlas Shrugged does. That causes me to wonder if Garet Garrett didn't have some significant influence on Ayn Rand in other ways, and purely for historical reasons I'd be interested to know more. Apparently he lived til 1954, so it would have been possible for them to have significant personal contact. REPEAT: Any parallels that do exist, intentionally or accidently, take nothing away from the brilliance of Atlas Shrugged. Nevertheless, this is one of those points that opponents of Rand will use to dig at her for years (centuries) to come, and it would be helpful if those who knew her well could clarify what they know about this while they are still around.
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