“2012 GOP presidential frontrunner Mitt Romney, who has a large lead in the polls heading into the New Hampshire primary tomorrow, has been taking heat from both Democrats and his Republican challengers for his time at Bain Capital, the private equity firm that he headed. Bain’s modus operandi was to invest in companies, leverage them up with debt, and then sell them off for scrap, allowing Bain’s investors to walk away with huge profits while the companies in which Bain invested wound up in bankruptcy, laying off workers and reneging on benefits.
Last week, Reuters profiled one company, Worldwide Grinding Systems, that went belly up after Bain invested in it. The company not only lost 750 jobs, but the federal government had to come in to bail out its pension fund, while Bain walked away with millions in profits.”
Source: Think Progress
Kids, you know it’s time for one of my favorite words!
noun, verb, lev•er•aged, lev•er•ag•ing.
1. the action of a lever, a rigid bar that pivots about one point and that is used to move an object at a second point by a force applied at a third.
2. the mechanical advantage or power gained by using a lever.
3. power or ability to act or to influence people, events, decisions, etc.; sway: Being the only industry in town gave the company considerable leverage in its union negotiations. Synonyms: advantage, strength, weight; clout, pull.
4. the use of a small initial investment, credit, or borrowed funds to gain a very high return in relation to one’s investment, to control a much larger investment, or to reduce one’s own liability for any loss.
verb (used with object)
5. to exert power or influence on.
6. to use (a quality or advantage) to obtain a desired effect or result: She was able to leverage her travel experience and her gift for languages to get a job as a translator.
7. to provide with leverage: The board of directors plans to leverage two failing branches of the company with an influx of cash.
8. to invest or arrange (invested funds) using leverage.
It’s kind of like a fat cat and you and your friends on the bottom. Oh, what fun!