- Matt Taibbi: This is how private equity deals work, and this is what most people don’t understand. When a company like Bain wants to take over a company, let’s say, like KB Toys, what they do is — it’s very similar to the process of getting one of those no-money-down mortgages — you put down a tiny amount of money, in the case of Bain, you put down about 5 percent of his own cash, $18 million. He financed the other $302 million that he got, and what he did was he went to a bank and you’re borrowing against the assets of a company you don’t own yet. So what you do is you say to the bank …
- Ahmed Shihab-Eldin: Which is legal.
- Matt Taibbi: Which is totally legal. But what you do is you say to the bank, ‘I’m going to take over this company,’ or ‘I’m going to take over some company, and when we do that company is going to be indebted to you.’ So they borrow $300 million. With that money, and his money, you buy a controlling stake in the company that you’re trying to take over, and once you do that, the debt that you yourself took out becomes the debt of the company that you have taken over. And this is very poorly understood by most people. Now there’s the other problem, now if you’re KB Toys, you’ve borrowed $300 million and you owe the bank. And you haven’t done it to buy new equipment or open new stores or do research and development, all you’ve bought with that $300 million is …
- Ahmed Shihab-Eldin: Debt.
- Matt Taibbi: Yes, and the privilege of being managed by Mitt Romney, that’s really all you’ve bought.
- Ahmed Shihab-Eldin: Privilege.
Well done, Breitbart fans, well done! In less than 24 hours you’ve hacked into my Wiki page, published my telephone number on Twitter, called the Rolling Stone offices pretending to be outraged “advertisers” (anonymous ones, who hung up before we could figure out which “ads” to pull), and then spent all night calling and texting my phone with various threats and insults, many of them directed at my family. “Better grow eyes in the back of your head,” was one; “I’m going to take a shit on your mother’s grave,” was another; a third called my wife a “piece of shit like you,” and many others called me a “pile of human excrement.”
Those last ones to me were the most interesting because that quote is lifted directly from Breitbart’s own obit of Ted Kennedy, which like me Breitbart ran just hours after his subject died. So that means the writers of these letters knew that what I did was exactly the same as what Breitbart had done, and yet they still found a way to be unironically outraged on Breitbart’s behalf. I thought: “These people don’t even get their own jokes.”
I would give just about anything to sit David Brooks down in front of some single mother somewhere who’s pulling two shitty minimum-wage jobs just to be able to afford a pair of $19 Mossimo sneakers at Target for her kid, and have him tell her, with a straight face, that her main problem is that she doesn’t work as hard as Jamie Dimon.