How the US Economy Works

A friend posted this to my email list. Wonderful insight into how the US economy works.

Benner, Katie. 2007. “What Would Blackstone Do with Chrysler? CNN.Money (3 April).


“For Blackstone, it’s all about the game. You buy an asset, and there’s a huge amount of value to be unlocked by repackaging the assets and finding buyers,” says Phillip Phan, a professor of management at Rensselaer Polytechnic Institute. “There are really two ways to make money. One is by cutting costs, rewriting pensions contracts, closing capacity and outsourcing to Asia and Eastern Europe, where the auto sales growth is anyway. Or you just sell off the assets and trim product lines.”


2 comments so far

  1. Our economy used to work by building these companies — now destroying them for a quick buck seems to be preferable. Reminds me of what the mob does when they take over a business. Loot it, drain it, walk away.

    At least they were not contributing to credit expansion.

  2. mperelman on

    I am glad that someone understands the way the economy works.

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