[acb-hsp] How Vulture Capitalism Endangers Nation's Elderly

[Claude Everett]

He is so bold to mention Fannie Mae, Freddie Mac, Lehman Brothers , but he
has not the guts to mention B of A, Goldman Sax, Chase or Wells Fargo.


Regards,
Claude Everett
"I am opposing a social order in which it is possible for one man who does
absolutely nothing that is useful to amass a fortune of hundreds of millions
of dollars, while millions of men and women who work all the days of their
lives secure barely enough for a wretched existence." 
Eugene Victor Debs  
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From: acb-hsp-bounces at acb.org [mailto:acb-hsp-bounces at acb.org] On Behalf Of
peter altschul
Sent: Wednesday, January 18, 2012 11:52 AM
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Subject: [acb-hsp] How Vulture Capitalism Endangers Nation's Elderly

How Vulture Capitalism Endangers America's Elderly
  Ken Connor
  GOP presidential hopefuls -- most notably Newt Gingrich and Rick Perry --
have been attempting to derail Golden Boy Mitt Romney's campaign momentum by
attacking his background as a venture capitalist, deriding as "vulture
capitalism" the practice of acquiring businesses through leveraged buyouts
and attempting to increase their value through cutting costs, laying off
workers and stripping out assets.  For many staunch, laissez-faire loving
Republicans these criticisms have been deemed an attack on capitalism
itself.  The free market is all about competition, after all, and when a
company ceases to be effectively competitive the choice is to either shut
the doors and call it quits or do what needs to be done to right the ship.
For a self-professed economic conservative to smear a man's professional
reputation by painting him as an unscrupulous "vulture" is at best a
political cheap shot, at worse an act of ideological blasphemy.  Or is it?
  Though few people are aware of it, the nursing home industry is a classic
example of a sector where "vulture capitalism" is destroying lives.  With
the graying of America, Wall Street is finding the nursing home sector to be
increasingly attractive.  
Private equity firms are displacing public corporations and mom-and-pop
operators and moving into the ownership and operation of nursing homes.
This trend has proven disastrous for nursing home residents, resulting in
poorer quality care and increased violations of health and safety
regulations.
  These private equity investors cum "health care providers" seek to improve
profitability by cutting costs, most notably labor costs.  And since nursing
staff represents the biggest expense in a nursing home's budget, that's
where most of the cuts come from.  
The obvious problem with this tactic is that the nursing home industry is a
service intensive industry.  You can't turn and reposition immobile
residents without staff, and if you don't turn and reposition these folks
every two hours they develop festering bed sores.  You can't feed or provide
fluids to dependent residents without adequate staff, and when you don't
they become malnourished and dehydrated.  You can't provide incontinence
care without staff, and when you don't residents develop painful and
embarrassing infections.  The evidence shows an increase in all of these
problems with the advent of private equity capital in the nursing home
industry.
  There is nothing wrong with making a profit of course, and there's nothing
inherently wrong about trying to make a profit in the eldercare industry.
But it is wrong to secure those profits at the expense of the clientele.
Part of being a responsible corporate citizen, after all, is following
through on your professional commitments in a conscientious and ethical
manner.  
This is particularly important when your "business" consists of providing an
environment of care, comfort, and dignity for men and women in the twilight
of life.
  The irony is that few people have been enablers of these practices more
than Gingrich and Perry, who under the guise of "tort reform," have fostered
policies that ensure that corporate predators are not required to fully
account for their wrongdoing.  
Governor Perry's Texas is home to some of the nation's more draconian tort
reform measures and Gingrich has long been a champion of similar policies,
though recently he's attempted to distance himself from this position.
  But principle doesn't seem to stand in the way of these fellows.  That was
then and this is now.  Given the bitter attitude that most Americans feel
for Wall Street and Big Business in the wake of the financial meltdown and
subsequent recession, their calculus seems to be that there is more
political advantage to be gained by demonizing their former benefactors.
That Wall Street has clearly cast its lot with Romney at this point might
also play a role in their decision to play the populist card despite their
Blue Blood roots.
  As for those who are quick to label as heretics those conservatives with
the nerve to question the ethics of "vulture capitalism" it is important to
understand that merely calling into question unethical business practices
does not equate to an attack on the merits of capitalism.  Business is no
less subject to the rule of law and ethical scrutiny than any other aspect
of life.  To suggest that capitalism is not subject to either law or ethics
invites predatory and destructive practices.  Wasn't the Wall Street
meltdown, fueled by the unscrupulous practices of enterprises like Fannie
Mae, Freddie Mac, Lehman Brothers, and others all the evidence we need of
the destruction wrought by practitioners of "vulture capitalism?" How
quickly we forget.
  Meanwhile, the practices of predatory capitalists in the nursing home
arena continue to harm our institutionalized elderly.  Who will speak up for
them?
  Ken Connor is Chairman of the Center for a Just Society.
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