Alternet’s Joshua Holland offers a clear explanation of how firms such as Bain Capital make their money.

Were it not such a sad statement about how superficial our political discourse has become, the indignant defenses of Bain Capital by self-flattering “centrists” in the media would be almost comical.

The simple reality that has been totally obscured in most of the coverage of what has been reduced to a “political flap,” is that finance is what’s known as an “intermediary good” – it doesn’t produce anything directly. It can — and does — stimulate the larger economy. But the financial sector can also extract wealth from the real economy, at a cost.

He concludes:

We should consider how our financial sector has become bloated, swimming in capacity the larger economy doesn’t need.

Read the full article on Alternet.