highlighted the aim of the session:
to explore the importance of collaboration between businesses and governments in maintaining global competitiveness. The leaders also discussed positioning in key markets as a strategy for successfully competing in the global arena.
The Global Leadership conference closed with two iconic business leaders, Fed-Ex's Fred Smith and The Carlyle Group's David Rubenstein. Here's the host highlighting Carlyle's Rubensteiin:
Who not only has a global perspective, but has done so much for Washington, and through his leadership and philanthropy and his championing of the culture hereCulture could be viewed as the arts in Washington. It could also be the insidious culture of money and power that D.C. represents. Rubenstein established The Carlyle Group in 1987 with the intention of leveraging government business, power and relationships. Note that Carlyle grew from the "Great Eskimo Tax Scam."
The Meridian session started with Rubenstein acting as host, something he frequently did for the Economic Club of Washington. Rubenstein mined Fed-Ex Chief Fred Smith early vision and struggles. The topic turned to philanthropy. Fred highlighted Red-Ex's fire extinguisher role in assisting in major disasters.
Disaster relief is the most important thing we do, because no one else can do it to the extent we can.Somehow Rubenstein kept a straight face. The Carlyle Group's LifeCare Hospitals lost 25 patients in the horrific aftermath of Hurricane Katrina. This fact was omitted from George W. Bush's Lessons Learned report on Hurricane Katrina.
In speaking about the U.S. debt situation Rubenstein might've well been speaking about LifeCare.
"We have too much debt. It's not sustainable."
LifeCare Hospitals declared bankruptcy in December 2012. Rubenstein didn't suggest Uncle Sam do what Carlyle did with LifeCare.
"Right now members of Congress won't vote for things their constituents don't want them to vote for. I often say to members of Congress why are you so afraid if you violate what you think your constituents want you to do?"
First of all, Congressional representatives don't vote public will. The majority of citizens disapproved of preferred carried interest taxation for private equity underwriters (PEU's). Rubenstein visited Capital Hill numerous times to save carried interest taxation since 2007.
Rubenstein went on to implore Capital Hill incumbents:
"Life after Congress is not so bad."
That could've been a recruiting speech, given Rubenstein put many Red and Blue ex-public servants to work at Carlyle. A "PEU principled" congressman would have incredible opportunities in D.C.'s parasitic greed and power world. But back to Rubenstein's philanthropy.
"I give back to things in Washington because Washington was very good to me."Washington kept preferred carried interest taxation, silently approved Carlyle's potentially contentious global deal, performed risk management on behalf of Carlyle post Hurricane Katrina and provides huge chunks of business for a number of Carlyle affiliates.
The sad state of leadership was punctuated when Fed-Ex's Fred Smith said under an early Fed-Ex failure:
"I would've become a private equity guy. A lot more lucrative, I think."
Even Smith picked up on PEU's outsized returns. However, Smith and Rubenstein agreed on one critical strategy, business tax cuts.
President Obama is onboard for a cut to 28%. The price for business cuts may be an increase in the individual tax rate. Smith noted that 90% of businesses in America file as individuals. Given this fact, business tax cuts are clearly for the 10%, many of them PEU owned.
This brings me back to Rubenstein's advice. Which group does Congress not have the balls to offend? Recent history favors PEU's..