Thursday, October 3, 2019

Politicians Red and Blue Cater to PEU

Bloomberg had two stories on federal laws that helped private equity underwriters (PEU).  The first dealt their latest massive lobbying push to preserve PEU preferred taxation, the billionaire tax break known as carried interest.

As Republicans set out to overhaul the federal tax code in 2017, the private equity world leveraged its influence. The mission: protect the wildly lucrative tax break that’s helped mint more billionaires than almost any other industry.

An industry that’s reshaped the American economy now appears to be heading into an even bigger war to preserve the generous tax breaks and loose oversight that helped it amass more than $4 trillion in assets and launch a new Gilded Age.
A different article on imploding unicorns mentioned:

....deregulation efforts in the investing industry in the 1990s, particularly the National Securities Markets Improvement Act of 1996. That law made it easier for startups to raise funds by reducing some disclosure requirements. It also increased the number of investors allowed in a fund before it was required to register under the Investment Company Act. The result, according to the authors, is that the spigots of private equity and venture capital were opened wide.

President Bill Clinton sold the government background check division to the PEU boys.  The Carlyle Group ended up owning the company twice.  USIS changed to Altegrity but ended up bankrupt, like many over-leveraged companies batted back and forth under various PEU ownership.

Clinton's team also brought deregulation through the repeal of Glass-Steagal.  This enabled financial shenanigans that put many retirees savings in jeopardy.  Guess who wants to help workers grow their retiree nest egss?  The same PEU boys that successfully got the Obama and Trump White Houses to ignore their campaign pledges to take away carried interest and tax PEU profits as income.  Their has to be a final bagholder and who better than America's elderly.

Politicians Red and Blue love PEU.   Clinton, Bush, Obama and Trump have all served the greed and leverage boys.  All have been and will be rewarded for a PEU job well done.  

Update 10-3-19:  Someone else figured out the PEU way:  "the billionaire class has already proven with its actions that it cannot exist without actively working to manipulate governments in a way that undeniably subverts democracy and the will of the people."  Another researcher noted the bipartisan Wall Street White House.