Friday, July 3, 2020

Celebrating Equality in Time of Massive Inequality, Rubenstein Style

Carlyle Group co-founder David Rubenstein's July 4th message encouraged citizens to look at our nation's founding principles as aspirational goals.

And we should resolve that in celebrating the Fourth of July and the Declaration, we are really celebrating where the country should be heading – where everyone can feel and be equal in rights and opportunities – and hopefully will arrive someday soon.
Mr. Rubenstein had the right to meet with Presidents.  Most citizens have not.  Carlyle lobbied for and kept preferred carried interest taxation for over a decade.  Rubenstein's calls are answered personally by sponsored politicians.  His will makes it into federal policy and law.  Citizens wanting the wealthy to pay more taxes or have healthcare be more affordable and less complex are ignored.

We should all have the opportunity to have employed the Chairman of the Federal Reserve and be bailed out with trillions in economic programs.   Instead many citizens worked for private equity affiliates and experienced the kind of massive upheaval that prioritizes interest payments, management fees and sponsor dividends over taxes, wage increases and benefit improvements.

Rubenstein knows Jefferson the idealist was different from Jefferson the industrialist.  The Smithsonian wrote:

It had long been accepted that slaves could be seized for debt, but Jefferson turned this around when he used slaves as collateral for a very large loan taken out in 1796 from a Dutch banking house in order to rebuild Monticello.  He pioneered the monetizing of slaves, just as he pioneered the industrialization and diversification of slavery.
Jefferson declined proceeds from his friend's estate that would've provided funds to free his slaves. Instead he used slaves as collateral on a very large loan.  The Smithsonian piece makes it clear Jefferson's actions were his choice:

A letter has recently come to light describing how Monticello’s young black boys, “the small ones,” age 10, 11 or 12, were whipped to get them to work in Jefferson’s nail factory, whose profits paid the mansion’s grocery bills.
So on July 4th know Thomas Jefferson was a PEU founding father.  That's my interpretation of history, Mr. Rubenstein.

Update 7-5-20:  NYT ran a piece citing the evils of private equity. "In pursuit of maximum returns, such firms have squeezed businesses for every last drop of profit, cutting jobs, pensions and salaries where possible."  The author cited the private equity tax loophole, carried interest.  Foreign Policy had this to say about the PEU boys, "close the loopholes in tax and regulatory law that allow private equity companies to function as predators on the real economy."  Matt Stoller wrote "corporate America fell into disrepair as private equity funds cut much more than fat, carving deeply into bone and muscle."

Update 7-7-20:  A descendant of Thomas Jefferson called for the Jefferson Memorial to be replaced. Frederick Douglas spoke these words in 1852, “To side with the right, against the wrong, with the weak against the strong, and with the oppressed against the oppressor! Here lies the merit, and the one which, of all others, seems unfashionable in our day.”

Update 7-11-20:  "Companies have been stiffing employees, a dynamic that’s getting worse decade after decade, which is tearing our country apart."  Chris Martenson added:  "Wall Street’s mighty siphons assure that nearly all of the Fed’s freshly printed money goes straight into the pockets of the most well-connected players."