Saturday, October 1, 2016

Rubenstein Interviewed at WIF

The Atlantic interviewed Carlyle Croup co-founder David Rubenstein on Wednesday.  Here are a few points made during the softball interview at the Washington Ideas Forum:

1.  Rubenstein met with House Speaker Paul Ryan this morning via an interview at the Economic Club of Washington.
Rubenstein is the Club's President and if famous for his intellect and humor displayed during guest interviews.  He's also co-founder of The Carlyle Group, a politically connected private equity underwriter (PEU)

2.  There are four issues facing the economy.  Number 1 is tax reform.  "We haven't had tax reform since 1986 and the tax code is little complicated and many people think unfair.."
The Carlyle Group was founded in 1987 and rode preferred "carried interest" taxation for nearly thirty years.  Rest assured Rubenstein will lobby for tax reform to benefit his wallet, just as he's done the last decade to preserve preferred PEU taxation

3.  The next three issues are trade, immigration and infrastructure.  He's not sure trade legislation will pass in the lame duck session after the election.  Rubenstein said it's been a long time since we've had immigration reform and believes it's time.  He referred to potholes as evidence of crumbling infrastructure all over the country.
Rubenstein did not say Carlyle has two funds targeting 15-20% annual returns on infrastructure opportunities.  Carlyle established a $1.1 billion North America infrastructure fund in 2006.  It's next infrastructure fund is global and over twice the size:

"Carlyle Group is targeting $2.5 billion for Carlyle Global Infrastructure Opportunities I, which features longer hold times for non-core infrastructure investments with a return target in the mid-teens."

4.  The interview turned to pandering over Rubenstein's patriotic philanthropy.  He encouraged Americans to give back to the their country and brought up four founding fathers, George Washington, Thomas Jefferson, James Adams and Alexander Hamilton.
He did not share how Thomas Jefferson used the value of his slaves as collateral for a loan long after writing "All Men are Created Equal."  Nor did Rubenstein, the history buff, educate the public that Jefferson had ample funding to free his slaves, courtesy of the last will and testament of a dear friend.  Yet, Jefferson did not, preferring instead to be a man over several industries run from and around Monticello.  Jefferson was a pioneering PEU.

5.  Rubenstein shared his theory that all the great people today have gone into private equity.  The interviewer laughed, then offered journalism.
Journalists are the group that offer softball questions to the Rubensteins' of the world, lest they get shunned for future stories/interviews.

6.  Rubenstein talked about his support of the African American Museum, which is part of the Smithsonian, and the Washington Monument.  He talked about the history of slavery but left out the role our Founding Fathers' played.  He referred to slavery as the "birth defect" of our country rather than our leader's privileged intent and inability to see through the eyes of others.
I would suggest today's insider class is just as focused on their power and privilege as their blind predecessors be they Jefferson, Hamilton, Vanderbilt, Mellon or Morgan.  Ever the consummate salesman Rubenstein's spin is intended to elevate his and The Carlyle Group's image.

7.  The interview closed with the Washington Monument's elevator problem.  It's 100 years old and needs some assistance.
Using the elevator symbolism for our economy, why do have few people in our country gotten to the top floors income/asset wise?  That might be the next question for Mr. Rubenstein, if it's allowed.