Saturday, September 11, 2021

Another Disturbing David Rubenstein Interview

Yahoo Finance

Earlier today, as part of a private event, this (TechCrunch) editor was afforded the opportunity to talk with some of the biggest names in the world of private equity, including Carlyle co-founder David Rubenstein; Bain Capital co-chair Steve Pagliuca; Jean Salata, the CEO and founding partner of Baring Private Equity Asia; and Sheila Patel, the vice chairman of B Capital Group AGM and formerly the chair of Goldman Sachs Asset Management.

We covered a lot of ground, from how interested Carlyle and the other firms are in blockchain technologies (the feedback here was a little mixed), to how focused they are on sustainable and socially responsible investing. On this front, Rubenstein claimed that "private equity people are very focused on it."

Rubenstein's family office Declaration Partners invested in blockchain technology firm Paxos in two funding rounds.  Was that private event a Rubenstein gathering of elected officials?

Consummate salesman Rubenstein is known for influencing government policy to make money.  That's why Carlyle set up in Washington, D.C.  He's also known to push investments where he already has a stake.  

Consider his comments to TechCrunch's editor, where Rubenstein illuminates income inequality, a direct result of decades as a policy making billionaire:

They say this is the best of times and the worst of times. It's the best of times for investors, because if you're in the tech world, if you're in the investing world and you're investing in India, China and the United States, you've made a lot of money and you're beginning to think you're a genius because you made so much money, and you just don't realize that it's the worst of times for people that don't have internet access, [or who] work with their hands and not with their minds as much, [or who] aren't educated [or] have childcare [needs]. Really, in the United States and probably other parts of the world, we are further and further creating [an] economic divide unfortunately and greater income inequality and a lack of social mobility, and that's a real problem.

Rubenstein is a major architect of the economic divide that took decades to grow.  Private equity underwriters (PEU) sponsored elected officials who kept preferred carried interest taxation in place and passed corporate tax cuts.  

They have fellow PEU Jay Powell as Fed Chair.  His monetary policy, lots of liquidity and low interest rates, favored the greed and leverage boys.

For those for whom it's been the best of times, eventually something will end. At some point, the Federal Reserve will increase interest rates -- probably not until 2023, but maybe before -- and at some point, people begin to say, "I'm taking more of my chips off the table. I'm not going to invest as much at these valuations." I just got off a call this morning [regarding] a small deal in Asia where people want to pay things like 25 times projected revenues.

The British have become aware of the damage done by the PEU boys.  They hollowed out countless companies by shedding valued employees, selling core assets and loading them with debt.  If the greed and leverage boys are ubiquitous can they hollow out a whole economy?  

Update 9-19-21:  House Democrats chose to let policy making billionaires keep their decades of ill gotten gains.  No surprise to PEU Report.  Politicians Red and Blue love PEU.

Update 10-13-21:  Rubenstein is worried about the democracy he crafted as a policy making billionaire.  Politicians greed for power is matched by the PEU boys' desire for money.  Together they divided the country for their own spoils.  

Update 1-14-22:  After bailing as lead developer for the Port of Corpus Christi's Harbor Island Carlyle plans to start a new infrastructure offering.  Time to mine more of Uncle Sam's wallet?

Update 4-19-22:  A Russian oligarch put Chelsea FC up for sale and one bidder is U.S. oligarch Bain Capital's Steve Pagliuca.

Update 5-27-22  Paxos received a federal trust charter from the Office of the Comptroller of the Currency.  Paxos National Trust entity is a federally regulated entity offering custody services, stablecoin management, payment, exchange and other services.  It is different from New York Department of Financial Services-chartered Paxos Trust Co.