Former Labor Secretary Robert Reich said in his recent column on carried interest taxation:
The sole reason the loophole survives even during Democratic Congresses, is fierce lobbying by the private equity industry – and the dependence of too many Democrats on campaign funding from the partners of private equity and hedge funds.
President Bill Clinton opened the door to the greed and leverage boys and welcomed them to Uncle Sam's wallet. Every White House since has catered to private equity founders. Politicians Red and Blue love PEU.
During the 2020 election, Biden’s presidential campaign received over $3,000,000 from people working in private equity and related types of investment funds.Reich knows where President Joe Biden spent Thanksgiving, at the Nantucket estate owned by billionaire founder of The Carlyle Group David Rubenstein. Biden has stayed there numerous times.
Rubenstein has direct access to the White House and Capital Hill. No, he's not a registered lobbyist. He doesn't have to register his high powered influence peddling.
Reich noted the failure to address the carried interest problem during President Barack Obama's first term.
In 2010, House Democrats squeaked through a tax plan that closed the loophole, but Democrats who controlled Senate wouldn’t go along.
Surely, Robert Reich has heard the infamous story of how Rubenstein saved preferred carried interest taxation for private equity underwriters (PEU). One version of the story highlighted David Rubenstein's influence:
On June 8, 2010 Rubenstein’s cell phone rang as he was speaking to supporters of the Economic Club, at the Phillips Collection. He left the stage to take the call. Among those in the audience was Gary Shapiro, the consumer-electronics lobbyist who was Rubenstein’s travel companion to Japan in the ’80s. After a few minutes, Shapiro recalls, Rubenstein returned and said, “That was a senator. That one call just saved us on carried interest.”
PEU Blue Team members include Senators Joe Manchin and Krysten Sinema. How many times do they have to visit the White House to discuss the Biden agenda? Has David Rubenstein joined them in person or by Zoom? That would not surprise me at all.
The public gets strung along while elected officials serve billionaire policy makers. It's a multi-decade event.
Update 12-15-21: Robert Reich had to go to England to speak his mind. Europe stands ready to make it easier for the common person to invest in private equity.
...leading buyout firms including Blackstone Inc. and Apollo Global Management Inc. plan to target individual investors as a fresh source of fee-paying capital. Blackstone said it wants half of new client money to come from individuals.
Update 1-22-22: "Weak taxation of the wealthy combined with anemic regulation of campaign fundraising have handed America's billionaires outsized political influence to go along with their huge economic clout." U.S. billionaires dumped a staggering $1.2 billion into the 2020 elections—a 39-fold increase compared to 2010. "In the 2010 election cycle, billionaires gave $19 million to Republicans and $11 million to Democrats," ATF noted. "By the 2020 cycle, those respective figures were $656 million and $539 million." They expect a return on their political investment (ROI).
Update 2-13-22: Reich's latest column omitted the Blue Team's role in building American oligarch's. Bill Clinton and Barack Obama did their part to grow PEU wealth at the expense of the worker.
