President Joe Biden gave his first State of the Union address. The first two members of his cabinet to enter House chambers were former Pine Island Capital partners, Anthony Blinken and Lloyd Austin.
Biden cited three things in his speech that brought America's greed and leverage boys to mind. First, he said he would target Russian oligarchs yachts and luxury villas. He did not mention American oligarchs whose billions enable them to set government policy. President Biden spent Thanksgiving at the Nantucket estate of Carlyle Group co-founder David Rubenstein.
Second, President Biden talked about billionaires paying a lower tax rate than secretaries. He didn't say "carried interest", but that is the preferred taxation granted to private equity underwriters (PEU).
Serious challenges to PEU preferred taxation failed multiple times over the last twelve years. Carlyle's Rubenstein played a critical role as a lobbying non-lobbyist in saving lower tax rates. The Trump tax cuts were an absolute bonus to billionaire PEU co-founders, as well as U.S. Congress persons.
The third thing he mentioned was cutting healthcare costs. Private equity barbarians overran America's healthcare system long ago. The Carlyle Group ran nursing home giant ManorCare into bankruptcy after selling the real estate and paying itself management fees and special dividends. Carlyle profited from driving the company into the ground.
Biden's cabinet is chock full of PEUs. Politicians Red and Blue love PEU and increasingly, many are one. Both parties believe in greed and leverage. The rest is political theater.
