Adam Taggart of Thoughtful Money once pondered offering a private equity product to his Wealthion viewers. I can't imagine that happening after watching his latest "Barbarians in the Boardroom" interview with noted author Gretchen Morgenson (embedded above).
Frankly, it is heartening to hear two people so eloquently state the damage done by private equity underwriters (PEU) in industry after industry. I saw the potential in 2006 after reading the White House Lessons Learned report on Hurricane Katrina. The hospital with the highest death toll post Katrina had been purchased by The Carlyle Group months prior. Those deaths got not one mention, zero. After finding more disturbing situations regarding private equity-government connections I created PEU Report in July 2007.
Over the last seventeen years the greed and leverage boys took over much of the U.S. economy. Founders dined with and advised U.S. Presidents.
Red and Blue political campaigns targeted PEU's preferred "carried interest" taxation for elimination. None have pulled it off, despite virtually no public support for retaining the tax break.
The Biden Cabinet is chock full of PEUs. His two Chiefs of Staff? Both PEUs. Trump's top advisors rushed to start PEU firms post public service, Jared Kushner-Affinity Partners and Steven Mnuchin-Liberty Strategic Capital.
Blue Team Presidential nominee Kamala Harris turned a blind eye to Mnuchin's OneWest Bank's robo-foreclosing on homeowners in the wake of the September 2008 financial crisis. Harris did so as California's Attorney General.
“OneWest rushed delinquent homeowners out of their homes by violating notice and waiting period statutes, illegally backdated key documents, and effectively gamed foreclosure auctions.”
The FDIC subsidized OneWest to the tune of $1 billion as it did what it pleased to struggling homeowners, irregardless of legality.
Billionaire techbros joined the PEU storming of D.C. Their convergence means even more massive donations washing around our nation's capital. Techbros/PEUs want low(er) taxes, less regulation/legal protection, access to Uncle Sam's giant wallet and an "all of government" blessing for cryptocurrencies, secondary PEU offerings, and fee secrecy (the price is not the price).
Politicians Red and Blue love PEU and their new tech-brethren. Increasingly more are one (even both like JD Vance).
The common people caught a glimpse of this recently on MSNBC with the interview of Carlyle Group Global Strategist Admiral James Stavridis. There was nary a Carlyle logo in sight, so I added one.
CNN's Jake Tapper interviewed billionaire tech bro Reid Hoffman regarding his planned fundraiser for Kamala Harris and his interest in having Federal Trade Commission Chair Lina Kahn replaced. Tapper, to his credit, noted that sizeable political donations could buy influence.
Hoffman jumped on his verbal unicycle, balancing all of his roles,
political donor, expert, investor, owner, employer, founder and board member. He implied they
never overlap, as if he couldn't do something nefarious within any of
those roles. Reid is the poster child for "conflicts of interest" in the Microsoft-Inflection deal given he sits on both sides of the deal (Microsoft board member, Inflection AI co-founder and Greylock Partner-Inflection's owner).
Reid wants Kahn replaced because the
administration's antitrust efforts in the technology space are "bad for
investment." Billionaire Hoffman's Greylock Partners bio page states:
His foundational thesis of the power of networks extends beyond marketplaces and social ecosystems. Recently, it has led to his investments in sectors including autonomous transportation, cryptocurrency, and shipping logistics.
And how
might Uncle Sam serve as a catalyst for any of Reid's newest endeavors? What's on tap for autonomous transportation, crypto and shipping logistics at the federal level?
Hoffman is Chairman of Endeavor Catalyst, an international investment vehicle.
Unlimited Hangout reported on the history of global tamperer Endeavor. The story included:
By ensuring that they dominate the leaders of both the public and private sectors of the current and new generations, these oligarch networks are able to control both sides of the “public-private partnership.”Both sides of the deal! Reid is well aware of that in his Microsoft-Inflection tie up (that awaits FTC review). Calling for a new FTC Chief in the middle of a review sounds like yet another conflict of interest. Multiple hats, multiple conflicts.
People pushing their book is nothing new. Expecting government to facilitate that book has been a several decade degradation. As Gretchen and Adam pointed out the system has been grossly distorted in their favor. I'd hate to see if furthered.
Update: Big's Matt Stoller wrote about "the price not being the price:"
....Federal Trade Commission investigating McKinsey, and more broadly, the problem of surveillance pricing, which means corporations setting different prices for different consumers based on big data algorithms.
The prospect of data-driven surveillance pricing horrifies most people and generated wide attention. Even CNBC’s Jim Cramer condemned it, and said that he couldn’t believe he agrees with Lina Khan on it.
It turns out McKinsey was using the same playbook on employee pay, advising companies in a possible form of wage fixing. I saw plenty of "apparently legal" wage theft while working for a PEU owned healthcare company. The price isn't the price and the pay isn't the pay in PEU land. It's all a construct for earning fees.
