Dissent in the 1%
January 16, 2012 8:48 AM Subscribe
posted by nickrussell (63 comments total)
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Last week, three founders of private equity fund The Carlyle Group shared a year's pay of $413M
. They didn't do the private equity industry any favours
as there has already been additional interest from the government for greater taxation of this elite subcategory of the 1%.
The following day, in You're so Bain
, Bloomberg looked more deeply at the issues facing PE:
Private equity is a rapacious destroyer of the middle class. No, it renews American industry by infusing old companies with capital and ideas.
Well, which is it?
On the heels of the financial crisis and Occupy Wall Street movements, Mitt Romney's campaign for President is bringing an increasing level of attention to his past -- including, by the numbers, a very successful stint at leading PE house Bain Capital
One of the key pieces of research cited by Bloomberg is a paper released in late 2011 by research faculty from UVA, Oxford, and University of Chicago: Private Equity Performance: What Do We Know?"
This is the latest in a line of academic research showing that for investors, PE routinely provides better returns than public markets.
The ubiquitous Oracle of Omaha
thinks private equity is both "Orwellian" and "dangerous"
in the way those market-beating returns are generated.
Newt Gingrich supporters have acted quickly to exploit the private equity past as a potentially mortal weakness for Romney: "King of Bain: When Mitt Romney Came to Town," a dark tale casting Romney as a rapacious profiteer
Similarly, The New York Times asserts there are different kinds of the 1%
Regardless, this dissent within the 1% is bringing an intentionally low-profile sector of the global financial system out of the shadows
. BusinessWeek offered the following dramatic take
on the conversation:
Private equity does not raise corn, build cars, or teach children. What it does, when it works, is make the economy more efficient—while enriching the likes of Mitt Romney. That’s what the facts show. Whether America’s next President should come from the privileged precinct of private equity is something only the voters can decide.