Wednesday, May 30, 2012
Tuesday, May 29, 2012
Who has skin in the poverty game?
The first paragraph in the comment section following Paul Krugman's latest NY Times rant Big Fiscal Phonies is telling:
That narrative, while nothing new, sure seems to be the mantra of the (I distinguish) "hard left" these days. I.e., the right, and their benefactors (the "wealthy") would have people starving in the streets, and that this country somehow owes its "greatness" to its "safety net" programs. Krugman went so far as to say that Republicans and their financial backers are willing to "snatch food from the mouths of babies (literally, via cuts in nutritional aid programs)."
Among partisan economists, Krugman is as aggressive as they come. But to suggest that anyone, wealthy or otherwise, is out to starve babies is beyond ridiculous.
Think about it:
Would the wealthy somehow benefit from starving babies?
Before welfare, etc., did wealthy Americans simply sit back and watch those of lesser means die in the streets?
Would today's wealthy American just sit back and watch?
Are the wealthy better or worse off when an individual emerges from poverty?
Are today's social programs working?
Do today's social programs exist for their own sake?
Who's more likely to facilitate a legitimate plan to employ the poor; a wealthy employer or a bureaucrat?
Who, to a greater extent, resides in the "safety net"; the recently fallen or those born within it?
Do government programs support the victim or do they support the safety net entangling him?
Does making the safety net more comfortable in any way inspire the entangled to free himself?
If we were to win the war on poverty, what would happen to the troops?
Am I being ridiculous (suggesting that those who make their living [or devote their political careers to] "caring" for the poor would at some level [subconscious even] wish for the perpetuation of poverty)? Am I as egregious in my (albeit subtler) assertion as Krugman is in his? Perhaps, but who---the wealthy or the bureaucrat---has more skin in the game?
P.s. Speaking of ridiculous; were you appalled a year or two ago by the commercial showing a Paul Ryan look-alike wheeling a little old lady off a cliff? Well apparently some on the right are no better; there's a sequel on the way featuring a President Obama look-alike doing the same... Whether you lean right or left, you have to find this sort of political shenanigan (Krugman's comment included) to be utterly tasteless... And utterly insulting of our intelligence...
I am very afraid that, as of today, this election is a toss up! The GOP has not changed its fiscal policy of tax cuts for the wealthy being financed by the destruction of those safety net programs that have made this country great.
That narrative, while nothing new, sure seems to be the mantra of the (I distinguish) "hard left" these days. I.e., the right, and their benefactors (the "wealthy") would have people starving in the streets, and that this country somehow owes its "greatness" to its "safety net" programs. Krugman went so far as to say that Republicans and their financial backers are willing to "snatch food from the mouths of babies (literally, via cuts in nutritional aid programs)."
Among partisan economists, Krugman is as aggressive as they come. But to suggest that anyone, wealthy or otherwise, is out to starve babies is beyond ridiculous.
Think about it:
Would the wealthy somehow benefit from starving babies?
Before welfare, etc., did wealthy Americans simply sit back and watch those of lesser means die in the streets?
Would today's wealthy American just sit back and watch?
Are the wealthy better or worse off when an individual emerges from poverty?
Are today's social programs working?
Do today's social programs exist for their own sake?
Who's more likely to facilitate a legitimate plan to employ the poor; a wealthy employer or a bureaucrat?
Who, to a greater extent, resides in the "safety net"; the recently fallen or those born within it?
Do government programs support the victim or do they support the safety net entangling him?
Does making the safety net more comfortable in any way inspire the entangled to free himself?
If we were to win the war on poverty, what would happen to the troops?
Am I being ridiculous (suggesting that those who make their living [or devote their political careers to] "caring" for the poor would at some level [subconscious even] wish for the perpetuation of poverty)? Am I as egregious in my (albeit subtler) assertion as Krugman is in his? Perhaps, but who---the wealthy or the bureaucrat---has more skin in the game?
P.s. Speaking of ridiculous; were you appalled a year or two ago by the commercial showing a Paul Ryan look-alike wheeling a little old lady off a cliff? Well apparently some on the right are no better; there's a sequel on the way featuring a President Obama look-alike doing the same... Whether you lean right or left, you have to find this sort of political shenanigan (Krugman's comment included) to be utterly tasteless... And utterly insulting of our intelligence...
Sunday, May 27, 2012
Spend the Wealth!! - Or - The Household Income Fallacy - Or - One-time Pie-Hoarders
Truly each (or perhaps many) of us lives in his own echo chamber
Friday, May 25, 2012
My response to pushback on The Magic of Private Equity...
I've received some (understandable) pushback on yesterday's article The Magic of Private Equity from folks with firsthand experience... Clearly, not every private equity project has evolved into a lasting great American enterprise... Depending on the source, you'll find Bain's (for example) success rate reported to be as high as 92% and as low as 50%... I suspect reality lies somewhere in between...
For the person who might still feel (success stories notwithstanding) that private equity firms have utterly no social utility, that they represent nothing more than the greedy rich getting richer, I've amended a couple paragraphs (in red below) from yesterday's post to drive home an important point... Understand that if all private equity firms exist to turn their victims into anorexic, debt-ridden, entities, we have little to worry about going forward... For they'll fail their ultimate objective (selling at a huge profit, after levering up the company) miserably... Make no mistake, the bankers who would fund those special dividends, and the would-be buyer (and the would-be buyer's bank) will perform their due diligence (thoroughly) before making the private equity executive "obscenely" richer... If indeed the examples presented to me, and others I've (since yesterday) Googled are the rules rather than the exceptions, well then, again, we've nothing to worry about - the market will sooner-than-later purge itself of these abusers, I assure you...
Now here's my warning to those of you who believe private equity firms exist only to make their partners mega-rich at the expense of businesses, their employees and the overall economy: Under no circumstances are you to ask Uncle Sam to fix it through regulation... Let the market handle it... For if politicians step in (alas, I understand they're already building their case), well, let's just say if you hate greed, you ain't seen nuthin yet...
You see biggovernment is THE playground of greedy corporate executives... I.e., the more government influences industry the more incentive industry has to influence government - and make no mistake, it will... Regs will indeed be written, but their authors will leave nicely paved paths for their benefactors (campaign contributors, etc.) to stroll right through...
Uh-oh!! Now that I think about it, one politician has indeed been raking in the contributions from the private equity industry... In fact, at the rate of $35,800 a plate during a recent fund raiser hosted by none other than Tony James, the president of private equity firm Blackstone Group... Here's an excerpt from last week's Fortune article At Obama fundraiser, no one mentions private equity:
Obama raises money from private equity, hours after bashing the industry.
FORTUNE -- At a Democratic Party fundraiser, I guess it's inappropriate to mention the elephant in the room.
President Obama last night spent time at the Park Avenue apartment of Blackstone Group (BX) president Tony James, to press the Wall Street flesh and collect $35,800 per plate. It came just hours after his campaign launched its first formal attack on Mitt Romney's record running Bain Capital -- a private equity firm not terribly dissimilar from Blackstone. Talk about awkward! Click here for entire article...
As for whether Romney would accept a little assistance from private equity, given his background, there's no need to go looking, it would make perfect sense...
Here are the amended paragraphs from yesterday's article...
Step Six: If they do their job well, the company is
For the person who might still feel (success stories notwithstanding) that private equity firms have utterly no social utility, that they represent nothing more than the greedy rich getting richer, I've amended a couple paragraphs (in red below) from yesterday's post to drive home an important point... Understand that if all private equity firms exist to turn their victims into anorexic, debt-ridden, entities, we have little to worry about going forward... For they'll fail their ultimate objective (selling at a huge profit, after levering up the company) miserably... Make no mistake, the bankers who would fund those special dividends, and the would-be buyer (and the would-be buyer's bank) will perform their due diligence (thoroughly) before making the private equity executive "obscenely" richer... If indeed the examples presented to me, and others I've (since yesterday) Googled are the rules rather than the exceptions, well then, again, we've nothing to worry about - the market will sooner-than-later purge itself of these abusers, I assure you...
Now here's my warning to those of you who believe private equity firms exist only to make their partners mega-rich at the expense of businesses, their employees and the overall economy: Under no circumstances are you to ask Uncle Sam to fix it through regulation... Let the market handle it... For if politicians step in (alas, I understand they're already building their case), well, let's just say if you hate greed, you ain't seen nuthin yet...
You see biggovernment is THE playground of greedy corporate executives... I.e., the more government influences industry the more incentive industry has to influence government - and make no mistake, it will... Regs will indeed be written, but their authors will leave nicely paved paths for their benefactors (campaign contributors, etc.) to stroll right through...
Uh-oh!! Now that I think about it, one politician has indeed been raking in the contributions from the private equity industry... In fact, at the rate of $35,800 a plate during a recent fund raiser hosted by none other than Tony James, the president of private equity firm Blackstone Group... Here's an excerpt from last week's Fortune article At Obama fundraiser, no one mentions private equity:
Obama raises money from private equity, hours after bashing the industry.
FORTUNE -- At a Democratic Party fundraiser, I guess it's inappropriate to mention the elephant in the room.
President Obama last night spent time at the Park Avenue apartment of Blackstone Group (BX) president Tony James, to press the Wall Street flesh and collect $35,800 per plate. It came just hours after his campaign launched its first formal attack on Mitt Romney's record running Bain Capital -- a private equity firm not terribly dissimilar from Blackstone. Talk about awkward! Click here for entire article...
As for whether Romney would accept a little assistance from private equity, given his background, there's no need to go looking, it would make perfect sense...
Here are the amended paragraphs from yesterday's article...
Step Six: If they do their job well, the company is
Thursday, May 24, 2012
The Magic of Private Equity (video)
In just over 2 minutes, former Labor Secretary Robert Reich teaches us how private equity managers become "obscenely rich"... Following is the text -each point followed with my take (in red)... I want to offer you a cleaner (and clearer) insight into "the magic of private equity"... This is not my defense of a particular candidate, or a particular private equity firm,justmy effort to help you read between the lines... Enjoy!
Step One:
Step One:
Wednesday, May 23, 2012
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