Is that the flavorful grease of a succulent goose I see dripping down the face of Stephen A. Schwarzman, the "boldly going where no private equity fund has gone before" head of the Blackstone Group?
He had to eat the whole thing, taking his firm public in a manner both ostentatious and foul, all in a bid, I assume, to accummulate the capital necessary to pursue deals big enough to make his competitors feel a bit inadequate.
Certainly this is not merely about money--personal money--as most private equity firms and hedge funds provide ample reward, and out of the site of the salivating jaws of congressmen and those with inclinations toward envy or conspiracy. (And we all know that type, who insist that every lawyer, politician, teacher, cop, wealthy person, or anyone remotely better off, more productive, or happy is part of a vast conspiratorial force that bends corners to achieve ends that will ultimately lead to... well, goodness knows what).
The problem-and there is one-is that this was a deal that need not be made, resulting in short term gain and the type of close government scrutiny that will inevitably put the kibosh on taking advantage of that new public status. Every now and again moneyed types on the Upper East Coast manage to forget that power in the form of your local Washington Congressman can beat the dickens out of your wad (of cash).
And Friday it came, with Dems lining up to sock it to firms by converting carried interest taxed as capital gains (15%) into income taxed at rates (35%) beneficial not to government coffers necessarily, but to political campaigns.
Despite this, Schwarzman has spent a more than a prudent amount of time doing a happy dance with a bullseye mask on his face, and one can hardly believe that Kohlberg, Kravis, Roberts is going to join in this dance.
Then again, these masked men are smart, and perhaps the dance is a safety dance, and during a peak in the market, they are selling? Perhaps we are all thinking expansion, or bigger deals, when they are thinking the hustle is done and it's time for a rest.
Or do they believe the new status and access to extra cash will let them go after ever larger quarry? Maybe putting a bid on the United States itself? Buying all the U.S. debt in the hands of Chinese and others, taking America private, kicking out the citizens, and selling off the states piece by piece to countries looking for additional real estate. Japan salivates, Monaco drools, Mexico dreams of empire.
Really. What is the point, and was it particularly well thought out? It is hard to determine who will benefit the most from this turn of events: Washington, the firm owners, or the new investors. I tend to doubt anyone benefits.
I am betting having that fat goose in the quiet of your corner of Connecticut, and without consideration of third parties, will prove infinitely more rewarding. I don't at all underestimate the likelihood of Washington reaching down Schwarzman's throat to retrieve a perceived golden egg.
Oh Steven, sixty going on six, fatboy with goose on your face. Look what you have done.
