Posted on 12/16/2019 5:20:33 AM PST by karpov
In her continuing effort to punish success, Sen. Elizabeth Warren is going after an important piece of America’s thriving economy: the private-equity industry. Her subtly titled Stop Wall Street Looting Act would put private-equity investors in a legal category separate from other investors, severely limiting the legal protections available to them and diminishing their incentive to take risks and invest.
Ms. Warren’s legislation would hold private-equity firms, but not other investors, responsible for the liabilities of the companies in which they invest, “including debt, legal judgments and pension-related obligations.” No other shareholders in the U.S. have to take on such liabilities. This excessive legal and financial exposure would dramatically reduce the incentive for firms to invest in struggling businesses. Ms. Warren would additionally ban dividends for two years after a private-equity firm buys a company, forcing the firms to tie up their investors’ funds for longer and reducing their returns.
The senator is trying to set private equity up as a boogeyman to fear. Nothing could be further from the truth. Private equity is an overwhelmingly positive component of the free-enterprise system. It generates value for investors while creating jobs and wealth for a broad spectrum of individuals and entities.
...
Ms. Warren’s private-equity plan is like all her other schemes—likely to hurt the people she claims to be helping. The U.S. Chamber of Commerce assessed the plan in November, and as part of its background research, it found that returns from private-equity firms “typically outperform other investments.” As a result, approximately 60% of private-equity investors are employee pension funds, foundations and university endowments. Pension funds alone have at least $149 billion invested with private equity, and would lose as much as $3.4 billion annually if they had to switch to lower-yield investments.
(Excerpt) Read more at wsj.com ...
I’m sure those private firms contribute to Democrats so be careful who you stand up for.
cancelled my subscription to that anti-Trump rag in 2015 when they went full on against Trump.
She would not stop at that. Her next target would be all that makes up Capitalism. She would go for full government ownership of the means of production, communism.
Private equity firms have ruined many viable companies. They are also noted for outsourcing pension plans to the US government, jobs overseas, loading companies with massive loads of debt while stripping assets for the benefit of the private equity partners. Look at the long slow death of Sears and Kmart to see what private equity milking and eviscerating does to viable companies.
The answer to private equity is simple. Eliminate the carried interest tax benefit. Make private equity partners pay normal tax rates on their income from their private equity “investments” rather than giving that income preferential treatment. Why should Tom Steyer, Mitt Romney, George Soros, and thousands of Wall Street bankers receive inordinate tax benefits on the money they strip from firms they buy with debt, and very little of their own capital?
Yeah from what I can see well over 50% of Americans have come to hate and loathe them. Proposing their destruction looks like a political winner. More fallout from the flailing 2012 Romney campaign. He took the head shots and his industry is going to get the brain hemorrhage.
Like the liberals in pre war Germany. Their stupidity cost them their freedom. And their lives.
Here is my simple solution. I think it’s great that she wants responsibility. Let’s start in the government sector with my “Three Strikes and you are OUT” act. It’s really simple. If you vote for three bills that are 10% or more over budget, you are immediately to step down from Congress and never hold public office again.
I think three strikes and 10% is very generous. Now, this might mean you will have to READ the laws before signing them, and you might have to ensure that the true numbers and the true cost is shared with the American people....
I also have a similar suggestion for journalists and mis-reporting, but I’ll save that for another day.
PS: As a corollary, 90% of all speaking fees, book signings, ... that you get when you milk your public service credentials are to be given to the US government to pay off the national debt (you know, what you ran up so you could make millions in fees later).
Warren or any Democrat would do that.
The party has been taken over by the CPUSA.
Difference now is that they feel comfortable enough to take off the masks.
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