Thursday, May 17, 2007
For those who want more on the House Committee on Financial Services Hearing on Private Equity's Effects on Workers and Firms, you can view round-ups at Marketwatch, the N.Y. Times Deal Book, and Wall Street Journal as well as watch the archived webcast through this link. The hearings were pretty much a non-event, noteworthy mostly for its political posturing with the Democrats, led by Committee Chairman Rep. Barney Frank, D-Mass., taking the con side and the Republicans trumpeting private equity's virtues. It doesn't appear that any action is imminent at this time, but at least there were some good quotes that came out of it. My two favorite (the first as told by Deal Book):
1. Andy Stern, the president of the Service Employees International Union, testified that “the concentration of wealth in the hands of the top one percent of Americans” is a problem for which the private equity industry is partly responsible. At one point, Texas Republican House member Jeb Hensarling asked Mr. Stern: “Does the janitor who cleans your office make the same income as you do?” “No sir,” Mr. Stern responded, looking bemused by the question.
NB. Stern has issued a press release extolling his testimony.
2. Dunkin' Brands Inc. CEO Jon Luther used phraseology worthy of Ayn Rand to assert that the acquisition of the company by Bain Capital LLC, Carlyle Group L.P. and Thomas H. Lee Co. had "liberated" it to focus on long-term goals and gain access to low-cost financing. Of course, he stated, this has now permitted them to expand and boost employment helping all workers.