On Sunday January 22, 2012, Fareed Zakaria interviewed David Rubenstein, a founder of the Carlyle Group, a private equity firm, on his program GPS on CNN. The Carlyle Group is a larger version of Bain Capital and Fareed’s interview was designed to explain what private equity firms do. Essentially, they restructure companies for a profit for themselves and their wealthy investors. David Rubenstein has done well for himself having an estimated net worth of approximately $2.6 billion. Private equity firms were formerly known as leveraged buy-out companies, a term that fell into disfavor.
Rubenstein talked about his charitable giving. He has purchased several copies of founding documents and put them on public display. One copy even hangs in the Oval Office of the White House. He also donated money to repair the Washington Monument. Personally, I believe that these gifts, while praiseworthy, should be paid for by our government out of tax revenues. If tax revenues are insufficient, then tax rates on the wealthy and the very wealthy like Rubenstein should be increased.
In closing Fareed asked him about his concerns. As almost all wealthy persons, he is concerned about the deficit and the national debt. That is because the wealthy want to preserve the value of their financial assets against the effects of possible inflation. The US Federal Reserve has two opposing responsibilities, preserve the value of the dollar and keep unemployment low. The Federal reserve usually listens to the 1% and leans toward preserving the value of dollar instead of keeping unemployment low. Rubenstein and other members of the 1% are not concerned about unemployment for themselves.
- KA-CHING! Each Of Carlyle Group’s Founders Got Paid $137.8 Million Last Year (businessinsider.com)
- Carlyle Group, Bain Capital, And The Tax Treatment Of ‘The Carry’ (forbes.com)
- Carlyle founders scoop $402m from private equity investments (telegraph.co.uk)