By Jim Hightower
Author, Commentator, America’s Number One Populist
Executives in private equity firms – such as Mitt Romney of Bain Capital and Henry Kravis of Kohlberg Kravis Roberts – tend to be peacocks who think quite highly of themselves.
Fanning their splendid tail feathers, they unabashedly claim to be the ultimate free-enterprise risk takers – worth every dime of the multimillion-dollar paychecks they award themselves each year. Excuse me, but the risks taken by these self-anointed “heroes of the market” are done with other people’s money, not their own. But here’s a revelation that really ruffles their feathers: They appear to have been gathering their riches not with bold competition, but with old-fashioned collusion.
An antitrust civil lawsuit filed in federal court against 11 of the biggest equity firms includes emails in which they agree not to compete. In 2006, for example. The head of Blackstone sent an email to the co-founder of KKR: “We would much rather work with you guys than against you. Together we can be unstoppable but in opposition we can cost each other a lot of money.” The KKR honcho happily emailed back a one-word response: “Agreed.”
Collusion, of course, perverts the marketplace they pretend to worship, artificially lowering the market price they’d otherwise pay. In the 2008 take-over of the giant HCA hospital chain, for example, KKR expressly asked its market rivals “to step down on HCA” and not bid. Agreeing to this blatantly illegal collusion, one rival wrote in an email: “All we can do is do unto others as we want them to do unto us.”
Of course, by cozying up with each other, they’re really doing it unto you and me. The equity outfits even have an insider term for their mutual back scratching: “Club deals” they call them. Forget about the vaunted free market – when the big boys want to profiteer, they keep it inside the billionaires club.
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National radio commentator, writer, public speaker, and author of the book, Swim Against The Current: Even A Dead Fish Can Go With The Flow, Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be – consumers, working families, environmentalists, small businesses, and just-plain-folks. Twice elected Texas Agriculture Commissioner, Hightower believes that the true political spectrum is not right to left but top to bottom, and he has become a leading national voice for the 80 percent of the public who no longer find themselves within shouting distance of the Washington and Wall Street powers at the top. He publishes a populist political newsletter, “The Hightower Lowdown.” He is a New York Times best-selling author, and has written seven books including, Thieves In High Places: They’ve Stolen Our Country And It’s Time To Take It Back; If the Gods Had Meant Us To Vote They Would Have Given Us Candidates; and There’s Nothing In the Middle Of the Road But Yellow Stripes and Dead Armadillos. His newspaper column is distributed nationally by Creators Syndicate.
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This piece was first published on Jim Hightower’s website.
Posted November 20, 2012 at 8:00 am, in Allied Approaches, From Jim Hightower
