If you look at our economy from 30,000 feet, it’s easy to believe President Donald Trump’s boasts that we’re living in boom times. But if you get closer to the ground, where too many good jobs are being replaced by precarious ones, where large-scale employers waver at the brink of going under, and where the faux boom’s profits are overwhelmingly going to the wealthy, you can see a practice escalating across the economy, a practice that has already had disastrous effects on workers generally and a practice with the potential to take down hundreds of thousands more jobs and put investors and consumers alike in jeopardy. That practice is the unchecked and reckless overuse of heavy burdens of debt, and then of bankruptcy laws, by some private equity (PE) firms and hedge funds to the overwhelming detriment of employees and retirees.

That’s why we all need to pay attention to a new bill introduced this week by Sen. Elizabeth Warren and other members of Congress that would curtail the threat financial predators pose and remove the incentives for them to further harm our economy. It would also eliminate a tax abuse I have written against several times and one that Trump even campaigned he would eliminate, namely, the so-called carried interest loophole.

...Today, too many PE fund managers are generalists, with little or no experience in the industry they’re investing in. And we’re seeing them use a much-discredited playbook: cut costs, take out cash for their own short-term benefit, add little genuine competitive value, and then slash jobs and worker benefits in a desperate bid for greater operating cash flow. This is why this week’s legislation matters so much. The aptly-named Stop Wall Street Looting Act would finally hold predatory private equity firms and hedge funds liable for the damage they cause, close tax loopholes that encourage excessive debt and let executives avoid paying their fair share of taxes, and limit the debt that predatory firms can access to seize control of companies. And, tremendously importantly, the bill would protect workers when employers go bankrupt, giving them added recourse to pursue the severance that is currently denied them.

...Private equity isn’t going away, nor should it, as in the right hands and with the right target company, it can bring great value to investors and employees alike. Now, some will say that the proposed bill will hurt PE and in turn, hurt economic growth. It won’t, and in fact it will only improve the sector as appropriate balance is restored among PE managers and investors and employees...But one thing’s for sure: If we don’t act, nothing will change. There are simply too many incentives in place today for reckless and often immoral behavior by some PE investors. So, let’s enact the Stop Wall Street Looting Act before even more damage is done.

More at https://fortune.com/2019/07/22/elizabeth-warren-private-equity-bill/

...I took out an oversize I’M A WARREN DEMOCRAT button that her campaign has been handing out at events and put it on the table. What does she think that phrase means? “Oh, it means you’re somebody who is willing to get in the fight for an America that doesn’t just work for the rich and the powerful but works for everybody else. And it’s both halves of that. It’s both what you’re fighting for, and it’s about a fight,” Warren told me, sounding about as off the cuff as she gets.

At least for now, no other campaign is trying this message. There’s no Kamala Harris Democrat. No Cory Booker Democrat. No Pete Buttigieg Democrat, Jay Inslee Democrat, Beto O’Rourke Democrat, Amy Klobuchar Democrat. From the moment he entered the race, former Vice President Joe Biden has stressed, and does so every time he finds the slightest opening to squeeze it in, that he is “an Obama-Biden Democrat.” When I brought that last one up to Warren, she rolled her eyes twice and slightly tilted her head to catch up with them, a sort of silent Uh-huh and What else ya got?

Warren said she’s not here to criticize other Democrats, but she made a point that many have made about Biden: It’s hard to move people’s hearts, or their feet to the polls, with lines like “I think I have the most far-reaching plan that’s in reach,” as he described his climate-change plan in New Hampshire last week. “Some people think small change, incremental change, is how we will move America in a better direction; I think big change is easier,” Warren told me, ticking through some of her biggest proposals, from universal child care to canceling student debt. If put into place, they would make for the biggest active restructuring of the American economy in history. “It’s easier to get more people into the fight, and it’s easier to get more people to pay attention to how it would touch their lives. And that’s our path to winning. So this is the ‘Ask for big or ask for little.’ Ask for big!”

...Elizabeth Lindquist, a 51-year-old oncology pharmacist, poured her heart out to Warren on the photo line about a friend who wishes Warren would stop using the term special needs. The senator didn’t quite give the answer Lindquist wanted, but she was still swooning. I asked her about her i’m a warren democrat tank top. “It means I’m not a conservative Democrat, I’m not a corporate Democrat,” she told me, deciding she was going to say the next part too. “And it also means that I’m a Democrat—as opposed to the candidate I organized for in four states in 2016 … and … I wish hadn’t run this time.”

...Warren is tapping into something distinctly 2020 in the Democratic electorate: frustration with the system, deepened by Trump, yet also an exhaustion with big talk, and suspicion of more chaos that could follow from another revolution, like the one Sanders is demanding. People may want to burn down the building, but they want to see the blueprints for what comes next. “It’s the planning and the ability to explain it and get things across,” Ben Silver, a 29-year-old, told me after Warren’s town hall in Peterborough. “It’s about telling people exactly what I believe is broken and what we can do to fix it,” Warren explained to reporters a few minutes later. “The No. 1 thing I hear afterwards when people come through to do selfies is, ‘This gives me hope.’ Hope because it really is a path forward. It’s not pretend; it’s not hand-waving.”

...Warren knows she’s an odd fit for a movement leader. “The difference now is, I see the path,” she told me. “I am an unexpected person to lead this movement. But I know that it’s right.”

More at https://www.theatlantic.com/politics/archive/2019/07/warren-democrat-2020/594430/

Private equity leaders are pushing back sharply against a new plan from Sen. Elizabeth Warren (D-Mass.) to rewrite the basic rules of the road for firms she likened to "vampires."...Warren, who honed her brand as a Wall Street scourge, insists drastic change is needed: Unveiling the "Stop Wall Street Looting Act" yesterday, she said that the private equity industry is “the poster child for financial firms that suck value out of the economy."

“Private equity firms raise money from investors, kick in a little of their own, and then borrow tons more to buy other companies,” she wrote in a Medium post. “Sometimes the companies do well. But far too often, the private equity firms are like vampires — bleeding the company dry and walking away enriched even as the company succumbs.”

The plan's most disruptive change would make firms responsible for both the employee pensions and debt obligations of the companies they buy while tying their profits to the companies’ performances. As The Washington Post’s Peter Whoriskey notes, private equity firms frequently load up their takeover targets with debt, which become a burden the companies have to carry, sometimes precipitating bankruptcies. This was perhaps most famously the case with Toys R Us, which crumpled under the $5 billion debt burden that Bain Capital, Kohlberg Kravis Roberts, and Vornado Realty Trust saddled it with after acquiring the toy retailer in 2005.

...Investors appear to be taking the threat seriously. Publicly traded private equity giants saw their stock prices tumble on the news of the proposal. Apollo Global Management dipped nearly 2 percent; the Carlyle Group was off by 1.73 percent midmorning before paring losses to close down .76 percent.

...Warren's bill — which is cosponsored by fellow 2020 contender Sen. Kirsten Gillibrand (D-N.Y.) and a handful of other Democrats in both chambers — would tax private equity gains as ordinary income. The measure would also scotch the ability of private equity executives to pay themselves monitoring fees; change bankruptcy rules to limit benefits to executives and protect them for workers; and force executives to make their fees and returns public.

https://twitter.com/danprimack/status/1151915869682982912

More at https://www.washingtonpost.com/news/powerpost/paloma/the-finance-202/2019/07/19/the-finance-202-elizabeth-warren-s-pitch-to-upend-private-equity-rattles-industry/5d30f77e1ad2e5592fc35a0a/?utm_term=.c56dba9ec303

...this bill is as dead as Kelsey's nuts in the Senate and everybody knows it. Mitch McConnell will not even allow it to come to a vote. And this whole ball-spiking in the House strikes me as peculiar. After all, the Democratic House leadership won't even swing for an impeachment inquiry at least in part because it never would result in a conviction in the Senate. But this bill, which has no more chances of passing through the Senate than an impeachment would, is an occasion for chest-pounding.

And, of course, there was resistance among the only Democrats in the House that seem to matter. They got courted. They got their hands held. They didn't get snotty remarks aimed at them through the moth-eaten cultural references of Maureen Dowd.

Still, Democratic moderates — especially those who represent districts carried by President Trump — were nervous about the measure, and it took champions of the bill months to bring them around. In the end, the sponsors tacked on two provisions: one authorizing a study of the measure’s effects after it has been in place for two years, and another extending the deadline for a $15 minimum wage from 2024 to 2025.

In other words, to win over the only Democrats who matter, the leadership had to set the bill's effective date for six years from now, and they had to authorize a study two years after that. If any progressive congresscritter had tried that kind of a hold-up, the howls from the leadership and from sensible liberal pundits wouldn't have yet died away. Six Democrats voted against it anyway. They will pay no political price. Because they matter.

https://www.esquire.com/news-politics/politics/a28437132/democrats-minimum-wage-bill-impeachment-house/

Democratic presidential contender Pete Buttigieg has hired a former Goldman Sachs vice president and Google executive to run his policy shop, his campaign announced Thursday. Sonal Shah, now executive director of the Beeck Center for Social Impact and Innovation at Georgetown University, will be the campaign’s national policy director. Shah worked at Goldman Sachs from 2004 to 2007 as a vice president, according to her LinkedIn page. She then worked for Google as its head of global development initiatives from 2007 to 2009.

...In a statement, Buttigieg’s national press secretary, Chris Meagher, said that while at Goldman, Shah “wasn’t involved in any deals nor did she benefit from any deals.”

“She developed and managed Goldman Sachs’ environmental strategy. She trained bankers to ask environmental questions, managed the grants to non-profits, and worked with their real estate team on how to build more green buildings,” he said.

...In early 2017, Shah cheered President Donald Trump’s hiring of Goldman executive Dina Powell, first as an economic assistant and later as deputy national security adviser.

“Great choice. Dina Powell will be great. Trump hires another executive from Goldman Sachs,” Shah wrote in a Twitter post.

https://twitter.com/SonalRShah/status/819936090245177344

More at https://www.cnbc.com/2019/07/18/buttigieg-hires-former-goldman-sachs-executive-as-policy-director.html

Earlier this week, the Edmund Burke Foundation, a new conservative think tank, held its debut conference in Washington. I spent two days poking in and out of it, listening to everything from University of Pennsylvania law professor Amy Wax rant about immigrants to Sen. Josh Hawley (R-Mo.) call for an end to elites who prize their own economic gains ahead of that of the American middle class. One subject — or should I say name — that came up not infrequently was Sen. Elizabeth Warren (D-Mass).

And, no, not all of the mentions were negative.

Warren’s overarching theme is that American capitalism, in its current form, runs roughshod over Americans workers, families and communities. That resonates in certain conservative circles, where people like to view themselves as defenders of traditional values. During the conference, one attendee asked Tucker Carlson, who spoke at a Monday keynote, if Warren could be a potential ally. That’s likely because last month, Carlson declared Warren’s “Plan for Economic Patriotism,” which argues for a government investment in green energies and an economic policy to encourage American exports, to be something that “sounds like Donald Trump at his best.” Carlson, if you are wondering, said no but added that he considered Warren’s book “The Two-Income Trap” one of the best books on economics he’s ever read.

...Warren’s plan would crack down on a host of practices that make private equity strip mining as lucrative as it is, eliminating many of the economic incentives for it. She would demand private equity companies share in the risks of their purchase, by making them partially responsible for the debt they would otherwise load on the hapless companies they control. If one of the firms they own makes a decision that harms consumers, courts could find them liable, something that is not true now. Warren’s bill would also ban the purchased company from paying dividends to investors for two years past the leveraged buyout, cutting into immediate profits. Should the company land in bankruptcy court, she would double the amount due to employees in owed wages and severance that is placed before the interests of the bondholders, something that would make a filing less lucrative to private equity. And ever the personal finance guru, she’s even onto how company’s skip out on their obligations to consumers possessing their gift cards. She’s demanding they receive more protection in bankruptcy court than they currently do, too. And while she’s at it, she’s demanding an end to the carried interest loophole, the tax dodge beloved by hedge fund managers and private equity investors alike.

None of this is likely to go anywhere in the current environment. Republicans control the Senate, and it’s not even clear how many Democrats will support it. The lure of private equity is, alas, bipartisan. But what Warren’s bill does do is highlight a certain hypocrisy. If you are a Democrat, it makes it harder for you to claim you are a progressive because you support raising the minimum wage and decriminalizing illegally entering the country if you cannot address the blight that is private equity. And it calls people such as Tucker Carlson and other attendees at the Burke Foundation event on their own stated values. If you want to help American families, you need to attack all the financial practices that are harming them, not just the ones that Trump thinks are damaging. At least one person at that conference got the exact nature of Warren’s threat to the right wing. Silicon Valley mogul Peter Thiel, another speaker at the event, joined Carlson on his nightly Fox News television show Monday night. “I’m most scared by Elizabeth Warren,” he told Carlson when asked about the Democratic presidential field. “I think she’s the one who’s actually talking about the economy.”

More at https://www.washingtonpost.com/opinions/2019/07/18/warrens-latest-plan-highlights-economic-hypocrisy-both-sides/?utm_term=.b8690f95bf23

When Elizabeth Warren came to Washington — not the first time, as a bankruptcy expert, or the second time, to oversee the bank bailout during the Great Recession — but the third time, when she was elected to the United States Senate, she wanted to solve a growing problem: student debt.

During her campaign, against Sen. Scott Brown (R-Mass.), Warren had talked a lot about student loan debt and making college more affordable. She had run television ads about it, saying young people were “left drowning in debt to get an education.” So, as her Senate office began to staff up, the boss wanted to roll out a policy proposal to bring down the cost of student loans. Her staff did what they always did when working for Warren: They looked for the best existing plans and the best data to show her the root causes of the problem. What they found was lacking.

There were plenty of policy experts on K-12 education, but relatively few were focused on higher education, and even fewer were focused on student loans. The number of ideas floating around to fix the problem was minuscule.

Policy development in Washington normally runs through think tanks. Think tanks need to raise money for policy programs. But since there was no money devoted to developing a policy to relieve student loan debt, there were relatively few experts in Washington on the issue at the time. So Warren hired a top academic expert to develop student loan debt relief policy on her staff.

In the seven years since, Warren has become the most active politician in America when it comes to investigating, transforming and eliminating student debt. As the problem has grown, her proposed solutions grew. She started by fighting to lower interest rates and pushing the Obama administration to investigate for-profit colleges with high default rates, and she slowly reached the point where it was time to push for the near-total elimination of student debt. This is how Warren has pushed the boundaries of progressive policy since coming to Washington. Instead of relying on the traditional D.C. think tank world, she made her office into her very own think tank. This vast, over-qualified policy team then consulted with a kitchen cabinet of legal academics, economists and other scholars outside the Beltway. Her goal all along has been to craft and sell policies to help solve one overarching problem: inequality in American society.

More at https://www.huffpost.com/entry/elizabeth-warren-has-a-plan-for-that_n_5d279e9ee4b0060b11e9a22e

-On the Friday that Warren called for impeachment proceedings, she raised almost $94,000 in a single day from donations greater than $200. The next day, she pulled in more than $105,000.

-April 22: $114,000 -- Warren releases major student loan debt cancellation plan and participates in CNN town hall

-May 28 and 29: $116,000 and $109,000 -- Reproductive rights was already making national headlines, and Warren had already released a plan to protect access to abortion earlier in the month. On May 28, she tweeted about the potential closure of Missouri's last abortion clinic

-May 31: $106,000 -- The day before, Warren appeared on "The View," where she unveiled a universal childcare calculator

-June 26: $157,000 -- Warren made a last-minute decision to visit the Homestead migrant detention facility in South Florida, hours before she took the stage at the first Democratic debate.

-June 27: $166,000 -- Day after her debate appearance

https://www.cnn.com/2019/07/16/politics/elizabeth-warren-2nd-quarter-fundraising-takeaways/index.html