Tuesday, June 10, 2008
Apparently Mr. Black does not know that KKR's financiers are often pension funds, as Fortune magazine pointed out a few years ago:
From the beginning, KKR's key investors-bound to the firm with almost religious devotion-have been the investment arms of two states, Washington and Oregon. Both figure their annual returns from KKR over the years to have exceeded 16%, which they think both entirely satisfactory and a reason for them to dig deeply when KKR periodically brings its collection plate around. Their latest act of fealty occurred early in this decade as KKR worked to raise what came to be called its Millennium fund and ran into two problems: first, resistance from investors because of KKR's recent spotty record, and second, the fierce blow of 9/11. In the end Oregon stepped in with an unprecedented investment of $1 billion, and Washington topped that with $1.5 billion. So of the $6 billion fund KKR raised, two investors amazingly account for just over 40% of its dollars. No problem, says Joseph Dear, executive director of Washington's investment board: "KKR has a demonstrated capacity to show good returns."Those investment returns go to government retirees, many of whom worked for AFSCME or some other union. Funny how Mr. Black missed that one. They've done it for private firms they've bought as well.
As WSJ's Wealth Report notes, the Democrats seem convinced that crusading against the "rich" is profitable for them. How far will Team Obama push this? In today's Political Diary, Stephen Moore writes that if you make "the rich" just those families earning over $250,000, the revenue gain of letting the Bush tax cuts expire on them is only $40 billion a year, about 10% of what the Obama proposals would cost. The main source of revenue would be to let the cap on Social Security taxes move up sharply on those earning between $100k-$200k. Many of those family members watch Comedy Central ... or used to.