Thursday, February 21, 2013

Peter G. Peterson Is A Horrible Person

The man's boundless, rapacious greed is astounding. No matter how
much he has, he always wants more, and his life's goal is to pillage
Social Security. It's not enough for him to wallow in Scrooge
McDuck-like treasure vaults. He will not rest until the rest of us
have nothing.

"Now Peterson wants to loot Social Security. For decades he has warned
of a "Pearl Harbor scenario" in which spending on Social Security and
Medicare causes an epic economic meltdown. Fix the Debt is only his
latest project pushing the message that the deficit poses a
"catastrophic threat," and the media have been content to echo his
warnings. But people should know better than to be frightened by this
chorus of calamity. Peterson is no master of prediction when it comes
to economic crises. When an actual threat to the economy—the $8
trillion housing bubble— loomed ominously overhead, Peterson said
nothing, even as credit markets froze, subprime lenders filed for
bankruptcy and economists like Dean Baker shouted from the rooftops.

The housing crisis provides a good window into the way Peterson
operates. In 2007, Blackstone owned the Financial Guaranty Insurance
Company, the world's fourth-largest insurer, which had branched out
from municipal bonds into home-equity securities and subprime mortgage
debt. FGIC went belly up in 2010, but by that time Peterson had sold
most of his shares in a Blackstone IPO that netted $4 billion. Again,
Peterson left oth- ers holding the bag. The AFL-CIO had warned the
Securities and Exchange Commission that the Blackstone IPO was riddled
with problems: the firm was structuring itself to avoid regulation and
its real assets and values were unknown. Perhaps Chris Cox, George W.
Bush's man at the SEC, should have listened. A year later,
Blackstone's value had dropped 40 percent. Today, it is trading at $18
a share, showing no signs of the recovery that other Wall Street firms
have enjoyed.

Blackstone shareholders may have been miffed, but Peterson walked away
with $2 billion (on top of the fortune he already made from the
carried interest tax loophole, which allows fund managers to be taxed
at 15 percent rather than the standard 35 percent)—and pledged to
spend half of that to convince Americans they have to take a harsher
route to prosperity."

This kind of greed is unfathomable to me.

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