AS IT HAPPENED, 2007 WAS THE YEAR David Rubenstein, in a manner of speaking, also went public. He bought a copy of the Magna Carta for $21.3 million, lending it for display to the National Archives, with his name prominently attached. He did something similar with copies of the Declaration of Independence, the Constitution, and the Emancipation Proclamation. This brazen quest for reputational laundering eventually brought us together in CNN’s studios.
Roughly speaking, the political history of the Euro-American world we live in has a plot: the steady but uneven expansion of the rights of people who are not kings to shape their own lives, and the struggles of kings and their vassals to keep us from being able to do so. The Magna Carta was a tiny but significant step in that direction. The charter established that even kings were subject to limits on their powers and their subjects were entitled to rights, even if the good guys in this particular story were barons. The Declaration of Independence asserted the rights of American colonials to sever ties with their king, appending something between a statement and an ideal about all men being created equal—even if the good guys in this story were only property-owning white men, with the Emancipation Proclamation repairing part of the oversight.
Waxing rights, waning tyranny: David Rubenstein pays tens of millions of dollars to pose for selfies with that saga’s heroes. Even as, in the present-day chapter, he and his are actually the story’s bad guys—at the cutting edge of stopping any future advances in human liberty, dignity, and equal rights, clawing back those that already exist.
Every time I read something that clearly explains how our lords of private equity play the game of “loading up a company with debt” as prelude to stripping what someone else has built for parts, I’m astonished anew. I can’t get over how a PE firm borrows money to buy a company, and that company, not Carlyle, has to pay it back—and that Carlyle gets paid to make them pay it back, in dividends and “management fees.” It’s hardly less surreal than the notion of the king personally possessing every whale and sturgeon in the kingdom for his own pleasure.
Matt Stoller describes private equity as a “political movement,” and I find that designation brilliant. Especially now, with Carlyle leading the industry into looting a basic human need, profiting from buying up vast tracts of apartment buildings that once had responsive landlords, and putting them under the control of faraway management firms that are not.
Private equity, in short, is one of our most world-changing institutions. But here’s Rubenstein’s neatest trick: In the spaces where super-elites gather to discuss public questions, he has figured out a way to prevent discussion of PE’s very existence. This he manages by leading those discussions. And the elites let him do it. In fact, they can’t get enough of the guy.