We need private equity, we need more of it, and we need it now, chief investment officer Ben Meng said in early 2019right before CalPERS hired a former private-equity guy, who began his career at Goldman Sachs, to head its private-equity efforts. The taxpayer handouts will also help private equity continue its relentless march through the global economy, snapping up troubled companies at bargain prices or extending high-priced credit as other investors, including hedge funds, are forced to sell off their holdings in the post-corona landscape. The allies of private equity hope that similar exemptions will soon be forthcoming for their firms.We are in a wait-and-see mode, Chris Hayes, the ILPAs senior policy counsel, told me. Driven partly by public pensions, the private-equity industry has mushroomed. Jack Ewings Faster, Higher, Farther is more than the story of a scandal. Not only should taxpayer funds not be used to pay management or consulting firms, she says, but companies that take the money should also, for instance, be required to include workers on their corporate boards and gradually increase their minimum wage to at least $15 an hour. Nocera and McLean writing book on U.S. coronavirus response By signing up you agree to our User Agreement and Privacy Policy & Cookie Statement. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. [1] In 1992 she received a B.A. Now, it has been shut off. But they wont fix its fundamental problem with profitability. So private equity is pushing to waive those rules, arguing that small firms should not be penalized for having been bought out by big investors. She has co-authored multiple bestselling books, including The Smartest Guys in the Room and All the Devils Are Here. (AP Photo/Rick Bowmer), (Rick Bowmer, Copyright 2020 The Associated Press. Bethany McLean - Contributing Editor - Vanity Fair | LinkedIn She was previously married to Christopher Roberts Wilford. Private equity has made multibillionaires of executives like Blackstones Steve Schwarzman (net worth: $17.5 billion) and Apollos Leon Black ($7.5 billion). You can see how all of this is playing out by looking at Occidental Petroleum. Dont hesitate: sign up on Patreon today. Vanity Fair may earn a portion of sales from products that are purchased through our site as part of our Affiliate Partnerships with retailers. COVID-19 Guidance for isolation and quarantine, COVID-19 Education and Outreach Materials Page. He and McLean previously worked together on All the Devils Are Here: The Hidden History of the Financial Crisis, about the 2008 market crash. Too Big to Fail, COVID-19 Edition: How Private Equity Is Winning the Copyright 2020 The Associated Press. Writer: Enron: The Smartest Guys in the Room. The active outbreak list is intended to inform the public of the current COVID-19 outbreaks in Los Angeles County. Its a rich history of a company, and a case study in how a corporate culture can turn toxic. All rights reserved. Well continue to work with the administration and Congress to request that federal programs support all businesses, regardless of ownership structure, and their workers, says the AICs CEO, Drew Maloney. Portfolio, a Penguin Random House imprint . She is known for her writing on the Enron scandal and the 2008 financial crisis. More than 100,000 people already have died in this country from the virus. By Patrick Semansky/AP Photo (Mnuchin); By Mark Wilson (Pelosi), Jason Alden (Shwarzman), Patrick T. Fallon/Bloomberg (Black), by Johannes EISELE/AFP (stocks), by Christina Horsten (tents), by John Nacion (ambulance); All from Getty Images. All thats left to tally is the damage. She has suggestions for how to approach the problem. . Portfolio, a Penguin Random House imprint, announced Wednesday that the two had reached an agreement for a news-breaking, character-driven narrative revealing the forces that rendered critical American institutions ill-equipped to cope with the deadliest pandemic since the 1918 Spanish flu and the economic consequences of that failure.. Bethany McLean Latest Articles | Vanity Fair And heres our email: letters@nytimes.com. We really need Trump to do something or hes going to lose all the energy states in this election, Mr. Sheffield told CNBC in late March. This is late 80s bad, a close observer of the industry says. Yet an exemption for the private-equity industry did not make its way into the CARES Act; according to Bloomberg, Senate Majority Leader Mitch McConnell is trying to pass a $250 billion boost to the PPPwithout provisions opening it to private-equity-backed companies. Bethany McLean. If you need help with the Public File, call 540-512-1558. Bethany McLean is a Vanity Fair contributing editor. The industry also quietly helps itself to yet more money by having portfolio companies pay fees for consulting and financing services provided by, of course, their private-equity backers. As a result, fracking stocks badly underperformed the market. Vanity Fair may earn a portion of sales from products that are purchased through our site as part of our Affiliate Partnerships with retailers. She is a writer, known for Enron: The Smartest Guys in the Room (2005), Independent Lens (1999) and PBS NewsHour (1975). Previous assignments include editor-at-large, columnist for Fortune, and a contributor to Slate . (AP Photo/Rick Bowmer), Connect with the definitive source for global and local news. 1. I dont think any of us can really believe what we saw today, one industry analyst told AP. Bethany McLean - Wikipedia To revisit this article, visit My Profile, thenView saved stories. She co-authored a book on the 2008 financial crisis titled All the Devils Are Here. Pension funds that have poured money into private equity firms may take a hit soon, too. McLean is a contributing editor at Vanity Fair and co-author of the Enron book The Smartest Guys in the Room. [1] It details how the financial crisis bubbled up from a volatile, and bipartisan, mixture of government meddling and laissez-faire. But among those angling for a federal handout is one of the wealthiest sectors of the American economy: private equity. In 2019, Mclean launched a podcast titled Making a Killing on Luminary. Investors were willing to do this only as long as oil prices, which are not under Americas control, were high and when they believed that one day, profits would materialize. If private equity suffers, the blow will reverberate throughout the entire economy. The 42 Best Romantic Comedies of All Time, The 25 Best Shows on Netflix to Watch Right Now. To keep growing, companies have to keep plowing billions back into the ground. The fear, of course, is that private equity will do what private equity does best, which is pocket the money themselves rather than devoting it to the businesses theyve invested in. As a result, private equity is now wound into the very fabric of our economy. Previous to her current roles, McLean was an editor-at-large at Fortune Magazine. Nursing home COVID-19 outbreak reported in Merced County, CA | Merced COVID-19 Origins: Investigating a "Complex and Grave Situation" Inside a Wuhan Lab. No food or drink for one hour prior to testing. Even so, he told me, a large number of private-equity firms ignored that guidance and decided to put very high levels of leverage on their portfolio companies. Maybe those firms should now be required to contribute more equity from their cash stockpiles, he suggests. Until the capital markets began to get suspicious, private equity investors could flip companies they had funded to larger, public companies, making a profitable exit regardless of whether or not the underlying business was making money. Private-equity managers won the financial crisis, as Bloomberg put it last fall. In reality, the dream was always an illusion, and its collapse was already underway. In 2018, according to analytics firm eVestment, pension funds in the U.S. and the U.K. pumped 27% of their fresh allocations of money into private-equity funds, up from 25% the year before. Ever since Congress voted to hand out $2 trillion in taxpayer money to those hardest hit by the coronavirus pandemic, American businesses have been scrambling for a piece of the action. 1 FOR PHARMACISTS PRESCRIBING PAXLOVID: This service is available in all locations, with the exception of those in New Hampshire. Then came Covid-19, and, on March 8, the sudden and vicious end to the truce between Saudi Arabia and Russia, under which both countries limited production to prop up prices. Monday - Friday Has its bubble finally burst? Fracking, they said, was just manufacturing, in which process and human intelligence could reduce costs and conquer geology. Copyright 2023 Click2Houston.com is managed by Graham Digital and published by Graham Media Group, a division of Graham Holdings. If private equity is handed billions in taxpayer money, it could use some of it to pay themselves hefty fees today, then pocket even more of it down the road, when they sell their portfolio companies and collect their 20% of the taxpayer-enabled gains. Business and Society Lecture features journalist Bethany McLean New revelations about how one Trump staffer helped preserve the transfer of powerfrom the forthcoming book on the Biden White House, COVID-19 Origins: Investigating a Complex and Grave Situation Inside a Wuhan Lab. Looking for more? [4], In 2005, McLean got into a spat with then-CEO of Overstock.com Patrick M. Byrne after she wrote a negative article about Overstock and him.[5][6]. Some of it has been packaged into so-called collateralized loan obligations, pieces of which are held by hedge funds. On March 10, the company announced that it would slash its dividend for the first time since the early 1990s, when Saddam Husseins invasion of Kuwait sent oil prices plummeting. McLean is a contributing editor at Vanity Fair and co-author of the Enron book The Smartest Guys in the Room. Nocera is a columnist for Bloomberg Opinion and co-author of Indentured, about the NCAA. Bethany McLean is a contributing editor at Vanity Fair and the author of "Saudi America: The Truth About Fracking and How It's Changing the World." The Power Law Venture Capital and the . More than 100,000 people already have died in this country from the virus. Create a Website Account - Manage notification subscriptions, save form progress and more. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. The value of West Texas Intermediate crude, a U.S. benchmark, dipped below zero for a few hourstrading as low as negative $40 a barrel. All rights reserved. Here are some tips. NEW YORK (AP) Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. Bethany McLean: The Truth about Fracking and How It's Changing - Yahoo! Bethany McLean was born on 12 December 1970 in Hibbing, Minnesota, USA. (Adila Mchich, CME Group), Fractivism: Corporate Bodies and Chemical Bonds (Sarah Ann Wylie), The Fracktivists (Colin Kinniburgh, Dissent), Kate: A Moderate Proposal: Nationalize The Fossil Fuel Industry (The New Republic), This week, Kate and Daniel talk to Bethany McLean, author most recently of, Saudi America: The Truth about Fracking and How Its Changing the World, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, If you like the episode and want to hear more, sign up as a monthly member at. There are several pots of federal money that the private-equity industry is lobbying to access. Exclusive: Inside the S--tshow That Was the Trump-Biden Transition. Bethany McLean is a . TDD: (800) 526-0844 By now, it should be abundantly clear that the current shale oil business model does not work even for the very best companies in the industry, the investment firm SailingStone Capital Partners explained in a recent note. Get COVID-19 vaccine updates from the CDC. She is also a columnist at Yahoo Finance and a contributor to CNBC. She resides in Chicago with her children. Think of private-equity firms as the banks of the corona crisis: They are, for better or worse, too big to fail. In each of the past four years, according to data-provider Preqin, private-capital managers raised over $500 billion of new money to invest. January 2022 was the month with the highest average cases, while November 2020 was the month with the highest . Its still unclear where most of this debt is held. sure to go down in history as one of the wildest business stories ever. Use of this site constitutes acceptance of our User Agreement and Privacy Policy and Cookie Statement and Your California Privacy Rights. COVID-19 Locations & Demographics - LA County Department of Public Health [12], McLean married Chris Wilford in 2000 and divorced in 2006. today. 2 FOR DRIVE-THRU TESTING RESULTS: Lab samples are sent to an off-site laboratory and results may take 1 to 2 days or even longer in some instances or in times of peak demand. Clients who show symptoms of COVID-19 (for example have a fever, cough, or difficulty breathing) and/or are waiting for their test results. Following the trail of evidence, Louisiana Senator: Our Maternal Death Rates Are Only Bad If You Count Black Women, If you correct our population for race, were not as much of an outlier as itdotherwise appear.. Best-selling author Bethany McLean reveals the true story of fracking's impact - on Wall Street, the economy, and geopolitics. As early as 2018, some investors had begun to tell companies that they wanted to see free cash flow, and that they were tired of compensation models that rewarded executives with rich paydays for increasing production, but failed to take profits into account. Joe Nocera is a journalist and column writer for Dealbook. Book review of The Power LawVenture Capital and the Making of the New All the Devils Are Here: The Hidden History of the Financial Crisis is a nonfiction book by authors Bethany McLean and Joseph Nocera about the 2008 financial crisis. It is absolutely imperative, Waters recently wrote in support of private equity, that the reliefbe extended to protect all workers, irrespective of the affiliations of their employers. Translation: Workers shouldnt suffer just because their bosses sold a controlling stake in their businesses to a bunch of greedy fat cats. The book, which she wrote from the couple's home, puts a human face to the crisis. Tar Heel, North Carolina, United States. Fueled by debt and years of easy credit, Americas energy boom is on shaky footing. The reason is as simple as it is galling: while great private fortunes, such as that of Blackstones Stephen Schwarzman (net worth: $17.5 billion and Apollos Leon Black ($7.5 billion), have been made from private equitys march through the world, its losses, to a remarkable degree, will belong to all of us. Private equity, of course, came of age in the 1980s, when greed was good and private-equity titans like KKRs Henry Kravis first burst into the limelight by taking over famed American manufacturers like RJR Nabisco. How exactly did the alleged illegal activity go down? Mortgages should be used to buy homes, not for refinancing. Ad Choices. "[3] The article noted some irregularities in Enron's financial documents that were available to the public, suggesting the company's then-record high stock price was unjustified but she did not at that point suspect fraud at Enron. The Wuhan Institute of Virology, the cutting-edge . The man who shot his girlfriend and five relatives at a birthday celebration had "control issues". Mnuchin is a former Goldman Sachs executive and hedge fund guy; Blackstones Schwarzman has ties to Trump; Jared Kushners family business has gotten loans from Apollo, according to the Washington Post. Is there any chance this could lead to prison time? Even before the COVID crisis, there were questions about how well private-equity investments were actually performing. The half decade from 2013 to 2018 saw the most private-equity deals over any five-year period in American history. The industrys lack of profits wasnt exactly a secret. Archive Wall Street Too Big to Fail, COVID-19 Edition: How Private Equity Is Winning the Coronavirus Crisis April 9, 2020 From the. She is the co-author of the 2003 book, "The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron," which was the basis for the Academy Award-nominated documentary of the same name. The man who shot his girlfriend and five relatives at a birthday celebration had "control issues". CORONAVIRUS (COVID-19) - McLean County Health, IL The True Story of the Comey Letter Debacle | Vanity Fair Months into the outbreak, no one really knows how well many of the screening tests work, and experts at top medical centers say it is time to do the studies to find out. We could also limit the deductibility of interest payments for tax purposes even more than President Donald Trumps new tax law already did, so companies arent encouraged to load up on debt. Nocera and McLean writing book on U.S. coronavirus response Free COVID-19 testing is available at the McLean County Health Department from 9 a.m. to noon every Tuesday and Wednesday in Room 400E of the MCHD building at 200 W. Front St. in Bloomington. Confirmed case data are from the Department of Public Health's communicable disease surveillance database. The Times is committed to publishing a diversity of letters to the editor. Whats more, the Milken Institute reported, even by mid-2018, private equity owned more companies than the number of businesses listed on all of the U.S. stock exchanges combined, and have accounted for a more significant source of financing than initial public offerings in many recent years. Bethany McLean. Everything You Know About Martin Shkreli Is Wrongor Is It? But that didnt seem to matter, because low interest rates facilitated private equity in another way. Regarding another ongoing Covid danger, that of reinfections, a virologist sets the record straight: There has yet to be a variant that negates the benefits of vaccines.. And North American oil and gas drillers have almost $100 billion of debt that is set to mature in the next four years. This material may not be published, broadcast, rewritten or redistributed without permission. Beleaguered pension funds, which suffered big losses in the financial crisis, could no longer count on decent returns from fixed investments, given how low interest rates have been kept by the Fed. Like so many other facets of the COVID-19 crisis, however, this unprecedented crash exposed long-running cracks in the facade. Nocera is a columnist for Bloomberg Opinion and co-author of Indentured, about the NCAA. By Bethany McLean Coronavirus May Kill Our Fracking Fever Dream America's energy independence was an illusion created by cheap debt. Contents 1 Early life and education 2 Career