Sold!

I saw that a publicly traded company I used to work for had been bought by one of the more Aryan private equity groups. I had mixed feelings. Big companies are sort of cool in that they are democratic, but they tend to be retarded for much the same reason. While I was still thinking about this, I noticed that my old company's biggest competitor (one of them, anyway) was going through the exact same thing. Another Death-Star sized ball of money sucking in a company in a dysfunctional sector. Then the company that bought my former company decided, hey, what the hell, and started buying other competitors in the sector.

What the hell?, I asked myself, and I did not have to wait long for the answer. "2007: THE YEAR OF PRIVATE EQUITY!!!", screamed at least five newspapers. I was seeing firsthand the tinest fjord of the 2007 Private Money Flood. While the transfer going on in my old company doubtlessly was taking place for the most innocent of reasons, the drama of boardroom money in general has been going on for some time.

It's an old story now. Public company with a fantastic deal of assets gets bought by private firm with a fantastic deal of cash. Perhaps said public company has not had the most honest of boards, and the stockholders will not say no to millions of dollars of clean private money. Voila, instant new ownership and transition from public to private. The shareholders call it a day and the executives crawl back into whatever hole they came from, preferably in a directorship of HBS buddies. Meanwhile the private firm sits down to figure out what kind of "fantastic" assets they just acquired.

This is easier than it sounds because, really, no publicly traded company has a transparent, honest board. They're not set up to be honest, transparent, or even to maximize the profits of the shareholders. For the past twenty years the average board has had the singular goal of raping as much money out of the company as humanly possible. Those huge salaries you always read about are sustained by a consummate kleptocracy that is magnificently free from any type of oversight, be it from workers, shareholders, or the government. No executive would dare call attention to this magnificent machine for fear of clogging up its pendulous money tit.

Shareholders were more or less satisfied with this arrangement so long as they got added value from their overpaid CEO monkeys. The shareholder was especially satisfied if he or she was a mutual fund manager, because then you could pretty much guzzle whatever fees you wanted without anyone asking questions. In the sweet fevered dawn of the 401k era, you weren't dealing with a sharp Grieco-style Wall Street wanker- you were dealing with Gramma, who doesn't know active management from a runny colon . Worse yet, there's no rule saying you can't take money from a company while managing a fund that has that company's stock in it. Ho ho ho. What do YOU want to be when you grow up, little boy? Why, I'd like to funnel Gramma's money while talking up Enron stock, grandpa.

So between the fund managers and the board members waiting to be executives, American stockholders and employees became accustomed to that huge thing in their ass. Trickle down indeed.

But nothing gold can last. Nothing like a seizure in the money supply to wake people the hell up. In the midst of inflationary pressures and imaginary capitalization, it's clear that the cash sums given to leadership superstars are not reflected in value. The townsfolk have rounded up with pitchforks and torches around the laboratory of the mutual fund manager, led by folks like Fidelity and Vanguard. The managers in the private firms are pissed the hell off, wondering exactly what these people have been doing for, oh, sixty years.

SO we can't really blame the shareholder who thinks, sincerely, screw this: just give me my cash so I can put it in a Chinese utility, ideally before the whole goddamn thing is revalued by someone who isn't some combination of incompetent, corrupt, or drunk.