For the Price Paid For a Painting by a Twinkie’s Investor, You Could Stack Twinkies End-To-End From New York to LA and Back
The words “corporate greed” have rolled off the tongues of Americans often, ever since the first corporation, “Corporation of Harvard College” was founded in 1650.
The purpose or object of corporations haven’t changed much since the 1650’s– pool other people’s money to make the corporation more money.
For the most part, these business entities are held in check by controls and regulations, but not always. Where there’s a will, there’s a way. Enter the greedy, filthy rich, opportunists.
As Bernie Sanders correctly noted: “Meanwhile, the wealthiest people and the largest corporations are doing phenomenally well. Today, 99 percent of all new income is going to the top 1 percent, while the top one-tenth of 1 percent own almost as much wealth as the bottom 40 percent. In the last two years, the wealthiest 14 people in this country increased their wealth by $157 billion. That increase is more than is owned by the bottom 130 million Americans — combined.”
Although corporations are regulated more than they were centuries ago, slippery operators are figuring ways to circumvent the rules and fly under the radar of regulatory watchdogs.
A great example of this sort of “night-flying” exists where private equity firms take over distressed companies with an infusion of fresh cash that is borrowed or supplied by investors.
Operating under the cloak of invisibility (regulations that applied to the doomed and failing company do not generally attach to the new owners so they operate out of sight), the equity groups re-launch a streamline (or shell version) of the failed company, often stripped of union membership and other costly contracts.
The New York Times took a look at how the investment firms Apollo Global Management and Metropoulos & Company, which spent $186 million in cash to buy some of Hostess’s snack cake bakeries and brands (Twinkies) in early 2013.
The industry’s trade group, the American Blackstone is one of the nation’s ten largest employers and one of its biggest landlords. The firm’s co-founder, Mr. Schwarzman, is advising Mr. Trump on job creation.
On average, the heads of the private equity firms earned nearly ten times as much as the heads of banks. The Times listed a few examples of 2,015 earnings:
Stephen A. Schwarzman $799,838,742
Blackstone Group Leon Black 199,840,537
Investors have helped make Mr. Black a very rich man. The Times reports that he “owns homes in Beverly Hills, Miami Beach and several locations in New York, an analysis of real estate records shows. This year, he bought the $38 million house in Beverly Hills that had belonged to the actor Tom Cruise.”
The Times reports that Mr. Black acquired an art collection that is said to include one of Edvard Munch’s “ Scream” series, which he bought in 2012 for about $120 million, then the highest price ever paid for a painting?
To put the price paid for this painting into perspective, you could purchase enough Twinkies (at retail cost) to stack them end-to-end from New York to LA and back and still have enough to stack the remaining Twinkies end-to-end from the Empire State building to the Statute of Liberty and back 25 times.
That’s a lot of Twinkies! – And it is only a fraction of Black’s wealth. The former workers at some of the companies now closed (again) under the new power brokers probably couldn’t afford to waste the $1.50 for a pack of three Twinkies.