To Advertise (772-633-1115) ST. LUCIE VOICE | ST. LUCIE WEST AND TRADITION | BOOKS August 3, 2023 B19 As a democratic capitalist republic, the economic system of America has allowed it to be the engine that drives the world economy, and that offers a cornucopia of benefits as well as unlimited opportunities. Capitalism is an “economic and political system in which a country’s trade and industry are controlled by private owners for profit.” The benefits of the system are obvious and many. However, there are dark spots in this picture, areas where the system either breaks down or just plain fails too many. Well-known business journalist Gretchen Morgenson, with co-author Joshua Rosner, have given us an exceptionally well-written, well-documented look at one area where the system has propagated a pirate-like group of predators; they do their damage under the label of “private equity.” The authors’ recently-released book, “These Are the Plunderers: How Private Equity Runs – and Wrecks – America,” is interesting, highly informative and, frankly, numbingly disappointing (and scary) because of what their hard work reveals. The authors show us – with extensive research and solid factual support – that there is a through line from the 1960’s to the present, of a group of financial manipulators who have made billions for themselves and for their investors. This “trend” was known as “mergers and acquisitions” during the 1960’s, where consolidation and “economies of scale” were the top line toutings. It morphed into “leveraged buyouts,” which were greatly assisted by Michael Milken, Drexel Burnham Lambert and the “junk bonds” which financed that round of carnage. As these ultra-wealthy manipulators grew bolder, the label changed to “hedge funds,” and then (and currently) they are known as “private equity” funds. The labels changed, the laws and regulations changed (almost always in their favor, thanks to obscene amounts money and effective lobbyists), the various economies at the times changed, the amounts of money increased – but the intent of these people was always the same: more and more profit, at almost any cost (not to them, of course). And the results, while profitable for the few, have rendered problematic consequences to many people, corporations, businesses and even whole industries. The authors show us convincingly the dark, ruthless underside of capitalism … and it is painful and often scary. We learn that there are currently over 5,000 private equity companies in America. The book uses the five biggest as points of focus: Apollo Asset Management and its founder and former leader Leon Black; KKR and Co., Inc.; Blackstone, Inc.; the Carlyle Group; and Bain & Company. We see through these five predators (and several lesser-known firms) that the need for junk bonds disappeared as they each acquired massive amounts of their own capital, which they easily supplemented by taking in investors who sought higher rates of return – much higher! With a war chest in place, they set about finding victim companies to take over, pillage and rape, walk away from with their profits, and let the charred remains of those companies march into bankruptcy courts … or worse. Their tactics are visible and almost all legal, although some violate specific laws by specific instances of insider trading, by lying to the government and/or investors, and by other “sharp elbow” practices which go over an applicable legal line. They find victim companies and acquire voting/majority control through stock purchases. With voting control, they take over the board of directors with their own directors. And then, much like a lethal virus, they set about devouring the company. They initially cut budgets and employees in an effort to increase profits. They get creative with financing, mostly by issuing new bonds (debt for the victim company, cash to them) to bring in millions in new funds. Those new funds are often used to buy back their stock at the newly inflated prices (sometimes known as “dividend recapitalization”). They charge the companies “management fees,” which are often contractually bound well into the future when there is no management to be had – but the fee is still owing. They often manipulate products sold between these captive companies, and other captive companies in their acquired portfolio of captive companies (known as “stacking the channels”) to prop up the balance sheet through “inventory enhancement,” often prior to a kiss-off sale of the company. Often the new debt from the newly issued bonds, which they force the victims to issue, is crippling from the inflated interest payments on the bonds. It’s a vicious cycle, repeated far too often, with catastrophic – foreseeable – results as the consequence. Another kind of tactical advantage these predators enjoy is what is known as “carried interest.” This legal provision gives them about a 50 percent discount on otherwise applicable taxes. Private Equity charges their funds/investors 2 percent as a management fee, plus 20 percent of profits, also as a management fee. The 2 percent is taxed as normal income; the 20 percent is deemed “carried interest,” and is conveniently taxed at the capital gains rate of 20 percent, as opposed to what would be applied as the highest tax rates, i.e., 37 percent, a huge discount considering the huge amounts of money involved. Do they need this kind of special treatment? The book’s story follows private equity firms buying large numbers of companies where they can extract huge potential profits, sometimes even consuming whole industries. We see them buying up companies who operate nursing homes; we see a major consolidation of hospitals; we see the emergency rooms taken over, and the “practice of medicine by corporations” run up prices, as well as coerced admissions to their associated hospitals; we see the opportunity to create captive insurance companies – health and life were most appealing – where a large pool of capital offered even more plunder opportunity; we see a successful aluminum company sucked dry and run into the ground; we see captive health companies forced by the plunderers to overbill Medicare… by billions; and on and on. The authors drop facts, statistics and key measurable points with ease, and often. Many of those will cause you to feel angry, sad or just disappointed. For instance: Between 2005 and 2017, nursing homes owned by private equity firms experienced 10 percent more resident deaths than occurred in facilities not owned by private equity, about 20,000 extra deaths. Twenty percent of companies acquired by private equity (per a 2019 study at California Polytechnic State University) filed for bankruptcy, versus 2 percent of other companies. Between 2003 and 2020, retailers owned by private equity eliminated 500,000 jobs. Between 1990 and 2018, approximately $45 billion vanished from pension funds in private equity acquired companies. And on and on… This is not an easy book to read, mainly because the subject matter is so alarming, so disappointing, and only continues on a larger scale today. There is not much good karma in these pages, possibly with the exception of Leon Black, the founder of Apollo, the acclaimed individual leader of that firm as well as the private equity “movement.” In 2020, his involvement with the notorious Jeffrey Epstein surfaced. From 2012 to 2017, Black had paid Epstein $150 million … for tax advice (?). These covered-up payments, plus a rape charge from earlier, forced him to leave Apollo under a cloud. He of course had accumulated personal billions at that point. No other individual in the book suffers any sort of consequences from their plundering under the label of “private equity.” These few extremely wealthy individuals who run these private equity firms, and their incestuous relationships with legislators, regulators, law firms, accounting firms and other enablers, are presented by these well-respected authors in a concise, well-researched, well-written story with a balanced perspective. Your reaction, when you have read this book, will very likely not be balanced. Larry David Allman is a resident of PGA Village Verano. His new book, “TACTICAL YOGA: A Guide to the Strategic Use of Posture, Breath and Meditation,” and his prior books are available on Amazon. He is a former lawyer and Broker Associate with Branca Realty Professionals. He can be reached at allman.larry@ gmail.com. BOOK REVIEW BY LARRY DAVID ALLMAN
B20 August 3, 2023 ST. LUCIE VOICE | ST. LUCIE WEST AND TRADITION | GAMES www.stlucievoice.com The Telegraph How to do Sudoku: Fill in the grid so the numbers one through nine appear just once in every column, row and three-by-three square. The Telegraph SOLUTIONS TO PREVIOUS ISSUE (JULY 27) ON PAGE B11 ACROSS 1. Evergreen tree (3) 3. Male goose (6) 7. Everlasting (7) 8. US breakfast dish (5) 10. Impolite (4) 11. Tiny folklore hero (3,5) 13. Allow (6) 15. Special skill (6) 17. Pale purple colour (8) 18. Leave out (4) 21. Pry (5) 22. Fruit (7) 23. Vocalist (6) 24. Dog’s foot, e.g. (3) DOWN 1. Surrender (5) 2. Conjuror’s stick (4) 3. Ride fast (6) 4. Nocturnal bird (8) 5. Gourmet (7) 6. Capital city (10) 9. Reserve (10) 12. Canadian city (8) 14. Type of pasta (7) 16. Mend (6) 19. Parrot (5) 20. Outing; stumble (4) PREVIOUS EDITION’S SOLUTIONS, SEE PAGE B16
To Advertise (772-633-1115) ST. LUCIE VOICE | ST. LUCIE WEST AND TRADITION | GAMES August 3, 2023 B21 ACROSS 1 Show respect 4 Warden’s woe 8 Singer Basil 12 “___ girl!” 16 Drum place 17 ___ of the tongue 19 German donkey 20 Computer type, sometimes 21 1960s group whose leader was replaced by John Denver 25 Self starter? 26 King chronicled in Daniel 27 No. cruncher 29 Tempe sch. 30 French article 31 Block attachment? 32 “Who could ask for more?” 37 Wave parts 40 Greek letter 41 Rachel Carson topic 42 Love affairs 44 “Pick ___ ...” 49 Author Carr 52 Drop 54 Big to-do 55 Professional help 57 “A Summer Song” duo 61 “Push for ___” (dispenser sign) 62 Signaled 63 Reset setting 64 Kid’s word 65 Robin Williams film 69 Achieve closure, in a way 73 Mama bear, to Manuel 74 Warren G.’s successor 75 “Sorry” 76 Travel dir. 77 Glee at someone’s misfortune, Germanstyle 82 Pal of Pound 86 A Confederacy of Dunces author 87 Reason for a lost past 89 Blustery 90 Hard to climb 91 Shooters of a sort 93 Bawl 95 Tell the media about 96 With “ovi” it means “egg-bearing” 98 Henry Fonda circus movie 101 Coupon sites 104 Sailor 105 Tavern 107 A kerf guides it 108 Agree, like the Supreme Court in a 2000 case involving chads 114 Like a guru 117 Shakespeare comedy with squabbling lovers 119 Tile shade 120 Extra 121 Sound remarks? 122 A touching game 123 Judge 124 ___-do-well 125 Destroyer attacked on 10/12/2000 126 Messy place DOWN 1 Second letter to Aristotle 2 Pearl Harbor site 3 Miserable one 4 Old cheer 5 “This ___ outrage!” 6 Venerable, once 7 Drum in Latin music 8 Like many Nasdaq stocks 9 Hazard-monitoring org. 10 Vexing one 11 M.D.’s focus 12 Bug movie 13 The Divine Comedy’s verse form, ___ rima 14 Threesome 15 Be ga-ga over 18 Pope’s name 22 Manilow’s club 23 Ft. Worth sch. 24 “___ we forget” 28 Throw in 32 Mennonites, e.g. 33 Sundance Film Festival site 34 Racer Yarborough 35 Whirlpool 36 Downed a sub 37 State of health: abbr. 38 Actress Lee 39 Challenge for Houdini 42 Feels one’s muscles? 43 Anthropologist Margaret 45 Scoundrel 46 “All systems ___” 47 Tybalt’s slayer 48 Laundromat need 50 Lassie creator Knight 51 Fugue fellow 53 Slangy sleazeballs 56 Quiet time 58 A, B, C, or D 59 Neil Simon’s nickname 60 Doe and Deere 62 Leg part 65 Mails 66 Cravat alternative 67 California-Nevada lake 68 Roseanne hubby 69 Gold reserves? 70 Tarzan’s friends 71 Over again 72 Tongue store 75 Sam of Georgia 78 Heady pint 79 Ed Wood portrayer 80 Prego rival 81 Grounded birds 82 Mitchell’s estate 83 ___ instant 84 Valhalla figure 85 Model Banks 88 German pronoun 91 Expand 92 Viagra spokesman, once 94 Passing-stat abbr. 97 Turkish official 98 Elvis Mitchell, for example 99 Breakfast order 100 Is in store for 101 Packing heat 102 Low card 103 “___ bleu!” 105 Personal hist. 106 Part of a nuclear arsenal 109 Buddy 110 No effort at all 111 Trucker with a handle 112 Grab ___ 113 Christmas song 115 Tiny buzzer 116 Like a.m. dishes 118 Half a fly The Telegraph The Washington Post ...It was in the cards Well, Punch Me Out! By Merl Reagle
B22 August 3, 2023 ST. LUCIE VOICE | ST. LUCIE WEST AND TRADITION | GAMES www.stlucievoice.com Remember the cards – remember what? By Phillip Alder - Bridge Columnist Fran Lebowitz quipped, “Remember that as a teenager you are at the last stage of your life when you will be happy to hear that the phone is for you.” South tried to run rings around the defenders on this deal by being clever with his diamond spots. South was in four spades after using New Minor Forcing to learn that his partner had three-card spade support. West led his singleton diamond seven: three, king, two. East cashed the diamond ace: nine, club three, diamond four. Next, East played the diamond six: 10, heart five, diamond jack. What should West have done now? When delivering the ruff, East led the six, his lower-remaining diamond, a suit-preference signal, asking for a club return. However, note that declarer had been clever with his diamond spots. West hadn’t seen the diamond five and eight. He didn’t know whether East’s diamond six was high or low. Should West have shifted to a spade or a club? From the diagram, you can see that a club is right – but how does West know that? The answer lies in East’s plays to the first two tricks. He should anticipate that West might have trouble deciphering the diamond six. So, if he wants a heart switch, he wins the first trick with the diamond ace, not the king. As he won trick one with the king, then played the ace, East is requesting a club return. Dealer: North; Vulnerable: East-West NORTH A Q 3 J 7 5 4 Q J 4 3 K 9 WEST 9 5 4 10 8 6 3 7 Q 10 8 4 3 SOUTH K J 8 6 2 A K Q 10 9 5 2 J EAST 10 7 9 2 A K 8 6 A 7 6 5 2 The Bidding: OPENING LEAD: 7 Diamonds SOUTH WEST NORTH EAST 1 Diamonds Pass 1 Spades Pass 1NT Pass 2 Clubs Pass 2 Spades Pass 4 Spades Pass Pass Pass Whether a full gym or single equipment, we determine what will work best for your body, your budget and your space. Contact us for a FREE CONSULTATION at 772-934-6078 Stationary Bikes • Treadmills • Ellipticals Rowers • Climbers/Steppers and much more 2761 NW Federal Hwy., Stuart PlatinumFitnessUSA.com We Bring the Gym to your Home!
To Advertise (772-633-1115) ST. LUCIE VOICE | ST. LUCIE WEST AND TRADITION | SPORTS August 3, 2023 B23 As you most of you know, the short game plays a vital role in lowering your scores. Generally, the short game area falls into four categories: putting, chipping, pitching and greenside bunker play. This week I would like to give you some “Kures” regarding how to set up properly when chipping. Let’s dig in and get into some of the details: 1. Take your putting grip, more in the palms than the regular grip; your wrists should be arched more upright than on a regular shot. 2. Narrow stance, slightly open; stand as close to the ball as you would for a putt. 3. Weight should be 70 percent on the left leg. Flexing the knees slightly down and diagonally forward accomplishes this. 4. Hands are forward with ball position in the middle of the stance. 5. The swing is a putting motion with a slight shift forward with your body. The swing shape is a slight V-shaped motion (upright back, low through). 6. Swing your arms forward to maintain the forward lean of shaft and to ensure a flat left wrist and a slightly bent-back right wrist. Chipping Club Selection The more time I spend helping people with their chipping, the more it is apparent that most of my students don’t have a system for selecting the optimal club when chipping. The first principle to understand is, generally you maximize your control by keeping the ball low, as opposed to choosing a higher flight. That is why we have coined the phrase minimum airtime, maximum ground time. Again, a lower-flighted chip will be easier to control. This will maximize control. However, don’t expect to see this method being practiced on the PGA Tour. The art of chipping is dead on the tour. The players on the tour hit their pitches and chips much too high -- a method I would not recommend! Next edition, I will expand on this topic and give you a very thorough and logical system for club selection when chipping. Kevin Perkins is a PGA Master Professional and operates his Golf Academy at Sailfish Sands Golf Course in Stuart. Kevin is a longtime resident of PGA Village and has hosted and produced his own television and radio golf shows, and co-authored the instructional book “Golf Everyone,” published by Hunter Textbooks. He may be reached at 561- 301-3783 or via email at [email protected], or visit his website at www.kevinperkins golfacademy.com. CHIP SOME STROKES OFF YOUR HANDICAP WITH THESE TIPS KEVIN’S KURES By Kevin Perkins GOOD FORE-TUNE FOR HOLE-IN-ONE MAKERS! Precision play was evident once again at PGA Golf Club recently as two more holes-in-one were recorded. Member Brian Willetts, above left, made his first hole-in-one at PGA Golf Club by knocking in a 7-iron shot from 150 yards on the Ryder course’s 16h hole. Member Butch Butler also had an ace on the Ryder, holing a 115-yard 9-iron on the 10th hole. Congrats Brian and Butch!
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