Posts Tagged ‘minimum wage’

Today’s Dream Team Scouting Report: @WilburRoss, #SecretaryOfCommerce #TrumpPresidente

January 6, 2017

 

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Born Wilbur Louis Ross, Jr.
November 28, 1937 in Weehawken, New Jersey, U.S.
Political party Republican
Democratic (Formerly)
Spouse(s) Judith Nodine (1961–1995)
Betsy McCaughey (1995–2000)
Hilary Geary (2004–present)
Children 2 daughters (with Nodine)
Alma mater Yale University (BA)
Harvard University (MBA)
Net worth US$2.5 billion (December 2016)

Wilbur Louis Ross, Jr. is an American investor, and former banker, known for restructuring failed companies in industries such as steel, coal, telecommunications, foreign investment and textiles. He specializes in leveraged buyouts and distressed businesses. As of August 2014, Forbes magazine lists Ross as one of the world’s billionaires with a net worth of $2.9 billion.

Ross grew up in an affluent family in suburban New Jersey. His father, Wilbur Louis Ross, Sr., was a lawyer who later became a judge, and his mother, Agnes (O’Neill), was a school teacher.

Ross drove 2 hours a day from NJ to attend the elite Catholic college preparatory Xavier High School in Manhattan. He ran track and was captain of the rifle team. He earned a BA degree from Yale College, which was also his father’s alma mater. At Yale, he edited a literary magazine and worked at the radio station. Initially, he wanted to be a writer, but after his experience in a fiction class requiring 500 words daily, he concluded that he had “run out of material.” His faculty adviser helped him get his first summer job on Wall Street. He earned his MBA degree at Harvard Business School.

Career

Rothschild Investments 

  • In the late 70’s, Ross began 24 years at the New York office of Rothschild Inc., where he ran the bankruptcy-restructuring advisory practice.
  • In the 80’s, after quickly expanding the reach of Resorts International to Atlantic City, Donald Trump found himself in financial trouble as the real estate market in NYC bottomed out. His three casinos in Atlantic City were under threat from lenders. It was with the assistance and assurance of Ross, then senior managing director of Rothschild Inc., that Trump was allowed to keep the casinos and rebuild his businesses.
  • In the late 90’s, Ross started a $200 million fund at Rothschild to invest in distressed assets. As the U.S. bubble began to burst, he decided he wanted to invest more and advise less. On April Fools’ Day 2000, the 62-year-old banker raised $450 million to plunge into fallen companies.

WL Ross & Co.

  • In 2000, Ross bought out his equity fund and opened WL Ross & Co. in New York with $440 million in investor money and a staff that included four top managers who, along with Ross, make up the firm’s investment committee: David H. Storper, who runs trading; David L. Wax, a longtime workout specialist; Stephen J. Toy, an Asia expert; and Pamela K. Wilson, a J.P. Morgan & Co. veteran.WL Ross & Co. was acquired by Amvescap (now Invesco) in 2006.

International Steel Group

  • Wilbur Ross at first had support of the local Steelworkers Union, negotiating a deal with them to “save” Pennsylvania’s steel industry.
  • Ross sold the Richfield, Ohio-based International Steel Group to Mittal Steel Company for $4.5 billion April 2005. As of 10 months later, Ross had not sold any of his Mittal shares.

International Textile Group (ITG)

  • Ross combined Burlington Industries and Cone Mills in 2004 to form International Textile Group. ITG operates 5 businesses, all of which operate under separate brand names: Cone Denim, Burlington Apparel Fabrics, Home Furnishings, Carlisle Finishing and Nano-Tex. The company entered into a 5-year, $150 million credit facility led by Bank of America. Other lenders in the bank group included GE Capital and CIT Group.

International Automotive Components Group (IAC) 

  • Ross, Chairman of International Automotive Components Group (“IAC”), announced on Oct 16, 2006 the completion the acquisition of Lear Corporation’s European Interiors Systems Division on a debt-free basis in exchange for 34% of the stock in IAC. The transaction will expand IAC’s presence in Europe to 20 facilities in 9 countries with approximately $1.2 billion in annual revenues. In early 2007, Lear completed the transfer of substantially all of its former North American Interior Systems Division to International Automotive Components Group North America. The deal involved 26 manufacturing plants and 2 Chinese joint ventures. Lear also contributed $27 million in cash for a 25% interest in IAC North America and warrants for an additional 7%.

Collins & Aikman Europe 

  • On November 28, 2005 the joint venture by Ross, Franklin Mutual Advisers, and Lear Corporation, announced an agreement to acquire from Collins & Aikman Europe (“C&A”) its $600 million operations in Austria, Belgium, Czech Republic, Germany, Netherlands, Slovakia, Spain, Sweden, and the United Kingdom serving Ford, General Motors, DaimlerChrysler, Porsche, Saab, Volkswagen, Volvo and other original equipment manufacturers. The exchange is subject to approval of the local insolvency authority and the Austrian Court.
  • The Joint Venture has also bought the subsidiary of C&A in Brazil.

Safety Components International

  • On December, 2005, Zapata Corp. Chairman, Avie Glazer, announced the sale of 4,162,394 shares, 77.3%, of Safety Components International to Ross for $51.2 million. Safety Components, an independent manufacturer of air bag fabrics and cushions, is headquartered in Greenville, South Carolina, USA and has plants in North America, Europe, China and South Africa.

Oxford Automotive 

  • Ross owns 25% of Oxford Automotive, a French company, which is in talks to be taken over by Wagon.

International Coal Group

  • Ross founded the International Coal Group, which has now gone public. The United Mine Workers of America protested the bankruptcy regulations that had allowed him to set up the International Coal Group free of labor unions, health care and pensions.

Political activities 

  • Ross served under U.S. President Bill Clinton on the board of the U.S.-Russia Investment Fund
  • Served under NYC Mayor Rudy Giuliani as the Mayor’s privatization advisor.
  • In January 1998 he put $2.25 million in seed money into McCaughey Ross’s campaign. Although he was an early supporter of Donald J. Trump’s presidential campaign, Ross in earlier years was a registered Democrat, served as an officer of the New York State Democratic Party and held fundraisers for Democratic candidates at his apartment in NYC.
  • Since at least 2011, Ross began donating to Republican candidates and organizations, and became a registered Republican in 2016.

Organizational memberships and directorships 

  • Ross is a member and past director of the Turnaround Management Association and the American Bankruptcy Institute and a member of the Committee on Capital Markets Regulation.
  • As of January 2012, Ross was the leader (or “Grand Swipe”) of the secret Wall Street fraternity, Kappa Beta Phi.
  • He serves on the board of trustees of the Brookings Institution and the board of advisors of Yale School of Management. He donated $10 million for the construction of Evans Hall at the Yale School of Management.
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Today’s scouting report on America’s Dream Team Steven Mnuchin, Secretary of the US Treasury

December 20, 2016

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Steven Terner Mnuchin
December 21, 1962
New York City, New York
Spouse(s) Heather deForest Crosby (1999–2014)
Domestic partner Louise Linton (engaged)
Children 3

Steven Terner Mnuchin is a former Goldman Sachs partner and senior manager and hedge fund investor. On November 30, 2016, it was announced that Mnuchin would be nominated as Secretary of the Treasury in the coming administration of President-elect Donald Trump.

After he graduated from Yale University, Mnuchin worked for investment bank Goldman Sachs for 17 years, reaching its management committee. After he left the bank in 2002, he worked for and founded a number of hedge funds. During the financial crisis, Mnuchin bought failed house lender IndyMac. He rebuilt the bank as chairman and CEO in the subsequent years under the name OneWest Bank, and sold it in 2015 to CIT Group. Mnuchin joined Trump’s presidential campaign in 2016, and was named national finance chairman for his campaign.

Goldman Sachs
Mnuchin’s first job was as a trainee at investment bank Salomon Brothers in the early 1980s, while still studying at Yale. After he graduated in 1985, he started working for Goldman Sachs, where his father had worked since 1957. He started at the mortgage department, and became a partner at Goldman in 1994. Until he left the company in 2002, Mnuchin held the following positions as a partner.

November 1994 – December 1998: Head of the Mortgage Securities Department
December 1998 – November 1999: Overseeing mortgages, U.S. governments, money markets, and municipals at the “Fixed Income, Currency and Commodities Division”
December 1999 – February 2001: Member of the Executive Committee and co-head of the Technology Operating Committee
February 2001 – December 2001: Executive Vice President and co-Chief Information Officer
December 2001 – 2002: Executive Vice President, member of the Management Committee, and Chief Information Officer

According to the 2001 Goldman Sachs Form 10-K, Mnuchin served as a member of the development board of Yale University, as board member of the Riverdale Country School, as member of the national board and senior member of the non-profit youth organization Junior Achievement, to which he had donated money, and as a board member of the Hirshhorn Museum and Sculpture Garden. He left Goldman Sachs in 2002 after 17 years of employment, with an estimated $46 million of its stock and $12.6 million that he received in the months prior to his departure.

Hedge funds
After he left Goldman Sachs in 2002, Mnuchin briefly worked as vice-chairman of hedge fund ESL Investments, that is owned by his Yale roommate Edward Lampert. The following year, he established the company SFM Capital Management together with financier George Soros. Mnuchin founded a hedge fund called Dune Capital Managment, named for a spot near his house in the Hamptons, in 2004 with two ex-Goldman partners. After its founding, Mnuchin served as the CEO of the company. The firm invested in at least two Donald Trump projects and, in one of them, was sued by Trump before a settlement was reached.

When Merrill Lynch was selling a portfolio of residential mortgage-backed CDOs during the financial crisis, Mnuchin investigated buying the portfolio, but was outbid by private equity Lone Star Funds. It was sold for $6.7 billion.

OneWest
A group led by Mnuchin bought California-based house lender IndyMac for $1.55 billion in 2009 from the FDIC. The house lender had been taken over by the FDIC in 2008 after it got into financial problems during the financial crisis. Mnuchin’s group, that he compiled in December 2008, included George Soros, hedge fund manager John Paulson, former Goldman Sachs executive Chris Flowers, and Michael Dell, the founder and CEO of Dell. The FDIC agreed to hold on to some of the more problematic assets of the bank, and signed a loss-sharing agreement, that would go into effect if losses would surpass 30%. The main possessions of IndyMac were $23.5 billion in commercial loans, mortgages, and mortgage-backed securities. After purchasing the bank, that was renamed OneWest Bank, Mnuchin served as CEO and chairman.

As the CEO of OneWest, Mnuchin bought several other failed banks, namely First Federal Bank of California in 2009 and La Jolla Bank in 2010. Furthermore, OneWest bought a portfolio belonging to Citi Holdings for $1.4 billion. In 2015, Mnuchin sold OneWest to CIT Group for $3.4 billion, twice as much as Mnuchin paid for the bank in 2009. Since he had bought the bank, he had turned it into the largest bank of Southern California with assets worth $27 billion. After the acquisition, Mnuchin remained at the bank, and became member of CIT Group’s board.

Motion pictures

In 2004, he founded RatPac-Dune Entertainment as a side business, which was the financier of a number of notable films, including the X-Men film franchise and Avatar.

In Hollywood, Mnuchin, along with film producer Brett Ratner and financier James Packer, working with RatPac-Dune Entertainment, produced American Sniper and Mad Max: Fury Road. Mnuchin was co-chairman of the trio’s movie company, Relativity Media, but left before it went bankrupt. A source close to the company said that he had resigned because of the potential for a conflict of interest between his duties at Relativity and OneWest.

Mnuchin worked with RNC counterpart Lew Eisenberg on a late-developing joint operation for the committee and the Trump campaign. The late-summer fundraising goal was $500 million dollars. The New York Times described his role during the campaign as “relatively behind the scenes,” and the newspaper noticed he never “seemed to seek the spotlight.” During an interview, Mnuchin said that because of his connection to the Trump campaign “a lot of people in California and New York wanted to stop being friends.” After Donald Trump won the election, he announced Mnuchin would join the transition team on November 11.

Views
In an interview in November 30 on CNBC Mnuchin called it the Trump administration’s job to “make sure that the average American has wage increases and good jobs.” Furthermore, he said his priority was getting a sustained growth of GDP of three or four percent. He said in order to get there “our number one priority is tax reform.” Mnuchin said he would reduce corporate taxes to 15%, cut taxes for the middle class, and simplify the tax system. When asked about trade, he said he believed in trade deals with individual countries, as opposed to regional trade deals. About Trump’s deal with Carrier Air Conditioning to prevent jobs from going to Mexico, Mnuchin said “this president […] is gonna have open communication with business leaders.” Furthermore, he said he wants to “strip back parts of Dodd–Frank,” because he argued it was too complicated, and it prevented banks from lending. He called the stripping back of Dodd–Frank “the number one priority on the regulatory side.”

DONALD TRUMP: La Clase Trabajadora, El Capitalismo, y La Inmigración

December 19, 2016

img_2510La democracia moderna nació en Atenas como consecuencia del reclamo del pueblo por una porción de la economía que en aquel momento era dominada por la aristocracia. Pericles fue inteligente y entendió que no se puede manejar a una sociedad mientras se subvierte sistemáticamente a la mayoría de sus ciudadanos.

En 1215, la decisión del Rey John de Gran Bretaña, de firmar la Magna Carta no fue por la defensa de la “Libertad del Individuo”, sino por las demandas de la clase media por una Libertad Económica que permita a todos tener oportunidades de desarrollo.

Democracias siempre han surgido, o desaparecido dependiendo del nivel de satisfacción de la clase media y de su pueblo.

Un buen sistema económico debe ser como la marea del mar que eleva a todos los barcos que se encuentran en ella. El sistema del mercado libre -o capitalismo- es tal sistema. Sin embargo, la mayoría de nuestros presidentes han permitido la degeneración del mercado libre hacia el corporativismo donde las compañías más ricas influyen al gobierno de turno, y donde el Estado es cada vez más omnipotente.

El Capitalismo depende de la habilidad del gobierno de garantizar la justicia universal de sus ciudadanos. La única igualdad conducente a la libertad es la igualdad ante la ley, la única que debe asegurarse sin destruir la libertad.

La inmigración ilegal a los EEUU se convirtió en un tema importante durante la campaña electoral del 2016 porque a pesar de que sea considerada como el motor del crecimiento económico que ha tenido los EEUU, esta no ha sido manejada de una manera responsable, o humanitaria por nuestros líderes políticos. Milton Friedman describió que un país no puede tener fronteras abiertas mientras a la vez otorgue servicios sociales demasiado generosos. El país sería sobrecargado por aquellos en busca de tales beneficios, por encima de aquellos que entran con buenas intenciones. El capitalismo no puede sobrevivir bajo tales condiciones.

En la Unión Europea por ejemplo, se requiere que se de prioridad de entrada al inmigrante sin especialización laboral, por encima del inmigrante con mano de obra avanzada. El resultado ha sido mayor desempleo para el ciudadano europeo, sin los beneficios de la marea alta creada por nuevas industrias. Lo mismo pasa en los EEUU donde un inmigrante emprendedor en Silicon Valley no puede obtener visa de trabajo, mientras que cientos de miles de indocumentados reciben amnistía después de haber atravesado la frontera ilegalmente. El que sufre es el trabajador Americano por consecuencia de una economía que no puede fomentar el crecimiento de industrias avanzadas que alcen la marea para todos.

Donald Trump ha sabido identificar tales problemas y entiende al pueblo que reclama por mayor orden y sentido común. Nuestro nuevo Presidente representa los mejores intereses del pueblo americano y está dispuesto a terminar con este sistema que por tantas generaciones hemos querido cambiar.

Today’s scouting report on America’s Dream Team Andrew Puzder, Secretary of Labor

December 16, 2016

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Andrew Franklin Puzder July 11, 1950 (age 66)
Cleveland, Ohio, U.S.
Political party Republican
Spouse(s) Lisa Henning (1973–1987)
Deanna Descher (1987–present)
Children 6
Residence Franklin, Tennessee
Alma mater Cleveland State University (BA)
Washington University (JD)

  • From 1978 to 1983, was an associate at the law offices of St. Louis attorney Morris Shenker, practicing corporate law.
  • In 1984 he moved to the Stolar Partnership and worked with trial attorney Charles A. Seigel.
  • He also served as a trial lawyer in St. Louis until 1991.
  • Puzder authored Missouri House Bill 1596, an abortion law prohibiting the use of state money for abortions and declaring that life begins at conception. Following a challenge, the Supreme Court in 1989 upheld the law in Webster v. Reproductive Health Services. The watershed decision opened the door for new state-level restrictions on abortion.
  • Puzder met Carl Karcher, the founder of the Carl’s Jr. who was embroiled in serious financial difficulties and asked Puzder to move to California as his personal attorney. In 1991, Puzder relocated to Orange County, California. Puzder has been credited with resolving Karcher’s financial dilemma, allowing Karcher to avoid bankruptcy and retain a significant ownership interest in the company he founded, CKE Restaurants, Inc. (CKE).
  • Puzder was a partner in the Costa Mesa-based law firm Lewis, D’Amato, Brisbois & Bisgaard from 1991 to 1994 and a shareholder in Stradling Yocca Carlson & Rauth from March 1994 to 1995.
  • Puzder principally resolved Karcher’s financial problems by putting together a transaction with William P. Foley, the Chairman and CEO of Fidelity National Financial. In 1994, Foley became Chairman and CEO of CKE and Karcher became Chairman Emeritus. In January 1995, Puzder went on to become Executive Vice President and General Counsel for Fidelity, managing one of the largest corporate legal departments in the country until June 2000. Puzder also worked with Foley to create the Santa Barbara Restaurant Group, a conglomerate of restaurant chains. Puzder served as the company’s CEO.
  • In 1997, Puzder was also named Executive Vice President and General Counsel for CKE.
  • Also in 1997, CKE purchased Hardee’s Food Systems, Inc. Hardee’s was a distressed brand and CKE was burdened by over $700 million in debt following the acquisition. The company underperformed and its market capitalization dropped to about $200,000.
  • Faced with serious financial and operational issues, CKE’s Board of Directors named Puzder as president and CEO of Hardee’s Food Systems in June 2000 and named him president and CEO of CKE Restaurants, Inc. in September of that year. Puzder is credited with turning around both the Hardee’s brand and CKE, allowing the company to survive, become financially secure and return to growth.
  • In July 2010, the private equity firm Apollo Global Management took CKE private in a transaction valued at $1 billion.
  • In December 2013, Roark Capital Group purchased CKE and retained CKE’s management team including Puzder, who remains as CEO.
  • CKE currently owns or franchises over 3,700 restaurants in the United States and 40 foreign countries, generates $1.4 billion in annual revenue and, with its franchisees, employs over 75,000 people in the U.S.
  • In December 2016, Puzder was selected by President-elect Donald Trump as his nominee for Secretary of Labor of the United States.

    Affiliations

  • In 2011, Puzder was appointed to serve on the National Advisory Board of Washington University School of Law.
  • In 2013, he was elected as a director of the International Franchise Association’s Board of Directors.
  • Puzder is a National Council Co-Chair of the American Enterprise Institute.
  • Puzder is a member of the Job Creators Network, an organization opposing government regulation of corporations.

    Authorship and commentary 

  • Puzder has been critical of raising the federal minimum wage, arguing that it would increase costs for consumers, and increase automation, leading to fewer jobs.
  • He also opposed a Labor Department rule that would make more workers eligible for overtime pay.
  • Puzder also supports repealing the Affordable Care Act and has been critical of paid sick leave policies.
  • Speaking to Business Insider in 2016, Puzder said that increased automation could be a welcome development because machines were “always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall or an age, sex, or race discrimination case.”
  • He backed comprehensive immigration reform in 2013.
  • Puzder is a frequent author on economic and legal issues in periodicals such as The Wall Street Journal, Forbes, Real Clear Politics, CNBC online, National Review, The Hill, Politico, and the Orange County Register.
  • He has been a guest on business news programs including Your World with Neil Cavuto, Varney & Co., Mornings with Maria, The O’Reilly Factor with Bill O’Reilly, Mad Money with Jim Cramer, Fast Money, Power Lunch, Lou Dobbs Tonight, and Squawk on the Street.
  • He has co-hosted both Varney & Co. and Squawk on the Street.
  • He is also a frequent speaker at colleges, universities, and other venues on economic issues and the impact of government regulations on corporations.
  • In 2010, he co-wrote the book Job Creation: How It Really Works and Why Government Doesn’t Understand It.

The election of Donald Trump, who promises a new wage growth strategy based on economic growth, signals that Americans get that a new approach is needed. Now Mr. Trump has doubled-down on his job creation mandate by nominating Mr. Puzder who understands from personal experience as a top CEO why wage regulations fail. Simply put, they create perverse incentives and market distortions that reduce job growth and economic activity, which are the real harbingers of wage growth.

Speaking this truth to the pop-culture powers that cling to wage mandates as the answer to wage growth is not popular. Mr. Puzder has been attacked recently for his opposition to, among other regulatory policies, dramatic minimum wage increases, doubling of the overtime exemption threshold, and requiring employers to offer health care. These attacks mischaracterize and demagogue his positions.

Consider the minimum wage. The nonpartisan Congressional Budget Office has estimated that a minimum wage increase to $10.10 would kill 500,000 jobs. Last December, the Federal Reserve Bank of San Francisco released a paper finding that the “most credible” research showed minimum wage increases resulting in “job losses” for “the least skilled workers”. Mr. Puzder’s opposition to significant minimum wage increases stems from wanting to avoid job losses for low-skilled employees.

Same with the overtime mandate that was recently struck down by a Texas judge. This rule would have doubled the salary threshold under which employees are eligible for overtime pay to $47,500. For many beginning managers, this rule would have reduced or eliminated the flexibility and bonus potential that come with a salaried position. That’s because most employers, including Mr. Puzder, incentivize their managers to run the business they manage like they own it, with a compensation structure that rewards performance over time.

Finally, economic and anecdotal evidence show that the Affordable Care Act’s employer mandate has had the unintended consequence of encouraging employers to convert full time jobs to part time jobs. It has done this by requiring employers to offer health insurance — often several thousand dollars a year — to their employees who work over 30 hours per week or pay up to a $3,000 per employee penalty. Employers have no such obligation for employees working under 30 hours, making part-time employment more attractive. This is hardly an “anti-worker” position.

Though the specific wage and benefit regulations vary, the principles underlying why they don’t work remain the same: Make something more expensive and you will get less of it. Fewer job opportunities and a less robust economy reduce the demand for labor, resulting in wage stagnation.