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In the thread that was deleted I suggested that I didn't know whether Rauner's experience was the exact wrong way to run a government or exactly what Illinois needed. I was serious about that. Like others, my gut says that running a PE firm is not the right way to run a government. PE firms ARE all about rollups, buyouts and recapitalization. However, Illinois seems like it actually needs rollups and recapitalization and other PE inspired methods to fix its financial problems. In the state as a whole, most of the problems are financial. Or at least, the severity of the financial issues kind of trump every other issue.
Where I am skeptical is if it will actually work. These kind of finance guys got involved in power deregulation in California in the early 2000s. The result was the power company went bankrupt and people in San Diego literally couldn't turn their lights on. Worst case is that the financial wizardry applied by Rauner's team totally backfires and Illinois has to get bailed out by the feds anyway.
This is like saying a fireman is going to raise a baby by blasting it with a water hose.
While his background suggests competent management, the idea that he's going to run the state like a PE firm is asinine.
PE btw is just that--private equity. That's all it is. It can be applied in dozens if not hundreds if not thousands of different manifestations.
If businesses had no desire for it, it wouldn't exist.
As far as I know the only way to take over a company that doesn't want to be bought is with a hostile takeover.
I think Rauner will block any more retarded decissions by the democrats like raising taxes and giving more sweetheart deals to govt unions and Rauner probably won't get much of his agenda passed either. However, at this point a govt that does nothing is preferable to the one that turned everything it touched to excrement like the fully democratically controlled one of the past 15 years.
It is pretty obvious that the only way Illinois can escape some sort of federally managed bankruptcy is a radical restructuring of government in Illinois especially consolidation of the many redundant governing bodies particularly school districts that make this state so financially inefficient as well as renegotiation of union contracts that the democrats gave sweetheat deals to buy their elections with. Otherwise Illinois = Greece.
I agree, and since there's basically zero chance that any "radical restructuring of government" is ever going to happen, we are getting the heck out of here....
These kind of finance guys got involved in power deregulation in California in the early 2000s. The result was the power company went bankrupt and people in San Diego literally couldn't turn their lights on. Worst case is that the financial wizardry applied by Rauner's team totally backfires and Illinois has to get bailed out by the feds anyway.
I lived in CA during that time and sold a product to energy companies at that time. The energy deregulation plan was poorly conceived and executed, in my opinion. They didn't think much of the downfalls, and Enron took advantage of the flaws. Grey Davis' inaction didn't help, either.
While his background suggests competent management, the idea that he's going to run the state like a PE firm is asinine.
Not really.
It is what Romney did in MA and Bloomberg did in NYC. They ran those government entities like they ran their businesses.
Rauner brings nothing to the table besides his success in his previous career, other than he's "not Quinn."
It would be more asinine if he did not apply what he knows how to do to the governorship.
If any of you bother to look at the majority of firms that GTCR has stakes in you will see a strong bias towards firms that just don't have a lot of the problems that other private equity firms get bogged down with -- it is lots less messy to have firms that provide "cloud based software to healthcare organizations" than to try to turn around some antiquated chain of retail stores or transition firms in the coal business to alternative energy. GTCR does not currently have any in the latter and LOTS of former. That tells me that even when they make decisions about how to place capital they do it cautiously and with an eye to long term growth instead of quick hits followed by headaches...
Those things don't just happen, they are part of the 'philosphy' of the firm and no doubt reflect the traits of the cheif executive and whole staff.
Some of those skills have been sorely lacking in the governor's office -- Ryan had a culture that basically said any shmoe that wanted to take state employees on a junket was perfectly fine, he also had terribly intrusive fund raising demands and lax ethics. Blago was as bad in someways, using state government as a kind of plaything and staging his next big move. Had either one of these bozos done anything like actually sit down with real acturaries and re-assess the state's committment to pensions they would have probably fallen asleep. Their feeble brains could not handle bad news.
The reaction of Rauner is almost certainly iniatially going to be "I had no idea how bad things were". Given that he is not a quitter, Rauner will likely shift to HOW TO FIX THINGS and he knows the cooperation of Madigan and other Democrats AS WELL AS A WHOLE LOT OF FOLKS FROM THE REPUBLICAN SIDE is crucial. He won't get that cooperation by making waves that upset the natural order, but he will likely rely on the considerable desire of folks that have made careers in Springfield to not be tossed. That means folks that spout off about "union busting" or other non-starters have been listening the propaganda and not reality. Things can change in ways that allow genuine reform. That is not as hard as it sounds for a guy that has experience helping firms decide how to grow and what strategy is going to be best combination of growth with lowest risk...
Last edited by chet everett; 11-06-2014 at 01:26 PM..
if any of you bother to look at the majority of firms that GTCR has stakes in you will see a strong bias towards firms that just don't have a lot of the problems that some private equity firms get bogged down -- it is lots less messy to have firms that provide "cloud based software to healthcare organizations" that to try to turn around some antiquated chain of retail stores or transition firms in the coal business to alternative energy. GTCR does not currently have on the latter and LOTS of former. That tells me that even when they make decisions about how to place capital they do it cautiously and with an eye to long term growth instead of quick hits...
That is one way to look at it.
Other way to look at it is GTCR's portfolio is heavy in telecom infrastructure and health care, two industries where the government is paying or at least guaranteeing payment. Whereas other PE firms who are involved in messy retail and energy are actually in industries which generate their own wealth.
If any of you bother to look at the majority of firms that GTCR has stakes in you will see a strong bias towards firms that just don't have a lot of the problems that other private equity firms get bogged down with -- it is lots less messy to have firms that provide "cloud based software to healthcare organizations" than to try to turn around some antiquated chain of retail stores or transition firms in the coal business to alternative energy. GTCR does not currently have any in the latter and LOTS of former. That tells me that even when they make decisions about how to place capital they do it cautiously and with an eye to long term growth instead of quick hits followed by headaches...
Those things don't just happen, they are part of the 'philosphy' of the firm and no doubt reflect the traits of the cheif executive and whole staff.
Some of those skills have been sorely lacking in the governor's office -- Ryan had a culture that basically said any shmoe that wanted to take state employees on a junket was perfectly fine, he also had terribly intrusive fund raising demands and lax ethics. Blago was as bad in someways, using state government as a kind of plaything and staging his next big move. Had either one of these bozos done anything like actually sit down with real acturaries and re-assess the state's committment to pensions they would have probably fallen asleep. Their feeble brains could not handle bad news.
The reaction of Rauner is almost certainly iniatially going to be "I had no idea how bad things were". Given that he is not a quitter, Rauner will likely shift to HOW TO FIX THINGS and he knows the cooperation of Madigan and other Democrats AS WELL AS A WHOLE LOT OF FOLKS FROM THE REPUBLICAN SIDE is crucial. He won't get that cooperation by making waves that upset the natural order, but he will likely rely on the considerable desire of folks that have made careers in Springfield to not be tossed. That means folks that spout off about "union busting" or other non-starters have been listening the propaganda and not reality. Things can change in ways that allow genuine reform. That is not as hard as it sounds for a guy that has experience helping firms decide how to grow and what strategy is going to be best combination of growth with lowest risk...
Wait, Chet's back? There was a thread a few weeks ago asking where Chet had been. Was it not updated when you made your return?
My experience is different. I have worked with private equity companies on the other end...the company being invested in.
Quote:
Originally Posted by emathias
One of the largest private equity firms in the world is General Atlantic.
To be clear I'm not making any general statements about private equity companies overall, I'm talking specifically about Bruce Rauner and GTCR, and how that experience can be applied to running a state. I agree with emathias and I don't see how it is directly relevant to managing a state. The instances where you do see government getting involved in those areas generally go poorly for the government entity involved.
Quote:
Originally Posted by jonnynonos
Your post is too ignorant for me to bother refuting in detail. I will leave it at this; for all of your expertise you didn't even have the name or location of the school correct.
You're right - I said Whitney Young when I meant Payton. I leave that up to anyone reading the posts to judge how large of a mistake that is.
That still leaves the main point standing - do you think it's OK for a guy from Winnetka to use political connections to get his daughter into one of the most desirable CPS schools when thousands of Chciago residents are rejected every year? I have serious problems with that on many levels, and it certainly factors into my opinion of Rauner.
Quote:
Originally Posted by jonnynonos
As far as I know the only way to take over a company that doesn't want to be bought is with a hostile takeover.
A takeover is a takeover, whether friendly or hostile. Sometime over the last 20 years PR departments started calling takeovers "acquisitions", but there is no difference at all between a takeover and an acquisition. Whether the takeover is friendly or hostile can change multiple times during the process, depending on the bids involved. It really has no bearing on what I'm talking about at all.
GTCR is certainly a company that is heavily involved in takeovers/acquisitions and proudly advertises itself as such. I have no idea why you want to deny that.
Again - my point is that Rauner's experience is not as a manager involved in operations, it is as a financier. I don't see the relevance of that to managing a state.
I think Rauner will block any more retarded decissions by the democrats like raising taxes and giving more sweetheart deals to govt unions and Rauner probably won't get much of his agenda passed either.
Rauner is facing a veto proof majority in both the house and the senate - he can't block anything.
That said, I hope Chet is right and he negotiates reasonable policies with Madigan and Cullerton, but I'm not hopeful. The fact that he's brought guys like Bill Daley and Oberhelman to handle the transition makes feel that the state is going to continue to be fleeced.
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