There are many valid points to be made regarding private equity, most notably the excesses in the private lives of a few.

But this article, even allowing for the satirical nature, is unimaginative and makes none of them. The message is not only that a) PE people are overpaid, but also that b) they do not in fact work hard at all and meerly do financial engineering (which the writer also seems to assume is terribly simple and requires no work, like hitting the Easy button) and that c) washing dishes and coal mining are inherently more valuable and noble than working in finance.

All of that would be acceptable, if only the article was funny. It is decidedly not.

KKinsley was right on target. Washing dishes and mining coal (and shoveling shit from a chicken house) ARE inherently more noble and worthwhile than financial engineering.

Try one of these jobs for a year and get back to me. We'll talk again. You will be a much wiser man, one with a much better appreciation for humor.

Awesome open with the name calling. I assume that is what you mean by humor.

At any rate, I grew up on a farm. So I have done that type of labor my whole life. Moved rocks, chopped wood, baled hay, built fences. So what. Labor is labor. There is no inherent nobility in the act itself, rather any value of that nature is ascribed via the purpose of the work. If you work to feed your family, you work to feed your family. Sitting in a chair for 90 hours a week crunching numbers is just a different form of that sacrifice.

If you are willing to have an adult conversation. I would be interested in hearing why you think they more noble and worthwile? What is noble about washing dishes? Your attitude would immediately indicate to me that you've never done it. Maybe you have. But it's a crappy, thankless job. Not noble, as you naively claim in your fetishizing of it. Same with bending steel, etc. Maybe you think they are making objects, which serve a purpose and affect people directly, that this makes things happen. People in finance will tell you the exact same thing about their job. Think: a GM needs money to function, and employ people. They certainly aren't getting it from not selling any cars.

Go ahead and fetishize manual labor all you want. No one with a clear head that has had to do it for any extended period would do so. Go read Phil Levine. I do think hard work is something to be proud of, assuming it has a point. The point is that if you push a pen, or scrape a plate there is no inherent nobility in it.

I grew up on a farm as well. Milked cows at age 10. Drove a tractor in the field before I knew what made the engine work. Did every dirty job on a farm--and there are more than I could mention. Pulled bales of hay back from the elevator to the stackers.

At age 13 went to work in the hayfields for $1 per hour. Thought I was getting rich. Worked in construction and orchards. Dug post holes all one summer until the calouses on my hands were shiny.

Peeled potatoes and pumped gas

Served my country in uniform.

I know the value of labor.

And I am here to tell you that labor is noble. Thoreau told us that cutting wood warms us twice: once when we do the labor and once when we burn the wood.

Folks who juggle numbers, make huge salaries, and ruin the lives of the working man deserve a special place in hell.

Talk to a parent engaged in these noble jobs and see if they desperately want their children to have a less noble job, like lawyer, doctor or financial engineer.

I’ve worked such noble jobs (dishwasher, busboy, janitor), and couldn’t wait to graduate out of them into a nice office, with a view, air conditioning and growing belly.

I don't need you to mention dirty jobs on farms, I've done them all. Drop the smugness and engage me in conversation. Because again, you ignore what I am saying. Why is type A of labor more noble than type B? What is the greater inherent worth in one than the other. Obviously we are not talking about contribution to the GDP or any utilitarian measure. We're talking feel it in your gut worth. I put forward in my last post that there was no inhernet nobility of that sort in any labor, that the worth or value came from the reason you were doing it. However...

...instead of adressing the matter you imply that I have special place in hell. I sure hope it includes coverage of Cowboys games.

Continuing, the assumption that anyone who "juggles numbers" automoatically ruins the lives of working people (here I assume you mean blue collar) is silly. (And by the way you can't "juggle numbers" as it is against the law...there are accounting principles to follow. We don't walk in a room, yell you're fired and then pick lists of digits out of a hat to post a profit. There's hours and days and weeks and months of planning going on.) To be sure there are some people who do ruin lives just to expand margins. They respond by saying that overall private equity result in net job creation. Statistics certainly do support this, but I admit it is a cowards way of assuaging guilt. That's not how most people are functioning.

PS- Thoreau went to Harvard and then was a teacher and lecturer. The only wood chopping he ever did was when he was living at Walden Pond...and he only had to do because he put himself in a contrived situation where he would have to do so. Because he also fetishized the common man's physical labor. I'm not disinvalidating the pleasure of a physical act well done. It is satisfying, and task well done is. I'm not talking down at physicl labor. I'm saying it is all apiece. Again: labor is labor. So why do you think scraping dishes is more noble than raising funds for a business that will otherwise not be able to operate? Concrete talk.

Whatever you feel about doing jobs that add value, nevertheless, those jobs create the real wealth of any society, they create real property, and YOU move property around is all.

As a parent, I can assure you if being a waitress made my kid happy, that would be fine with me -- only you dysfunctional, sick, authoritarians want to play "outdoing the Joneses" games; mentally healthy people look for basic needs and then fullfilling their potential, not for crowing and putting down others. Mentally healthy people understand that in realizing their potential, their own needs, their gifts are not for them alone, but for the social good.

Pavarotti did not sing in the bathroom! His gifts were for everyone, not just for him.

Adam Smith is right whe he wrote:

But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, [or Pavarotti to sing for us] but from their regard to their self-love, and never talk to them of our own necessities but of their advantages."

Dear DreadPirate_80,

There are two points that I believe are worth making here. First is that Mr. Rubenstein states that being employed at a private equity firm requires "hard work" not just financial engineering. So we're not just talking about work, it has been qualified as hard work, a horse of an entirely different color. I suppose we could now embark on a parsing of the word hard but I feel that most people would agree that coal mining is hard work and number crunching is not. Secondly, 25K an hour seems a bit excessive for any type of work no matter how hard. But that isn't what is most bothersome to me. What gets my personal goat is the mere 15% tax they are required to pay on that "hard" earned dough. Would you please tell me how that is equitable?

The matter of nobility is moot because it is too subjective a concept to apply across the board.

It's the gap. Considering that it so often takes money to make money and that those with huge sums of money pay relatively similar percentage rates on taxes (and can better afford to pay someone to manage their money so they can minimize taxes) is where the problem seems to arise. If my greater amount of wealth gives me an easier vantage at making money, the playing field isn't equal. My understanding of America is that we try to make the flaying field equal to reward merit; not circumstance.

Forgetting that idea and moving on the "hard" work, I'm sorry, but sitting in an airconditioned office with a secretary to bring you coffee along with other amenities, even at 90 hours/week, is not tougher than digging ditches or inhaling sawdust which makes your body ache and fall apart quicker. Add to this line of thinking the many teachers like my wife who work 60-70 hours per week yet get paid for 35 regardless, and I think the "work A and B" rhetoric falls so flat it's ridiculous. Who bitches about the taxes we teachers ask for? It isn't usually the poor. "It's my money; why should I have to pay when i don't have kids; etc. etc. etc." I think the wealthy, particularly the very wealthy, forget that they only make so much money because of the society in which they live. They like to think they earned every dollar through determination and hard work but the simple fact of the matter is that they earned only a percentage of that. The rest of it was gained because they live in a wealthy nation where having resources such as money makes it easier for them to make yet more money. Take the richest, most adept businessmen and place them in a different environment during their development and they will be but a shadow of their "greatness." I'm not talking just about people who were born into wealth.

"Secondly, 25K an hour seems a bit excessive for any type of work no matter how hard."

Which brings another thought to mind: Those with more money almost always have more power. This allows greed to rule business and politics. I'm not saying rich=bad. I know more poor people who are "bad," (thugh I would argue it comes more from their environment, though they do have that persoal choice always) yet when the playing field of power brokerage is based upon something so arbitrary as monitary status, this allows the self-centered, anti-social, greedy to do things like hike up power costs and laugh about it over the phone. And yet socialists are called names while "good hard working" capitalists like those are rewarded unless they get caught. I'm no communist and I tend to prefer the libertarian view of things, but frankly, people suck, and until we account for this fact of human nature and impliment measures which accurately reflect our democratic ideals, the self-serving ignorant will have more power than the other-regarding ignorant (we're all ignorant after all).

Anyway, i'm rambling, but I hope my meaning wasn't lost through my poor expressions. Take care folks.

He wasn't the only one who was right when he said, "[scratch my back and I'll scratch yours]." Still, i think that while it's important to recognize the interest of self inherant in most transactions (it's not in ALL transactions, depending upon one's semantic application) it is not the self-interest which ultimately drives a win-win situation (the highest ideal of capitalism?) but rather the sense of mutual benificence, the other-regarding notion, which keeps everyone on the same page and working together. I think it is too easy to fixate on the self-interests in the business world...but how else could it be when competition is held in such high regard? Competition is a mental short-cut for those who would like to acheive their personal best while cooperative concepts still allow for it, but often get derided as "soft" and smelling too much like hippy-stink.

I am dismayed by the strange rhetoric in these posts. There are quite a few misunderstandings, and yes, openly jealous remarks.

First, no one makes $25K an hour (except, perhaps celebrities). That is not how life in the world of capital allocation works. Let me pose an analogy for you:

Say you buy a home, with 10% down, for $200K and sell it a year later for $280K (as did many folks over the past few years). You just made $60K off of a $20K investment. Does this mean your hourly income over those two years was really $30 more per hour than what your stated pay was? of course not. Also, should we apply regular income tax rates to that "capital gain"? Today most real estate transaction incur little or no federal taxes.

Private equity investing works pretty much the same exact way. Buy a business, do some things to make it more valuable, then sell it for a profit. There is also substantial risk in this type of investing. Consider the implications of the value of that home decreasing by $30K.

Second, changing tax treatment for private equity managers is easier said than done. (forgive me for getting technocratic for a minute) Increasing tax rates on carried interest will cause managers to seek lower-tax investment structures. I am not a tax attorney, but it is pretty safe to say that as long as there is a lower capital gains tax rate, business entities will be set up to enjoy those rates. The only way to really do away with the lower tax rate is to do away with separate tax rates for capital gains entirely. This is unlikely to happen.

Third, adding the word "hard" to work is a nonsense qualifier. I, like others who have posted, have done both manual labor as well as intellectual labor. Both could be described as "hard" from different perspectives.

I know of few more miserable professions, at the entry level, than investment banking and private equity. Associates at these firms, while well compensated, frequently work all night on deals that have little chance of success, are routinely belittled and live in incredibly expensive locations (I would rather earn $50K a year in Atlanta than $100 in NYC).

While finance is not as physically demanding as pounding landscaping stakes, it also does not provide the immediate intrinsic reward of seeing the beautiful landscape one just created nor the comraderie that shared physical labor provides. I, for one, would rather travel around my neighborhood on the back of a trash-truck, cutting up with fellow workers and finishing my work by 3:00pm than suffering through the miserable office politics, endless modeling exercises and ridiculous minutia that is a day (and night) at the office for those private equity.

Finnaly, the most troubling aspect of many of these posts is the assumption of permanent station in life. No one needs/has to be a coal miner. Even if you have marginal skills, there are lots of other choices of work that will pay about the same. People choose to be miners. Just as people choose to be investment bankers. I have a pretty good idea of why folks choose the latter.

If readers of this post, truly, truly think of everyone in the capital allocation business as slimy theives, then it is your RESPONSIBILITY to unseat them. There are already a number of labor friendly investment funds popping up.

Get an education, raise some money, and buy some companies. You can pay yourself a small working-wage. Return all the profits to your employees. Decide which plants get open or closed. Figure out how to compete with low-cost foreign rivals. Deal with law suits. Negotiate with labor. Manage changing regulatory rules. Pick which initiatives to bet the company on. I think you might figure out, it aint easy.

Was "hard work" a poor choice of words? probably. But the self-justifying, anti-capitalist, mean spirited posts here are similarly ill conceived.

"I am dismayed by the strange rhetoric in these posts. There are quite a few misunderstandings, and yes, openly jealous remarks."

Well, without knowing exactly what you're refering to, it's hard to address your assessment.

"Third, adding the word "hard" to work is a nonsense qualifier. I, like others who have posted, have done both manual labor as well as intellectual labor. Both could be described as "hard" from different perspectives."

I disagree that it's nonsense. It has a distinct meaning, though one which is open to interpretation. Still, i think we might be able to gather a generalized/relative sense of what hard vs. easy work is. I can't speak for others, but this thread seemed to be about something more general than what you're specifically talking about. There is definately an uneven playing field in the business world...or perhaps you'd rather call it a societal flaw? The point is, there are many who work relatively harder jobs for lesser pay. Add to that the fact that folks with more money are at a distinct advantage when it comes to taking that 20k house loan, etc. and you should be able to see how this is uneven.

"Finnaly, the most troubling aspect of many of these posts is the assumption of permanent station in life. No one needs/has to be a coal miner."

Here's where you're simplifying things. I agree with the point that you're making: that people are not bound to their "station" in life, but you sound as if everyone has an equal shot at any job/income, and that is simply not the case. Coal miners don't think, "You know what would be fun? Mining coal!" They find the job based on local economy and availability. Furthermore, yes, someone MUST be a coal miner or we have no coal. Janitors also don't choose to become as such nearly so much as circumstance dictates they must or find some other similar job. If we liken pay to amount of work, I don't think executives making 300k per year tend to work 10 times as much as the teacher who makes 30k. That is what i think this thread is speaking about and which you're missing.

"Even if you have marginal skills, there are lots of other choices of work that will pay about the same. People choose to be miners."

Marginal skills? I don't think skill translates as more pay. With few exceptions, skills are aquired on the job more than in the classroom. This means anyone should be able to do investment banking, but not everyone can afford the degree needed. The simple fact you seem oblivious to is that, as free a nation as we are, there is a class system present. I see it in the education system all the time. Which schools get the best resources to teach with? The ones in the richest neighborhoods. Don't sit there and tell me everyone has an equal choice when I know for a fact they don't. The poor have to work harder to acheive the same as the wealthy...and this applies to the varying degrees within the two extreams, regardless of how much you may like to think otherwise.

"Was "hard work" a poor choice of words? probably. But the self-justifying, anti-capitalist, mean spirited posts here are similarly ill conceived."

Not a poor choice in words, though yes, open to debate. Relative values still hold value and can be utilized in concrete ways. Again, without knowing what you're specifically responding to, it's hard to address your remarks here, but I'm willing to bet you're being at least a little assumptive with regard to "self-justifying, anti-capitalist, mean spirited" rhetoric. It may well be that there are bitter words spoken here, but you seem to assume they are without any foundation and I for one can see how they might have more than that. I don't know what kind of manual labor you've done or the extent of your perspective, but money determines far more than you seem willing to admit.

Take care.

“If my greater amount of wealth gives me an easier vantage at making money, the playing field isn't equal.”

Many of our circumstances are determined by our parents. You have a foot up in life if mom was married to dad and if they were both stable people who valued education. It’s not an absolute determining factor, it is possible to get on base with two outs, but starting with three balls makes it easier.

But this is almost besides the point, measuring someone who is at the top of winner-take-all profession against someone else who is average in what isn’t a winner take all is obviously going to be lop-sided.

“Forgetting that idea and moving on the "hard" work, I'm sorry, but sitting in an air-conditioned office with a secretary to bring you coffee along with other amenities, even at 90 hours/week, is not tougher than digging ditches or inhaling sawdust which makes your body ache and fall apart quicker.”

Depends on how you measure it. That coal miner doesn’t have every other coal miner in the industry out to get him. The average actor earns something close to zero dollars in a year. Someone in the top 90th percentile probably earns 4 digits. A top of the line actor earns a 9-digit income, but there aren’t many of them. I assume Investment banking is similar but with the added complication that there are lots of other smart and rich and well connected people out there who’d be very happy if you failed.

Further, if we assume I’m a reasonably healthy and intelligent man, I imagine that I can learn how to dig ditches in a day and how to mine coal in a month. But I’m never going to be an investment banker if I’m only reasonably intelligent. Let's change professions for a moment, how long would it take to learn how to make movies that are just as popular as Spielberg’s?

“Who bitches about the taxes we teachers ask for? It isn't usually the poor. “

Considering “the poor” don’t pay much in taxes, I’d certainly think so.

“I think the wealthy, particularly the very wealthy, forget that they only make so much money because of the society in which they live. They like to think they earned every dollar through determination and hard work but the simple fact of the matter is that they earned only a percentage of that. The rest of it was gained because they live in a wealthy nation where having resources such as money makes it easier for them to make yet more money.”

There are things that only the government can effectively do (schools, police, roads, armies), and it is certainly appropriate for them to tax us, and it is also appropriate to tax the rich more. But it’s dangerous in a democracy for people to learn they can have things for free by taxing other people. Why are we paying hundreds of billions of dollars for a drug benefit program? Does it really fall into the same category as schools, roads, and police, or is it more of a vote buying exercise?

This is a dangerous habit to get into as Europe is finding out. The very rich are by definition (i.e. by the market's judgment) the most successful and productive people we have. In general their activities should be encouraged because they add the most to our collective wealth. Or put a different way, those investment bankers create jobs. They shouldn’t be punished for this.