"We are incredibly proud of what we do at Blackstone and the vital role we play in society," says Steve Schwarzman
There’s a war of words raging between the private equity industry and several of those who want to be the next resident of the White House.
Following a recent report by the American Investment Council, aided by Ernst & Young, presidential candidates including Elizabeth Warren and Bernie Sanders slammed both the report and the private equity industry.
In a letter to EY, the lawmakers said that the report was a “sham” and claimed the report was “distorted and biased.”
“There are a myriad of other ways that corporate interests can wield their influence. One way they do so is by funding sham research — by consultants and researchers who receive big bucks for their work — to back up their views,” the letter states.
But among those defending the private equity industry is the chief executive of one of its biggest players.
Steve Schwarzman is chairman, CEO, and co-founder of The Blackstone Group and he’s told CNBC’s “Closing Bell” that there is a lot of good that comes from his firm.
“We are incredibly proud of what we do at Blackstone and the vital role we play in society,” he told host Wilfrid Frost. “For example, the very strong returns we generate, particularly in the current low interest rate environment, enabled teachers, police officers, firemen and other public and corporate sector employees to retire with sufficient savings and secure pensions.”
Schwarzman is so proud of the positive outcomes that he has written a newly-released book "What It Takes: Lessons in the Pursuit of Excellence,” which details many examples of the good that the firm’s investments have brought about.
He told CNBC that the legislation that Warren and others would like to enact is inconsistent with what the firm does.
“What we do is we buy assets. Say we buy a company and we make them better. Why do we make that company better? Because that’s how you can sell it to someone else for more. If indeed the entire industry was premised on looting and ruining companies, no one would give us any money to manage,” he said.
Asked if he is concerned about the proposal for a wealth tax on US billionaires, Schwarzman said he didn’t think it would work, highlighting 8 of the 12 countries that had tried it that have since scrapped the idea.
He said that the big problem is not income inequality, which he says the US has always seen, but “income insufficiency” caused in part by globalization and a decline in education.