Pols and CEOs gorge at the IPO feast
It's time to impose new rules on the rich man's Shangri-la.
Topics: Goldman Sachs, Wall Street, Politics News
The Loch Ness monster. Papal infallibility. Angelina and Billy Bob’s endless love.
To this collection of shattered modern myths we can now add the heavily hyped notion that, with roughly half the American population currently invested in the stock market, Wall Street has been “democratized” — that all of us are equally free to travel its level road to riches.
The truth is less egalitarian utopia and more rich man’s Shangri-la. The vast majority of American shareholders — 80 percent of us — control just 4 percent of the entire market, while the richest 1 percent of shareholders have portfolios brimming with a whopping 47.7 percent of the market’s total value.
The latest example of how the financial deck is stacked against the average investor is the revelation that banking behemoths like Citigroup, Credit Suisse First Boston and Goldman Sachs regularly doled out hard-to-get shares in hot IPOs to favored customers, among them corporate big shots and politicians.
Given the very cozy connection between Wall Street and Washington — “You scratch my back, and I’ll scratch my name on the front of a big, fat campaign check with your name on it” — it should come as no surprise that political insiders, some of them on congressional committees investigating these IPO practices, have been getting in on the ground floor of fast-rising IPO elevators for years.
Among the prominent politicians of both parties who were moved to the front of the line at the IPO feast: Sens. Barbara Boxer, Judd Gregg, Robert Torricelli, Jeff Bingaman and Fred Thompson; Reps. Nancy Pelosi and John LaFalce; and former senator Al D’Amato and former speaker of the House Tom Foley. This special access only reinforces the indubitable contention that corporate America and official Washington have grown far too close for the comfort of the rest of us.
The allocation of these goodies was no small perk. At the height of the tech bubble, when every morning seemed to bring another cash-gushing IPO — initial shares of Priceline.com, for instance, skyrocketed more than 300 percent in value on its first day of trading — being cut in on a hot IPO was like being handed the combination to Bill Gates’ wall safe, a stable boy’s pick in the featured race at Aqueduct, and the map to the fountain of youth. All on the same day.
Arianna Huffington is a nationally syndicated columnist, the co-host of the National Public Radio program "Left, Right, and Center," and the author of 10 books. Her latest is "Fanatics and Fools: The Game Plan for Winning Back America." More Arianna Huffington.




Obama Faces Dogged Heckler At Drone Speech
This Is The Woman Who Interrupted Obama's Speech
LGBT Job Discrimination Bill Won't See Action Until July, Senator Says
Comments
0 Comments