Letters to the Editor

Don't debase private equity in funding infrastructure

Regarding the May 7 Opinion piece, "Main Street, not Wall Street, should fix crumbling US infrastructure" by Kansas Governor Kathleen Sebelius and Service Employees International Union President Andy Stern: The authors' suggestion that public pension funds could be an important new source of capital for public infrastructure projects is one that public officials charged with making these decisions should carefully consider.

However, we take issue with their gratuitous and inaccurate attack on private equity investment partners as short-term profiteers who somehow spawned the subprime mortgage crisis and whose interest in public infrastructure investment should be regarded with, at best, suspicion, or at worst, contempt. The authors well know – or should know – that private equity investors had nothing to do with packaging, promoting, and securitizing consumer mortgages.

The truth is that a raft of independent research conducted by widely respected scholars and institutions demonstrates that private equity firms are long-term investors that significantly improve the performance of the companies they acquire. The research shows that private equity firms have generated hundreds of billions of dollars in profits for their investors – many of which are the public pension funds that Mr. Stern Ms. and Sebelius want to lead into infrastructure investment.

It seems premature to slam the door on what is potentially tens of billions of dollars of investment capital.

Douglas Lowenstein
Washington

President, Private Equity Council

In response to Kathleen Sebelius and Andy Stern's recent Opinion piece on infrastructure investment: The piece highlights a critical issue but proposes the wrong solution. As a nation, our need isn't more debt. Our need is to prioritize our wants, including the public versus private allocation of resources.

We give government the power to tax. With that power we expect government to pay the bills as they come due.

If we need more public goods and services today, we must change the allocation of public/private resources today and we must pay for the resources today.

Debt is very addictive and very expensive. It doubles future taxes to pay interest and administrative costs. Borrowing from banks adds the cost of inflation. Borrowing from foreigners suggests that we're unable to finance our own affluence.

For private individuals and companies, it makes sense to borrow if we assume borrowers are making a profit and can increase profit by borrowing. Governments don't operate on a profit basis. There's nothing to be gained by borrowing but added cost. The same rules don't apply for both the private and public sectors.

H.A. Gardner
Goleta, Calif.

Maintain language style standards

Regarding Justin Reich's May 13 Opinion piece, "Turn teen texting toward better writing": Students should be encouraged to write whenever possible, but they should be taught proper style.

One of the best ways to learn to write is to read. English classes require reading "the classics," but those language styles are not used today, and many students learn to hate reading because of the awkward style. Maybe if modern reading was done first, and "classics" saved for senior year, students would learn to like reading, and would develop a writing style that could be understood.

Peter Hibbard
Toms River, N.J.

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