For years, crony capitalists have used the federal government to enrich themselves. Many people voted for Donald Trump with hopes that the incestuous relationship between government and corrupt businessmen would come to a screeching halt. If that is true or not remains to be seen.
The ongoing saga between Pershing Square Billionaire Bill Ackman and the company Herbalife will be a great example of which way the wind is blowing for crony capitalists. In case you missed it, Bill Ackman took a one-Billion-dollar short position in Herbalife four years ago intent on tanking the company. His war to destroy Herbalife and significantly enrich himself hasn’t gone as planned.
Ackman has backed himself into a corner and taking down a successful American company is the only way he can get out of it. Herbalife fought back, not ready to be a willing accomplice in its own demise. They have streamlined their entire business to remain very profitable and to, above all else, toe the line and operate above board. When you know the government is coming for you, you have to be above reproach.
Herbalife prepared for how they anticipated Ackman would attack them. Ackman pulled out all the stops and launched a media blitz against the company to incite fear and derision. He employed an army of lobbyists to pressure politicians to do his bidding, the epitome of a “Crony Capitalist”.
Ackman was successful in pressuring the Federal Trade Commission to investigate Herbalife. The FTC eventually rejected the claims that Herbalife was an illegal pyramid scheme exonerating them of any wrong business practices.
Ackman has gone on to claim that Herbalife has no customers, but all company reported statistics contradict that. Despite Ackman’s war, Herbalife has remained a profitable company with happy customers. Apparently, if you provide a product people actually want at a price they can afford, you can still succeed in business in America.
What product does Pershing Square create? None.
They sell fear and profit from the destruction of successful companies. It’s hard to respect that kind of business model or have any sympathy for the man who runs it. Forgive me if I’m not sorry to see your nefarious plot turn against you, Mr. Ackman.
It might be time for Bill Ackman to give it up, take his losses and move along. As a guy who writes about cronyism all the time, it’s getting rather repetitive talking about Ackman and his obsession with Herbalife.
Ackman does have a billion reasons to keep on with his vendetta that has long ago crossed over into manic.
Just imagine what could have been produced if Ackman would have spent his billion dollars on some new technology or invested in a company with the hopes of it prospering? Amazing things could have been done with that money. Mr. Ackman would be billions of dollars ahead had he not set his sights on destroying someone else’s company.
As the Trump administration moves along, I am watching to see what becomes of Bill Ackman and his desire to crush Herbalife. Ackman’s lobbyists and media machine are still out there working under the cover of darkness and in the smoky back room.
What happens next will be a clear example of which way the winds are blowing for crony capitalists with billions to burn. If Ackman is successful in his bid to destroy Herbalife, we will know that it’s business as usual around Washington and Wall Street.
Hopefully, Bill Ackman will finally call it a day and buy an island somewhere. Herbalife can go back to selling healthy products people want and we will all know the world is a little less corrupt.
Bill Ackman, give it a rest!
photo credit: Excerpted from: Exile on Ontario St Le Bourgeois Pig via photopin (license)
