* Whet Moser at Chicago Magazine is fast becoming my favorite political blogger.

Moser doesn’t post a lot, but when he does it’s clearly after he’s given things much thought. For instance, during all the hooplah over Bruce Rauner’s $140,000 wine club, Moser took a decidedly contrarian, but fact-based position…

Napa Valley Reserve isn’t a wine club in the sense that you plunk down six figures and get a bottle of wine in the mail. It’s somewhere between a dude ranch, a time-share for hobbyist winemakers, and Costco for wine collectors.

And it might be a bargain. Here’s how Food & Wine describes it:

An alternative to owning a vineyard is belonging to the Napa Valley Reserve, winemaker Bill Harlan’s new club. A $150,000 deposit buys the right to purchase from one-half to three barrels of wine. You can do as much of the work as you want, from grape picking to barrel tasting. About 275 people have joined so far, half from outside California, and Harlan expects to cut off membership at 400.

According to a 2010 Huffington Post piece, members can buy bottles for $78.

He did the math of deposit plus wine costs and concluded that members could buy wine for about $250 a bottle. But that wine actually retails for between $450 and $900 a bottle….

Plus the Reserve deposit is refunded if you quit. At these prices, you’d be crazy not to join.

Excellent point.

* One of his more recent posts does a good job of explaining this exceedingly frustrating statement by Rauner…

* Moser uses some past articles to explain that this is how Rauner does business. From a 2011 Rauner interview in Chicago Mag…

Most private equity firms buy mature companies and unwanted divisions of large corporations, managements intact. But you seem to go out and find management and then, together with them, go buy the companies.

We’re in two businesses: industry research and executive recruiting. We study industries, and we network like crazy to find the superstars. Today, we’re partners with two dozen CEOs. Some we’re backing for the second, third time. It can take from six months to nine years from the time we meet someone until we actually become partners with each other.

* Rauner’s 1999 explanation of how GTCR is involved with companies…

We’ll take one or two seats on a company’s board of directors, and then help out in areas where we can be useful, focusing on issues like recruiting additional executives; identifying acquisitions for the company; helping structure, price, and negotiate acquisitions, if they ask us to do that; arranging other types of capital in addition to our own arranging debt or mezzanine financing, arranging joint ventures or leasing terms, etc.; helping the company go public selecting the underwriters and the analysts, and getting it public at the right time at the right price. We try to be supportive partners and advisors, without getting in the way.

* Whet’s conclusion…

It’s banking and management, but not necessarily the operations of the business itself.

And that might go some way towards explaining Rauner and his goal-first, plan-later approach. He’s accustomed to targeting acquisitions or industries in which to create a business, setting goals for that business—and then assembling management to carry out those goals.

Rauner has been emphatic about his plan to put together a can-do bureaucracy from experts; indeed, that’s much of his expertise, a hands-on recruiter of talent… But much of Rauner’s “management” will be selected by the fractious, divided state he wants to govern in the form of the legislature. Will it work? He wants you to trust him—and for the state to pick him on the basis of his business success, as he’s done his whole life.

Discuss.

       

28 Comments - William j Kelly - Thursday, Sep 18, 14 @ 12:13 pm: Hey that’s great, do the math on wine, terrific, now do the math on Rauner’s proposals maybe? - econ prof - Thursday, Sep 18, 14 @ 12:20 pm: I think this is some thoughtful analysis, rather than the typical partisan bomb-throwing/insulting. I don’t think Rauner is the saviour or the perfect candidate, but I don’t think he’s an evil villain robber baron, either. I think Illinois needs a radical shake-up if we’re ever going to get out of this mess, including a lot of outside-the-box, unconventional thinking and ideas. I don’t think anyone who has been part of the problem (Quinn) should be afforded the opportunity to continue to captain the Titanic and ferry into every iceberg that comes into our path. I’m willing to give Rauner a chance to see what he can do. He can’t possibly do any worse than the inept Pat Quinn. - VM - Thursday, Sep 18, 14 @ 12:26 pm: If Rauner expects me (and other voters) to buy into this story that the way he is successful is by setting goals and then recruiting the best people, he should be able to tell us who he’s interested in appointing to top government positions in Illinois. Because if that’s his talent — his secret sauce — he better be able to prove it. And given that he expects to take the reins in four months, you’d think he has some ideas about who to recruit. On a less important note, I’m not that impressed by the reasoning on the wine club. First, $250 a bottle is a lot. And if his $140,000 comes out to $250/bottle, I want to know where he keeps the 560 bottles. Second, it’s just another example of an underlying structural flaw in our market. If you are rich and have enough money upfront, things cost less to you than others. I remember this from Econ 101, a discussion about why food prices are so much higher in poor neighborhoods. To me, the analysis just underscores that the rich get richer — and that Rauner seems to take that for granted rather than consider it a problem. - Anonymous - Thursday, Sep 18, 14 @ 12:29 pm: - you’d be crazy not to join. - Or you could just not be rich. Getting your $150k back is nice, but having an extra $150k to throw around is nicer. - PolPal56 - Thursday, Sep 18, 14 @ 12:30 pm: Uh-huh, it’s what I said to my wife last night. He must be good hiring at people to make money for him, because I’ve seen no evidence of any ability of his own to plan. - Moist von Lipwig - Thursday, Sep 18, 14 @ 12:35 pm: Thoughtful analysis, but to what end? The point was that he’s not the aww shucks everyday Joe that he tried to present. And, really, he should still have plans. - D.P.Gumby - Thursday, Sep 18, 14 @ 12:35 pm: This just demonstrates that Rauner doesn’t understand government. He is not dealing w/ his own money or the money of a small group of cronies. Government is representative of all citizens and residents. They deserve, nay, have the right, to know the plans in advance. “Trust me” only applies to a part of the selection and comes from hearing and seeing the plans and philosophy of governing, not “trust me I have them but will not tell you cuz that’s not how I operate.” This analysis really solidifies why I think Rauner is a serious threat to Illinois…even worse than Quinn! - Anon - Thursday, Sep 18, 14 @ 12:37 pm: == He can’t possibly do any worse == Really? Unlike Quinn, Rauner might refuse to make the state’s full contribution to the pension funds. That’s how the state got the largest unfunded pension liablity in the first place. Unlike Quinn, Rauner can’t explain how he would balance the budget, pay the overdue bills, increase funding for education, all while having the biggest tax cut in state history. - MrJM - Thursday, Sep 18, 14 @ 12:40 pm: You can follow Whet on Twitter at: https://twitter.com/whet (Full disclosure: We had an interesting conversation about the bizarre and dynamic inventories of interstitial corner grocery stores just this morning.) – MrJM - A guy... - Thursday, Sep 18, 14 @ 12:42 pm: Pretty fair assessment without injecting partisanship into the analysis. Good on him. Good on you for sharing it. If he has any similar analyses on the Governor, I’d be anxious to read those as well. - vise77 - Thursday, Sep 18, 14 @ 12:51 pm: I follow Whet on Twitter and daily am glad that I have. He’s an original thinker and usually pretty funny–you might not always agree, but you will likely remember what he’s saying. - Anonymous - Thursday, Sep 18, 14 @ 12:52 pm: can do. He can’t possibly do any worse than the inept Pat Quinn Where have I heard that before? Oh yeah- after George Ryan was under investigation. That fall , many people here in Illinois said the same thing. When they castes their votes for Blago. Never assume things can’t get worse. They sure did that time. - Roadiepig - Thursday, Sep 18, 14 @ 1:05 pm: Anon at 12:52 was me. Sorry. - Demoralized - Thursday, Sep 18, 14 @ 1:08 pm: Restructure government? Ummm, Mr. Rauner, government isn’t a business. Why in the flippin world can Rauner not answer a single question? I’m beginning to think it isn’t just politics. I’m beginning to think it’s because he’s incredibly shallow and really doesn’t have a clue. ==He can’t possibly do any worse== Excellent reason to vote for somebody . . . they aren’t the other guy. Don’t ever say nothing can get worse. It can. And if Rauner’s fiscal plans for the state are any indication it will, indeed, get worse. - Lester Holts Mustache - Thursday, Sep 18, 14 @ 1:08 pm: Econ prof, I think a political science prof would remind you that even if Rauner does get elected, he is somehow going to have to convince Madigan and Cullerton to approve these “outside-the-box, unconventional thinking and ideas”. This ain’t vampire capitalism where Bruce can just say to his underlings “make it so”. Blasting them both in your attack ads isn’t going to help him perform his “radical shake up”, either. - Slow Down - Thursday, Sep 18, 14 @ 1:18 pm: I’ve worked a high level in state government and I’ve worked in a small business that was bought and sold in the private equity world twice. There is nothing even remotely similar about the two worlds and the manner in which things are accomplished. Nothing at all. - wordslinger - Thursday, Sep 18, 14 @ 1:19 pm: I’m not buying the suppositions on faith, either. The goals of Rauner’s private equity funds were to increase the value of the funds, not necessarily the success of the individual businesses that comprised the funds. In that world, there are plenty of examples of hostile takeovers, where you gain control of a company to chop it up — the sum of the parts is worth more than the whole. And, of course, there are bustouts, in which you milk a targeted company dry and then walk away. Good for the funds, which is the goal, not necessarily good for the businesses. - bored now - Thursday, Sep 18, 14 @ 1:52 pm: political history is littered with examples of politicians who thought they could bring this approach to tame government. the most famous example, of course, is herbert hoover. there’s a good chance that rauner thinks he invented this, even a better chance that he’s unaware of the history of failure with this approach to government. business is business. government is not. government doesn’t have customers, it has constituents. eventually, elected officials figure this out (doesn’t mean they chance their tune, just their definition of success)… - ZC - Thursday, Sep 18, 14 @ 1:53 pm: Setting aside the judgments, I think Moser nails the mindset. This also explains Rauner’s approach to campaigning - of course he is inspired by his GTCR days, how could he not be? The guys in Rauner’s position (this applied to Romney too) naturally go in and promise the moon - put us in charge and we’ll fix everything, make you a bundle etc. You basically say anything to close the deal. Then afterwards you open up the hood and see what’s underneath. The question as people note is whether this is a workable strategy when it comes to governing , as compared to private equity. - Precinct Captain - Thursday, Sep 18, 14 @ 2:11 pm: ==- econ prof - Thursday, Sep 18, 14 @ 12:20 pm:== How has Bruce Rauner NOT been part of the problem with his record of political payoffs and special favors? - WootBaseball - Thursday, Sep 18, 14 @ 2:32 pm: That’s nice. It doesn’t mean Rauner should be the next Gov. of IL. - truthteller - Thursday, Sep 18, 14 @ 2:42 pm: So if Rauner is elected, he’ll go out and find someone to run the State? I thought that was the Governor’s job and that was the office he’s running for - Anonymous - Thursday, Sep 18, 14 @ 2:57 pm: We cannot expect that Rauner will have the leadership and management skills that are required of the CEO of a complex organization. He doesn’t have that background or expertise. Rauner might well have sales, negotiation, executive recruitment, and financial skills that could be applied in the Gov’s role — though he has done little to convince us of the last one with his current “plans.” - walker - Thursday, Sep 18, 14 @ 3:11 pm: Anon. 2:57 above was me. [Microsoft tried to fix 8.1 again. I will be unfixing my laptop all day.] - sal-says - Thursday, Sep 18, 14 @ 4:03 pm: == Plus the Reserve deposit is refunded if you quit. At these prices, you’d be crazy not to join. Excellent point. == “Excellent point.” ??? Strikes me more as insulting. “…you’d be crazy not to join.” Yeah; I’d be lucky to get $140K for my house. I guess it’s only ‘an excellent point’ for 1%’ers; 0.1%’ers and .0.01%’ers, as Brucie claims to be. I’m guessing those that go to bed hungry every night and the homeless might not agree. - PolPal56 - Thursday, Sep 18, 14 @ 4:38 pm: It’s just dawned on me that a vote for Rauner may actually be a vote for Mike Madigan, who DOES know how to run a state. Now, that’s a thought that will send me screaming into the night… For Madigan it will be like taking candy from a baby. Don’t think that HE doesn’t have TWO sets of plans - one for a Quinn win and one for a Rauner win. If elected, Rauner will make the same mistake he’s made with this campaign (and which I made a warning comment or two here after the primary) - he let his opponent define him because he has refused to define himself. Since he has no plans, he will walk into office with a “planning to plan” mentality. Madigan will already be enacting his plans and always be two steps ahead of Rauner. Rauner will be one confused and frustrated governor. (Oh, he’ll, the thought of any of ‘em - PolPal56 - Thursday, Sep 18, 14 @ 4:45 pm: Oops, last line wasn’t meant to be there! Tip - don’t have a text conversation and post at the same time, especially while lying in bed recovering surgery, even if the pain med is low dose. Focus. LOL - Robo - Friday, Sep 19, 14 @ 8:58 am: Well, at least we know Rauner pays his bills. Sorry, comments for this post are now closed.