Inside Washington's Headlines

by Michael Granger

Ark Capital Management Fund
Capital Access Forum

Special January 2009 Inauguration Issue


Legislative insight

Political intelligence













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Hope mingled with fear

Barack Obama's election as president of the United States marks a new epoch in the country's history. Hard work, desire, personality and, yes, luck threw him in the path of mainstream presidential politics and indeed in the path of destiny.

Normally we wait at least a generation to place historical markers on a period or person, but this one is intuitive. It is an occasion that even forces us to ask if there is a precedent in history for an event of this character and magnitude. Spartacus did not become emperor of Rome; Tsar Alexander II of Russia was not succeeded by a serf; and Barack Obama is not a descendent of slaves and is bi-racial. It is not the consecration of humanity and it does not rank with the American Revolution or World War II. But the enormity of this event cannot escape us. Added to the quantum leap it represents, is the fact that he succeeded a dynasty. President Bush graciously said, “Barack Obama came out of nowhere and was elected President of the United States; it is exciting.”

What Obama is and is not

But before we start projecting onto him something he is not, let us see what he is going to do and how he is going to perform. We have seen him on the political stage, but scant insights into his true personality have been revealed. He has already pleasantly surprised a significantly large percentage of the American populace with his cabinet choices, but not without a price.

To begin with, his election has created a lot of tension for his supporters and opponents alike. This tension pertains to fear of the unknown. So little is known about him by his supporters and opponents that it is anyone’s guess how he will govern. Although his cabinet picks and his invitation to Reverend Rick to give the invocation hint that he will try to govern from the center, by doing so he might end up pleasing no one: not right enough for the right and not left enough for the left, yielding no true political identity.

Years from now we hope the narrative of our epoch will read as follows: In the midst of wars in Central Asia and the Middle East, economic calamity struck the United States to the very core of its foundation. It threatened to end life as Americans had known it for the decades since World War II; an ever growing economy and an ever increasing standard of living. With a new government elected in 2008, with America’s first president of African descent, the fear brought on by the economic downturn mingled with hope. The new government quickly arrested the economic downturn and within two years brought life back to normal again.

Michael Granger is General Partner and Co-Founder of Ark Capital Management Fund, L.P., a Chicago-based private equity firm with a national investment scope, focusing on middle market companies. He is also Co-Managing Partner and Co-Founder of Ark-Private Equity Partners, LLC, a private equity firm focused on small company buyouts.

Mr. Granger's areas of expertise include private equity investments, analysis of technology companies, buyouts, and growth acquisition transactions. Mr. Granger has been an active private equity professional for the past two decades, focusing on acquisitions for investment purposes and integration of businesses. In 1985 Granger began his private equity investment career at CIGNA Venture Capital, Inc. - the venture capital subsidiary of CIGNA Investments, Inc.

Following CIGNA, he served as Investment Manager for Xerox Venture Capital, an early stage technology investment firm making strategic and financial investments on behalf of Xerox Corporation. In 1991, he co-founded Ark Capital Management. Prior to entering the private equity industry, he worked in the Bell System, AT&T, as Manager in the Special Services, Digital Data Group. He also served four years of active duty in the U.S. Marine Corps during the Vietnam era.

Granger earned his Bachelor of Science degree in electrical engineering from the University of Massachusetts in 1982 and an MBA from Dartmouth College's Amos Tuck School of Business Administration in 1985.

He is also Founder and Chairman of the Capital Access Forum, a Chicago-based company designed to improve access to capital for emerging entrepreneurs. Under his leadership, the Forum has had four successful conferences, bringing private equity firms and entrepreneurial companies together. His publications include: Case Study on Hospital Management Companies; an editorial piece in the Wall Street Journal on Capital Gains Tax Reduction; and a Study on Venture Capital Opportunities in the Telecommunication Industry (Tuck Today Magazine). In addition to serving on a White-House panel of industry leaders convened by the President's Chief Economic Advisors, Granger has also actively participated in numerous other boards and commissions.

He is among the earliest supporters of President-elect Barack Obama.

It would be great to have a happy ending, but the prevailing mood in the United States today can only be described as one of intense fear. And while most of the time people are known to fear the unknown, it is also fear of the known that so heavily weighs on the American mind. They fear the personal implications of an economy in a downward spiral: loss of job, home and standard of living, and even a way of life. It is palpable because it is all around them.

Most disconcerting to them, after watching conventional remedies like tax cuts and stimulus packages flop one after the other, is the feeling that government does not have the answer. They have come to that realization not overnight, but by degrees as they watched the Dow Jones Industrial Average plummet and unemployment rise precipitously.

They see Congress grasping for solutions and a leadership vacuum in the country. Industry is not asserting itself because it is back on its heels and the people who run the government are having difficulty inspiring confidence. Not even the collective body seems to be able to impose its will on the economy. But somehow, the people think that Obama might be able to impose his will on history.

To be certain, the unknown is playing on American minds. As they see the economy crumble, they wonder what is next. The great depression of the 1920s and 1930s is close enough in history to be a relevant comparison as they contemplate what could happen next.

A very American notion: We can do it together

But in the midst of this fear and despair people seem to be remarkably hopeful about the impending transfer of power. They seem to feel that Obama's fresh integrity and willingness to reach for bold solutions to turn things around will offer relief. That confidence seems in part to be due to Obama's unifying approach: the idea that if the country can come together we can solve any problem, not the least of which is our economic problem. That singularity of American unity has always played the lead role in achieving victory over any crisis or foe.

Most of us have seen disunity in our lifetimes, the most prominent examples being Vietnam and Iraq. We also know unity in World War II and with the Afghanistan War, pre-Iraq. President-elect Obama has hinted at major steps he might take to solve our economic problems, but on the eve of the transfer of power, unity is the only explicable reason for optimism: the notion that we can face down any problem, be it great or small, together.


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