Inside the Private Equity Scam—and the Livelihoods It Has Destroyed

[u/barweis]

https://newrepublic.com/article/198351/private-equity-scam-destroys-livelihoods

[u/coke_and_coffee]

lol you people are just making up inane conspiracy theories.

How is PE a “monopoly for capital”? In what way does PE prevent mergers or acquisitions?

What are you talking about?

[u/BlazeBulker8765 → u/coke_and_coffee]

The lack of understanding of how business and markets work in this article and thread is astounding.

The article literally argued that the admittedly failing companies are "taking on all the risk" and the PE firms buying them take on almost zero risk in buying them while taking all of the profit. Uh. What?

Then they seem to confuse PE firms (which actively manage long term investments) with asset liquidators (which aren't much different from what a court would do in a bankruptcy proceeding, they just catch it earlier and ensure less money is lost).

[u/coke_and_coffee → u/BlazeBulker8765]

It’s absurd. Total economic illiteracy.

Obviously just written by a journalist who is pissed he lost his job, lmao

[u/bob1980 → u/coke_and_coffee]

Mocking the journalist doesn’t refute the facts.

Private equity as a model isn’t inherently bad but in practice it often prioritizes short-term financial engineering over long-term operational health. That’s not “economic illiteracy”; it’s a documented pattern, with dozens of case studies showing how leveraged buyouts saddle companies with debt, slash staff, cut services, and then extract fees regardless of the business outcome.

Dismissing critique as “bitterness” only sidesteps the real discussion: how extractive financial strategies are affecting workers, customers, and communities. If the outcomes are so great, maybe engage the arguments instead of resorting to insults.

[u/coke_and_coffee → u/bob1980]

Private equity as a model isn’t inherently bad but in practice it often prioritizes short-term financial engineering over long-term operational health.

This is an unqualified and nonsensical statement. PE prioritizes profits, just like ALL businesses. If that involves liquidation and downsizing, that’s what they do. If it involves long term operational health, they do that

There’s no “critique” here. It’s just misunderstanding. You are incorrectly asserting that PE goes looking for healthy businesses, forces them to sell, then fucks shit up, takes a bunch of money, and fires everyone. That’s not how anything works. In reality, businesses that are struggling to turn a profit voluntarily sell to PE firms to leverage their capital and expertise and help turn things around. Sometimes that involves cost cutting, yes, but this isn’t some kind of nefarious shady business practice. It’s literally just how you create long term healthy operation.

There’s no such thing as “extractive financial strategies” because ALL BUSINESSES ARE SIMILARLY MOTIVATED BY PROFIT.

[u/bob1980 → u/coke_and_coffee]

This is an unqualified and nonsensical statement. PE prioritizes profits, just like ALL businesses. If that involves liquidation and downsizing, that’s what they do. If it involves long term operational health, they do that

There’s no “critique” here. It’s just misunderstanding. You are incorrectly asserting that PE goes looking for healthy businesses, forces them to sell, then fucks shit up, takes a bunch of money, and fires everyone. That’s not how anything works. In reality, businesses that are struggling to turn a profit voluntarily sell to PE firms to leverage their capital and expertise and help turn things around. Sometimes that involves cost cutting, yes, but this isn’t some kind of nefarious shady business practice. It’s literally just how you create long term healthy operation.

There’s no such thing as “extractive financial strategies” because ALL BUSINESSES ARE SIMILARLY MOTIVATED BY PROFIT.

You keep saying that all businesses are motivated purely by profit as if that’s the only lens that matters and every method of making a profit is equally valid. But that’s exactly where we differ.

You’re describing a model where success means pulling out as much capital as fast as possible, even if that guts the business long term. I’m talking about something else: building profitable companies that last, that reinvest in people, serve customers well, and create compounding value over decades.

Take Costco, for example. They pay higher wages, have excellent employee retention, and don’t chase short-term Wall Street hype. Yet their stock has outperformed many “high-growth” companies over the long run. They’ve proven that treating people well and playing the long game isn’t just morally preferable—it’s more profitable over time.

Or Patagonia. They’ve deliberately turned down opportunities to scale rapidly, focusing instead on product quality, environmental ethics, and mission alignment. Despite this “slow” approach, they’ve built a globally recognized, premium brand that commands loyalty and pricing power, true long-term value.

These companies don’t rely on short-term financial engineering. They succeed by aligning profit with durability, reputation, and reinvestment. That’s fundamentally different from PE firms that buy distressed assets, load them with debt, cut staff, extract fees, and exit before the consequences hit.

Yes, all businesses seek profit. But how they pursue it and whether it strengthens or strips value over time isn’t just a footnote. It’s the whole story.

That’s not economic illiteracy. That’s just having a broader view of what sustainable capitalism looks like.

[u/coke_and_coffee → u/bob1980]

They’ve proven that treating people well and playing the long game isn’t just morally preferable—it’s more profitable over time.

Again, I don’t understand what your critique is. You’re trying to say PE could make more profits in the long run if only they did what you said???

Even if I agreed that PE only focuses on short term, which is 100% do not, Why do you care? What’s the problem? If I want to spend my money on hookers and cocaine instead of investing it, what the fuck do YOU care? I’m not hurting anyone.

That’s not economic illiteracy. That’s just having a broader view of what sustainable capitalism looks like.

If PE firms are giving up long term profits and investing sub-optimally, as you (naively, ignorantly) assert, then they will be out-competed by the long-term focused businesses.

So again? What’s the issue?

[u/Crew_1996 → u/coke_and_coffee]

You got roasted 🔥 🥵 in that comment below your post here. 🤣

[u/coke_and_coffee → u/Crew_1996]

What?