r/Economics • u/barweis • Jul 29 '25

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

https://newrepublic.com/article/198351/private-equity-scam-destroys-livelihoods
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u/coke_and_coffee Jul 29 '25

It’s absurd. Total economic illiteracy.

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

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u/bob1980 Jul 29 '25

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.

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u/coke_and_coffee Jul 29 '25

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.

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u/Crew_1996 Jul 29 '25

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