On paper it makes perfect sense. People with money to invest pool their funds and use it to make larger purchases than they could individually. With savvy selection profits can be made for business revenue or increasing a company’s performance to illicit a higher seller price. I love everything about it.
But of course thats not what it does in reality anymore, if it ever did. Today they identify vulnerable businesses that have valuable assets and buy them using a majority of funds being borrowed and paddling the company with that debt. Then they extract cash for as long as possible as a sort of dividend until they becomes untenable at which point the assets get sold. The end result is far to often the company’s go under and the employees, vendors, creditors, and retires lose while the pe firm banks a net profit and moves on.
How and why do we let this happen? It’s of no benefit to society, the economy, or the majority of humans. We could simply pass laws making these deals illegal. I bet you think thats a fine idea. So why doesn’t that happen? If our government works for us (R or D) the people it should take 2 days to fix this. It’s because politicians for the most part work for the rich and powerful. It’s because we have a system that gives them every reason to want to work for the rich and powerful. They need big donors and friends of big donors and (like any human) they don’t want powerful people making their life hell.
If we can’t get people who have the system to work in that changes this we either need new people, new systems, or more likely both. The chances of the rich and powerful agreeing to that with a smile and a handshake are somewhere between zero and go fuck yourself. They’ll only do it if the fear of the alternative is worse, probably much worse.
Thank you and as always,
Eat the rich