Private Equity Investors Rigging Economy, Driving Up Costs- Housing, Healthcare, Hospitals, More...

[appalachiablue]

- Robert Reich. Private equity is shutting out millions of people from buying their own homes. In 2021, private equity investors bought nearly 1 in 7 homes in top metro areas. This is essentially a direct transfer of wealth from the working class into the pockets of private equity managers. May 16, 2022.
_______
- 'Shady investors' in private equity are 'rigging the economy' & jacking up costs,' R. Reich, AlterNet, May 17, 2022. Ed.

Former US Sec. of Labor Robert Reich blasted private equity firms for their corrupt manipulation of the tax code. "Private equity firms are privately owned financial organizations. They make money from buying struggling companies with borrowed money, often using the companies’ assets as collateral for the loans. They then make the purchased company profitable by cutting wages, outsourcing jobs, & stripping assets. Then they resell what’s left of the company, often laden with debt, & pocket the returns."

The consequences of the financial industry's monied bonds to lawmakers have caused the costs of 2 critical commodities to skyrocket. Housing is No. 1. "Private equity has a hand in today’s skyrocketing housing costs. Private equity-backed real estate corporations are buying up both single-family homes & apartment bldgs. at record rates. In 2021, private equity investors bought nearly one in 7 homes in top US metro areas. They now own at least 260,000 homes across the country," & this, in turn, leads to "higher rent. Faster evictions. Punitive fees. Shoddier repairs & services, if anyone even shows up at all."

No. 2 is healthcare. "Over the past 2 decades, private equity in healthcare has exploded from $5 billion to over $100 billion a year, from buying hospitals to staffing emergency rooms to taking over nursing homes," Reich pointed out, citing a particularly egregious example. "TeamHealth, a staffing agency owned by Blackstone, charges about 5 times what Medicare charges in emergency rooms. TeamHealth & Envision, another private equity-owned physician staffing firm, are notorious for their use of surprise medical bills. Their doctors aren’t covered by insurance, so when a patient goes to an in-network hospital but is seen by a private equity doctor, the patient gets stuck with a surprise out-of-network bill"... https://www.alternet.org/2022/05/robert-reich-shady-private-equity/
_______
- 'The Smash-and-Grab Economy.' Private equity billionaires are looting the country, leaving everyday Americans to clean up the mess—and fight for the scraps. Mother Jones, May- June 2022 Issue. Ed.

Over the past 4 decades, private equity has become a powerful, and malignant, force in our daily lives. Mother Jones investigates the vulture capitalists chewing up and spitting out American businesses, the politicians enabling them, and the everyday people fighting back. After 16 years at the helm of Houdaille Industries, CEO Jerry Saltarelli want­ed out. Since 1941, he’d poured his heart and soul into the company, starting out as a young lawyer and moving up the executive ranks. As CEO, he’d helped the company transform from a manufacturer of bumpers and shock absorbers into a nationwide construction and machine tools conglomerate.
With the company on solid footing, he was ready to retire, but there was a problem. Houdaille—cash-rich and with minimal debt—was the kind of company in vogue with the corporate raiders of 1970s Wall Street, and the New York Times declared that a takeover might prove “irresistible.”...
https://www.motherjones.com/politics/2022/05/private-equity-buyout-kkr-houdaille/

[cilla4progress]

1. Smash and grab.

Exactly.

[appalachiablue]

2. Swallowing the world, the road to peonage...

[barbaraann]

3. Extremely terrifying and demoralizing. n/t

[CrispyQ]

4. We're on a bad trajectory on so many fronts.

It can be overwhelming. We don't seem to have the imagination to visualize just how drastically we are changing our environment.

[Permanut]

5. Wait, I thought it was President Biden's fault..

Fox news wouldn't lie about it, right?

[appalachiablue]

8. If Faux ever mentions this- yep, BIDEN DID IT!!

/S

[SWBTATTReg]

6. I did a quick add up, roughly $700 billion+ from these firms alone. If private, are these

'private' companies made up of multiple entities, lots of people who are investing into these equity firms? I suspect so, so not all of these proceeds are bad, at least the earnings are in theory, split up/divided up among the equity partners.

What also gets me is that when these companies strip off the assets, laden the remaining portion of these companies and sell them. Who's going to be stupid enough to not analyze the financial statements and find out that the assets aren't worth the payout demanded by the sellers, that is, due diligence here needs to be done.

Also, out of an estimated 80 million households (a number I've heard in the past), 260,000 households going to private equity doesn't sound like an awful number. Maybe I'm wrong (OPPS, I was wrong, there are 128+ million (millions) of households, Wow!!

[inthewind21]

7. Oh and hey

A LOT of these PE firms, are classified as "small business". Let that sink in when you hear the R's droning on about hurting "small business" and helping out small business.

[erronis]

9. Robert Reich is a national treasure. Thank you for posting appalaciablue.

While we all understood the demise of local papers because of inefficiencies and loss of advertising to the internet, we also thought that the internet would give us a more inclusive and open view of the world.

Whoops! The private equity groups and individuals control the biggest internet platforms. Inclusive only to what they want us to see.

[alwaysinasnit]

10. K&R Excellent post.

[Auggie]

11. Biggest threat to the planet IMO

[XanaDUer2]

12. What can be done? Nt

[Auggie]

14. Elect politicians of integrity ... for starters

[SheltieLover]

13. This needs to stop!