Private equity refers to a type of investment that involves buying and selling companies, with the goal of generating a return on investment for the private equity firm and its investors.
The narrative that private equity likes to tell is that they buy struggling companies, fix them and then sell them off at a profit.
This isn’t the norm. What typically happens is a private equity firm targets a healthy profitable company, borrows money to buy it, saddles that company with the debt and then cuts costs, lays off worker, slashes benefits—all while reducing services and raising prices while also selling the company’s assets. All of this in order to pay a fattened return to the investors.
This process takes a toll on the economy and is harmful to the workers and the overall community.
Private equity is a major driver of the enormous gulf between rich and poor in America. It’s a major reason why the local newspaper is laying off reporters, why health care is so expensive, why once successful retailers are boarded up and why some nursing homes are more deadly than others.
We are all worse off because of private equity. “These are the Plunderers” exposes the greed and pillaging in private equity, revealing the many ways these billionaires have bled the economy, and, in turn, the American people.
Guests:
Gretchen Morgenson is a senior financial reporter at NBC,
Joshua Rosner, is a financial policy analyst,
Morgenson and Rosner are co-authors of the new book, “These Are the Plunderers: How Private Equity Runs — and Wrecks — America.”
"The Source" is a live call-in program airing Mondays through Thursdays from 12-1 p.m. Leave a message before the program at (210) 615-8982. During the live show, call 833-877-8255, email thesource@tpr.org or tweet@TPRSource.
*This interview will be recorded on Monday, May 1.
