Liberal YouTubers
Related: About this forumSen. Elizabeth Warren: How Private Equity Gutted Local Malls: Joann Fabrics, Red Lobster, Claire's, and More.
UpInArms
(55,399 posts)As long as this is allowed to happen, eventually there will be nowhere to go but the company store
erronis
(24,554 posts)Branding and a cut of every transaction.
hlthe2b
(114,720 posts)Buying them up and you will have no options except to pay exorbitant prices that insurance will likely not cover fully or without a major deductible. And, even if professional staff (physicians, veterinarians, dentists) do not agree with the corporation's enforced diagnostic and treatment standard policies, they will have little choice except to quit.
WSHazel
(834 posts)Steward hospitals was formed by Cerberus, who saved several failing hospitals to create that company. Cerberus then exited the investment to a private investment group (different from a PE firm), that ran the company off a cliff after Cerberus had exited. Warren blamed the PE anyway.
hlthe2b
(114,720 posts)Did you contact her office to correct her impression of this instance? Don't assume others did. Warren is very responsive, I have found via her office staff--even to nonresidents like me.
That you say "also untrue" suggests you believe the point she has made (and I as well) about PE devastating effects to communities and health care in general is not true. I can assure you it IS and am disturbed by that comment, despite your example of one erroneous episode she sites.
Permanut
(8,581 posts)WSHazel
(834 posts)1) It is really hard to make money on a company that goes bankrupt. The PE firms actually lost money on Toys R Us as defined by not recovering all of the investment they made into the company.
2) If a big box toy store was such a good idea, they would be everywhere. It is fair to criticize Bain and KKR for investing in the deal in the first place, but they are not the reason the company went under.
3) What would be the incentive of any business owner to invest in their own business if the government outlawed pooled funds from buying or investing in a company?
While I generally agree with her, Senator Warren gets on my nerves with these attacks on PE firms. PE firms are a big net positive for the economy, and for employees. PE firms spread ownership much further down the org chart than family businesses, who generally share almost no ownership with employees. It is worth noting that Warren has never proposed an alternative owner for private businesses.
erronis
(24,554 posts)Festivito
(13,920 posts)A once diversified portfolio becomes a retirement fund solely in the same company's stock.
The new chief officers are paid high salaries.
Some internal offices are consolidated and now overworked. Saves money though.
The new officers walk away before things implode. They walk away with a better diversified portfolio in their name. And the salaries they collected.
The company goes bankrupt and the retirement funds are gone. The United States government uses tax dollars to give the retirees. A minimal payout.
The banks write off the losses on their taxes. Thus increasing burden on taxpayers.
Hard to make money? Hardly!
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