Since the ‘70’s the US government has given more and more shelter and leeway to private equity firms, which increasingly buy up and devour healthy companies, diverting the efforts of hard-working Americans to their executive’s and shareholder’s pockets.  They do this through a number of schemes, including borrowing huge sums against the health of the business they’re buying, and instead of using it for growth, they force the business to pay the loan off with its profits (that’s the “Leveraged Buyout” part, or LBO).  They also take advantage of tax perks available only to rich firms and companies, fire employees by the hundreds or thousands, cut or cease any research and development, downgrade to inferior practices and materials, and charge ridiculous “management,” fees, which don’t decrease as the company is run into the ground.  Once that acquisition is no longer able to pay its bills to the Private Equity firm, they chop it up and sell it for scrap to the highest bidder, all the while claiming losses for huge tax breaks on a healthy company they intentionally gutted.

Once upon a time, private equity was known more for focusing on acquiring businesses that were already deep underwater, sometimes scrapping them, sometimes saving them.  In either case, an arguably healthy contribution to the economy (hey…the world needs scavengers too).

Now, however, thanks in part to the repeal of the depression era Glass-Steagall Act, which private equity lobbied congress to get rid of in 1999, commercial banks are no longer restricted from the risky loans and investments that help predatory private equity pillage America’s healthy companies.  To make matters even worse, the Dodd-Frank Act was supposed to protect Americans from predatory lending after the 2008 financial collapse, but it also provided an additional shield to private equity by allowing their financial reporting to remain confidential.