Bad Company: Private Equity and the Death of the American Dream

Bad Company: Private Equity and the Death of the American Dream by Megan Greenwell

This is a "make you mad at private equity" book. It provides a few examples of private equity in low income apartments (in D.C. area), retail (Toys 'R Us), newspapers and rural hospitals (in Wyoming). It is easy to get mad and worked up about the cases. However, it feels like part of the story is missing.  All of these industries were distressed in some way. Did private equity just change the timelines for failure? Private Equity firms are big and seem to take advantage of a number of regulatory loopholes. However, most of the "solutions" advocated simply entrench them more in power. (See the case of healthcare that has become more and more expensive, consolidated and regulated at the same time.)

The book ends with some success cases. The Toys 'R Us workers were able to get a little bit of severance. A group in rural Riverton, Wyoming was able to get funding to open a new hospital. Though I do need to wonder how it will pan out? Will the deep pocketed hospital may be challenging. Would they just operate at a loss to kill the competitor, and then go back? The case of the housing is also challenging. Rent control is nice for those that get it. But it doesn't help those that still don't have a place to live. Renter unions may seem nice, but the problems spread across housing types. In Seattle, Bellweather housing is a nonprofit provider of affordable housing. Yet residents have a tenants union and have demanded better maintenance, security and keeping promises made to residents. Private equity may come in to real estate to earn money, but the problems are deeper. Enabling more 3-flats and other small multi-unit housing would make home ownership more affordable. However, we may be eliminating this path by creating universal rental regulations. A business with thousands of units can afford to deal with a few scofflaws, but a small time landlord will take a much greater hit.