How private equity conquered America | The Chris Hedges Report
The Real News Network・26 minutes read
Private equity firms like Apollo, Blackstone, the Carlyle Group, and Kohlberg Kravis Roberts are accused of buying and plundering businesses, leading to increased deaths in nursing homes and hospitals, medical debt, and financial harm in communities. Executives such as Leon Black, Henry Kravis, Stephen Schwarzman, and David Rubenstein have amassed billions through these practices, contributing to the widening wealth gap and unsustainable economic disparities in the country.
Insights
- Private equity firms like Apollo, Blackstone, Carlyle Group, and Kohlberg Kravis Roberts engage in practices that involve acquiring businesses, burdening them with debt, cutting staff, and leading to bankruptcies, enriching executives like Leon Black and Henry Kravis significantly.
- Private equity ownership of essential services like nursing homes and hospitals has resulted in increased deaths, staffing shortages, and financial harm to individuals and communities, with these firms benefiting from tax advantages, lobbying efforts, and political influence that perpetuate these detrimental practices.
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Recent questions
What are the accusations against private equity firms?
Private equity firms are accused of buying businesses, piling on debt, cutting staff, and driving companies into bankruptcy, leading to financial harm and job losses.
How do private equity firms impact healthcare services?
Private equity ownership of nursing homes and hospitals has resulted in staffing shortages, reduced care compliance, and increased deaths, contributing to a health crisis with unexpected hospital deaths or injuries.
Why are private equity firms criticized for their financial practices?
Private equity firms are criticized for stripping assets from acquired companies, closing hospitals, cutting back on vital medical devices, and contributing to medical debt for Americans through emergency room visits, leading to layoffs and pension depletions.
How do private equity firms generate profits?
Private equity firms raise money for buyouts, strip assets from acquired companies, sell physical assets like real estate, overcharge for services, charge management fees, and benefit from favorable tax laws, generating billions of dollars while paying lower tax rates.
What are the consequences of private equity deals on communities?
Private equity deals lead to disappearing tax bases, increased deaths in nursing homes, depleted pensions, financial insecurity, job losses, reduced pensions, increased costs for taxpayers, and a widening wealth gap, disproportionately harming the working poor and lower working class.
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Summary
00:00
Private Equity Firms: Profit at Any Cost
- Private equity firms like Apollo, Blackstone, the Carlyle Group, and Kohlberg Kravis Roberts are accused of buying and plundering businesses by piling on debt, cutting staff, and driving companies into bankruptcy.
- Executives such as Leon Black, Henry Kravis, Stephen Schwarzman, and David Rubenstein have amassed billions of dollars through these practices.
- Private equity ownership of nursing homes has led to a 10% increase in deaths due to staffing shortages and reduced care compliance.
- Private equity firms have also taken over hospitals, contributing to a health crisis with nursing shortages causing one in four unexpected hospital deaths or injuries.
- The US healthcare system has seen a reduction in hospital beds from 1.5 million in 1975 to around 925,000 beds for a population of over 330 million, leading to medical debt for 56% of Americans.
- Private equity firms have closed hospitals, cut back on vital medical devices, and contributed to medical debt for 44% of Americans through emergency room visits.
- Private equity firms operate by raising money for buyouts from public pensions and institutional investors, focusing on stripping assets from acquired companies to make a profit.
- Private equity firms often sell physical assets like real estate from acquired companies, leading to increased operating costs, layoffs, and pension depletions.
- Private equity firms like Carlyle Group have been accused of overcharging Medicare for services in nursing homes, leading to bankruptcy and Medicare fraud.
- Private equity firms generate billions of dollars through management fees, often charging pension funds for services while impoverishing others and operating in secrecy to hide their practices.
17:06
Private Equity Firms: Tax Benefits and Exploitation
- Owners should be identified, such as Carlyle nursing home or Blackstone donut shop, to know who is in charge and where your money goes.
- Private equity firms benefit from favorable tax laws, paying lower tax rates than regular citizens, leading to billions in profits while the government loses out on tax revenue.
- Kyrsten Sinema received $1.5 million from private equity to maintain the carried interest tax treatment, preventing changes that would make them pay their fair share of taxes.
- Private equity firms lobby extensively to maintain favorable tax laws, avoid taxes on billions in gains, and benefit from government investments while paying lower tax rates.
- Private equity individuals control and influence politicians, with examples like Jay Powell, the head of the Federal Reserve Board, who was a former Carlyle executive.
- Envision, owned by KKR, exploited emergency departments to charge patients separately, leading to Congress curbing the practice and Envision going bankrupt.
- Apollo bought Noranda Aluminum, loaded it with debt, extracted their money, made three times their investment, and caused the company to go bankrupt, harming workers, pensioners, and taxpayers.
- Private equity firms collude to avoid competition in acquisitions, leading to lower prices for shareholders and less competition in the market.
- Private equity firms target essential services like water utilities, such as KKR buying Bayonne's water system, exploiting the necessity of these services for profit.
- Privatization of essential services by private equity firms, like water utilities, often leads to exploitation and financial harm to communities, as seen in Bayonne, New Jersey.
34:53
"Private Water Systems Drive Economic Disparities"
- Privately-owned water systems in the US have 60% higher annual bills compared to publicly-owned systems, with low-income households spending 1.55% more of their income on water.
- The wealth gap in the country is expanding due to unregulated capitalism, leading to billionaires extracting money from the middle class and poor, causing unsustainable economic disparities.
- The impact of private equity deals on communities includes disappearing tax bases, increased deaths in nursing homes, depleted pensions, and overall financial insecurity for individuals.
- The complexity and secrecy of financial dealings by financiers contribute to job losses, reduced pensions, increased costs for taxpayers, and a general sense of unease about financial futures.
- Private equity practices, including surprise medical bills and predatory financial actions, disproportionately harm the working poor and lower working class, with political consequences due to their influence on the political class.
