Can someone steelman private equity, please? I'm honestly looking for the upsides (for non-investors) of when PE moves into an industry like medicine and begins buying up businesses that traditionally aren't already large chains.
I already hear the downsides frequently from someone whose work is directly affected.
Private equity just means controlling a company outside of the public stock markets, it is incredibly broad, and covers everything from blackrock buying every vets office in an area, to a plumber buying out another plumber when they want to retire.
The steelman argument is that private equity is just property rights. If I build a business I get to decide what to do with it.
What most people are arguing against is a specific kind of PE where an institutional investor will either use aggressive financial engineering to force a profit, even if it kills the business, or when those same investors aggregate market share to the point where it is detrimental to consumers. Sprinkle in a little bit of heartless MBA bullshit, and that is what people specifically don’t like.
A stronger steelman is that it results in resources getting allocated in smarter/healthier ways across society.
If there's some business that's getting by but the land it's on is more valuable (e.g. for housing) than the business, some investors buy the business, sell the land, make the business account for the land value, wind the business down if it can't, and there are apartments there a few years later.
Berkshire Hathaway is in some sense also PE (though done by a public company that you can invest in) and Warren Buffett's culture is to find great companies run by great managers and let them cook. That long-term view is the exception and not the rule though.
In medicine, it's a solution for someone who wants liquidity (buy kids new home, help local dog shelter, add a new mistress) and doesn't want to retire, yet.
The problem is that the terms are custom and YMMV as an existing patient of said practice.
I think that "everyone should be able to do what they want with their own property", per se, is not a good principle for society. Sometimes people should not be allowed to do what they want with their property. In particular, I think the more property a person has, the less freedom they should have to do what they want with it. (This can also take the form of "the amount of property a person can own should be limited".)
I was speaking in generalities, if that wasn't extremely obvious.
Obviously, yes, people are - and should be - constrained in what they can do with their property. Even the most capitalist systems on earth place restrictions on property. I didn't think it was necessary to caveat that control of private property is not absolute or without consequences. I'm not aware of any capitalist systems that do not put greater protections on people that control large amounts of property (see monopoly, environmental, antitrust, public securities law, etc. Most of those are basically irrelevant to people who don't own large amounts of property).
The point is that for property to mean anything at all, an owner must be allowed to direct the use of that property. What's the point of owning a house if I can't make any decisions about what to do with it. I don't really own a house if I can't decide that I want to live in it, or to sell it.
Yes, but what if you own 100 houses? I'm pretty sure there is some number N of houses (or total value of houses) where I would be fine telling the person, "You don't get to decide what to do with these houses anymore, they're going to be given to people who need houses." Not as a matter of antitrust or monopoly but just directly as a matter of an individual controlling too much wealth.
Aside from that, once you admit that there can be restrictions on property rights, it's unclear how property rights in and of themselves is a steelman of private equity. Why not just say that "you can't sell to private equity" is one of the restrictions? Or, perhaps more subtly, why not say that a private equity company of a certain size is not allowed to buy any additional company, independent of what rights that company's owner has to sell?
There is a lot of stuff you're saying here that sounds simple but isn't.
...once you admit that there can be restrictions on property rights, it's unclear how property rights in and of themselves is a steelman of private equity. Why not just say that "you can't sell to private equity" is one of the restrictions?
What do you think that would look like in practice? Private equity is investment in non-public companies -- the purchase of shares in non-public companies or the purchase of the companies outright. In many cases, the private equity firms themselves are public; but in many cases, they are private, as well.
There isn't a way to make a rule that "you can't sell to private equity" but there can be a rule like "you can't sell a private company at all" or "public investment funds can not purchase shares in private companies" -- if you try a few of the variations that are possible, you'll see that they're all bad rules, I think.
You really have to think about hard about what you mean by "a private equity company". It's not as easy as it looks. If a manufacturing firm starts to buy up suppliers (many of which are small, private entities), is it a private equity company? It's buying up non-public companies.
My point with these arguments is just to say that private property rights are not a steelman for private equity. I'm not saying that these are simple answers to the claim that we need private equity, I'm just saying that the concept of private property is also not a simple answer to the claim that we don't need private equity.
That said, I agree with you to some extent. I think it's not actually so hard to define what I think is bad about private equity, but it's true that that badness is not confined to private equity. In particular I think the distinction between public and private companies is almost entirely meaningless; what we should care about is what companies do, whether they are publicly traded or not. From that perspective private equity is not really different from publicly traded "holding companies" that do basically the same thing.
The crux of it, for me, is companies that are just doing "the business of business", and are not organized around human beings doing things that they genuinely care about and want to do a good job at. You can never run a good company by trying to run "a company", rather than trying to run a steakhouse, or a pet groomer, or a bank, or a car wash, or some particular company that does a particular thing. The problem of both private equity and public "holding companies" is that they value money to the point that they no longer sufficiently value the actual substance of the good or service that the business provides.
Easy to imagine practices where the primary owner is going to retire and looking for an out.
Maybe they find a buyer in a doctor, maybe they don't, but PE provides them an exit that keeps the practice operating in the community.
Many people don't really run businesses efficiently. There was an interesting video I saw recently where a sole doctor practice made a few changes to their workflow that allowed them to hire more doctors and handle 2x as many people - I would expect a PE firm would pursue similar changes that help increase the number of people they can service, increasing competitiveness and lowering prices in the long run.
I don't know how these tradeoffs interact with patient care, but I wouldn't inherently expect PE to be worse at this than any other operating model.
Lots of other efficiencies to look at. Tons of them are directly bad for the patient (capturing more of the surplus is an efficiency that businesses generally go hard at).
Ultimately, I think the issue is when people making decisions are able to treat the impact as an abstraction.
> Many people don't really run businesses efficiently.
In many cases that's a good thing, depending on what we mean by efficient. Lots of people run businesses in ways that make less money than they could, and often that's good.
> I don't know how these tradeoffs interact with patient care, but I wouldn't inherently expect PE to be worse at this than any other operating model.
Doesn't the evidence suggest it is indeed often worse?
A structure to run business efficiently using practiced methods is always a good thing. However from what little I have understood, the goal of Private Equity is to maximize the dollar value on their investment. Somehow they have settled with the playbook that running a business even profitably isn't the best idea. Instead its much more profitable to take over the struggling business at good price, squeeze everything possible from the assets (thats where PE seem to be investing their expertise unfortunately) over duration of time. Update the books in a manner that it saves money on taxes and carry forwards the loss, making money in the process.
My favorite is to sell the building(s) to their private real estate company and lease back. Then IPO the company and keep the rent coming on a 25 year lease.
>> Maybe they find a buyer in a doctor, maybe they don't, but PE provides them an exit that keeps the practice operating in the community.
If the practice is to continue, there must still be practitioners working there. Id prefer they buy out the one retiring, but the retiree can sell to whoever they want.
Why do you need to sell a private practice? There’s no brand to sell, it’s just you and that will be gone.
PE is scourge in this space. They’ve probably taken over every dental office already and now they push unnecessary procedures and whatever your insurance will bear just because.
Most private practices are small groups, not individuals. It absolutely sucks to have to find a new doctor who’s a good fit for you, when you’ve been seeing the same person for years or even decades. Usually when your doctor retires you rely on them to make a recommendation for a replacement. Usually that’s another partner in their same practice. At the very least, you (historically) expect them to sell the practice to someone they think is a worthy successor. Patients are fairly sticky.
And many of these PE sales require the selling partner to stay on for at least a year or two to ease the patients through the transition and so the patients get used to the changes before the doctor actually retires. That way, sticking around after the doctor retires doesn’t feel like such an upheaval.
If there is truly nothing as you say, there is nothing for PE to buy, and no problem. If there is nothing to sell of value, what stops new dentists from seamlessly opening an office?
Maybe in your neck of the woods vets operate out of the trunk of their cars, but all the ones I've ever engaged had offices, expensive medical equipment, an office building, and trained staff.
Person B has a pile of money and thinks that that business is (or can be) a good investment.
That's it.
So, what happens if person A is prohibited from selling their business? Are they forced to keep working because they don't have enough other savings to retire on? Do they shut the business down in order to retire? Something else?
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Calls to ban private equity are attempts to play "shoot the messenger".
Sell the assets maybe, potentially to somebody who wants to use them to run the same kind of business in the same kind of location with the same employees.
It's hostile to the consumer to call it the same business. A name change gives them the opportunity to decide for themselves whether the new owner is worth supporting. It's similarly hostile to the employees to assume that their loyalties can be bought and sold. Let the new owner of the assets re-hire them for the same position in the same location if he wants to, but lets not have them be for sale.
I think that last point is opposite; it’s seen as heartless when the new owner of a business goes through rehiring existing employees instead of assuring them they still have a job.
Isn't offering them a job that's equivalent to their old one indistinguishable from assuring them that they still have a job? No need to make people reinterview, but at least give them the option to turn down the offer.
Maybe I'm making too big of a deal out of semantics, but every time somebody buys me it makes me angry.
I don't think it's equivalent because it's paperwork they now have to think about, they're wondering if it's wiping away old employment promises or systems, did everyone get one of these offers, etc.
Definitely see how some would prefer the job reconsidered, though. There's no system that makes everyone happy, including to never sell a business.
These things are good to think about; appreciate it.
May be categorizing the different private equities can be helpful here. A PE interested and invested for growth is always the best outcome. A PE only looking to salvage and squeeze is that gives the bad branding to PE.
> A PE interested and invested for growth is always the best outcome.
(Throwaway) I work at a top ~10 PE.
This is what we do. One portfolio company has a product on old tech. We bring in a product team, a CTO, internal tech teams. Help shape a roadmap to tackle the most egregious tech and product debt so teams can move faster. Fix non-existent or outdated pricing strategy that has not evolved with the industry. Fix, grow, or evolve GTM to reach new customers. Help bring fresh leadership resources in when needed.
Industry is typically "boring" and systems are valuable, but aging. We invest, modernize, and try to grow new rev streams, new customers. Portfolio is SaaS focused (can't speak for those that invest in real estate and healthcare).
The employees of the PE also co-invest so everyone is aligned to help the portfolio companies grow and exit. This is a multiyear process.
I'm going to side-track a bit, but since I'm being courted by PE I thought I'd ask.
>> The employees of the PE also co-invest
Is this voluntary, or mandatory?
I ask because I've seen clauses along the lines of "75% of bonuses are paid in shares, not available for sale for 5 years."
Using bonus money to buy shares props up the share price, but delays the employee actually seeing the bonus for 5 years. Seems pretty win-lose to me, and kinda puts me off.
Is this a standard practice you mean by co-invest?
(As an aside, I'm not a fan of buying shares where I work, that's not a good portfolio-diversification model. If the business goes under it's not good to lose both your job, and investments, on the same day.)
There is carry and co-invest. Carry is a grant (like options). Co-invest is additional funds that you commit for capital calls when the fund invests. My comp is base + cash bonus (1.#x base) + carry (~2/3 of my base every year for 10 years).
Yes, locked away until some distribution event. Bonus is cash (YMMV), but if you don't already have the capital for a capital call, you're right that your bonus effectively ends up in the fund to meet capital call requirements at some point.
Co-invest is "strongly recommended at the amount specified". Legally, they cannot compel you to, but basically the way it is worded...
Should you co-invest? Look at CalPers for realistic rate of returns. Look at the PE portfolio; do you think it holds? Ask them to walk you through a case study of their timeline with a successful portfolio co. CalPers is not playing around. Some funds will 3x, 4x over the lifetime (historical performance not indicative of future perf). You pay capital gains tax on that earning.
Best case: you already have the cash to cover the co-invest capital calls. Worst case: you are borrowing money or using your bonus to plow more into the portfolio.
Naming couple companies that you acquired for whom you changed the trajectory would be a lot stronger signal without revealing your identity.
On side note, its rare to see anyone fixing the old tech, its hard to fix, needs a different kind of talent thats hard to hire for the PE money. The folks who can understand some one else's decade old code and run their imagination through all the possible assumptions or trade off that might have been made in code/system are rare to find.
Finding new customers, finding more things to sell, finding synergies with other items in your portfolio, increasing the price for existing products are more realistic.
We have portfolio level CTOs that specialize in this playbook. Fixing the tech means many things. Many companies don't even have CI (forget CD). Some have really broken processes and handoffs between teams. And yes, some are running COBOL backends.
Sorry, naming a portfolio company would reveal the PE.
It basically comes down to interest rates right? If interest rates are low, the discounted-cash-flows analysis will favor maximizing long-run profitability. If interest rates are high, you can do better by squeezing the business in the short term and placing the money you obtained into some sort of high-yield, low-risk investment vehicle.
The positive argument about PE adding value is around efficiency of processes and scale. Interest rates can make a difference however in reality I doubt that it effects the outcome in most cases. Companies have already invested in staff with certain type of expertise and they are unlikely to change their plans or rehire based on the interest rates in short run.
My PE is SaaS heavy portfolio. Pricing strategy, GTM, product roadmap; companies have rev, good moat, good customer base. But clear opportunity to grow rev.
Many companies are held by original founders. Leadership teams in eng and product have been the same for a decade+; lacking exposure to how the industry is shifting. AI, for example, has slow adoption in some cases.
When interest rates are low, it's most profitable to invest in extremely high risk, extremely high reward unicorn startups. That makes way more money on average than any long-run profitability. In fact, long-run profitability is basically never the most efficient use of money regardless of market conditions.
Why does everything have to be obsessed with growth? Especially with practically every (first world, at least) country having a birth rate well below replacement.
Not all businesses are obsessed with growth. Many mature businesses are managed for value rather than growth and focus on returning profits to shareholders through dividends or stock buybacks.
Except they always strip mine the business. Cut the quality and push unnecessary shit. But, hey, you can fill out your forms on an iPad instead of pen and paper. Very cool.
> So, what happens if person A is prohibited from selling their business?
I actually made that thought experiment. Disallow selling businesses. Disallow selling shares. Disallow stock market. Disallow mergers. The only way to acquire a business is to found it or to inherit it. The only way to quit a business is to shut it all down, with all assets liquidated, all liabilities settled, and all contracts terminated.
The main downside is that it's harder for to make money. Otherwise... I only see positives. And no, it wouldn't kill innovation. The investors would just have to invest the old fashioned way - by founding companies or expanding their existing businesses. As for job security, we already don't have it in the current system.
That's such an incredibly shortsighted view of the downsides.
In your model, the only possible business owners would be those with major capital resources to begin with, encouraging the spread of existing businesses into a sprawl: Walmart is now your doctor, pharmacist, and pharma manufacturer. Nobody would start a small business because they'd have to carry all liability, any new ideas are limited to spread at a glacially slow pace, because companies can't be aquired or acqui-hired, but can instead only scale on their own revenues.
It's worse than that. When the owner retires, all staff lose their jobs. That's a fairly big bummer.
I'm currently part of a "small" business/factory (around 50 employees). The owner is nearing retirement. Are all 50 of us gonna hit the streets tomorrow? Should our customers, many longstanding over 20 years get their contracts terminated? Do they get any warning? Can they easily switch to other suppliers? Is our offering somewhat unique?
Frankly, I think the thought-experiment is very incomplete if you can't see major downsides.
Recently, the owner of the factory my grandfather worked for the last 30 years has retired and sold their business, as a single package, fully operational, with employees and pending orders. It was still shut down and all employees were let go without any severance. From what I know, this is the norm for retirement sales, not the exception.
In this thought experiment, the result would be very similar to what happened, except with less wealth concentration, and with fewer Boeing-McDonnell Douglas mergers that ruin good companies in pursuit of short term profits (because short term profits are harder to realize by design).
Lost jobs are also a lot less of a problem in countries with functioning safety net.
> In your model, the only possible business owners would be those with major capital resources to begin with
Or you get a loan. Or you get an investor on board. How is that different from the current situation?
> encouraging the spread of existing businesses into a sprawl: Walmart is now your doctor, pharmacist, and pharma manufacturer.
It's happening anyway. My last vaccination was done 100% at Walmart.
> Nobody would start a small business because they'd have to carry all liability
How is that different from the current situation?
> any new ideas are limited to spread at a glacially slow pace, because companies can't be aquired or acqui-hired
Acquisitions are a relatively recent inventions, acqui-hires even more so. People have been doing massive inventions at rapid pace for like 200 years before being bought out by FAANG was a viable business strategy.
> but can instead only scale on their own revenues.
OK. Your job is from now is dung transport. Because you inherited it, whether you like it or not.
Sure, you are allowed to start a new business. But where would you get money? You can't sell your dung transport business, and you don't have enough money of your own to just start a new business from scratch.
It's crazy what some people will come up with just to have something to criticize instead of the actual contents of the thing they're replying to. Nobody said continuing an inherited business is mandatory, least of all me.
I am all for serious discussion about shortcomings of my idea. But this isn't it.
Yes. It absolutely does, because your system heavily favors inherited capital that HAS to stay within the family. It also heavily discourages capital mobility, risk-taking, and entrepreneurship.
Say "hello" to dynastic marriages, noble lineages, etc. The _best_ case is the system of medieval guilds.
It makes it impossible to share part of a business, including stocks. It also massively increases the friction of takeover by killing all employee, vendor, and client contracts, so the buyer cannot benefit from any of these without arranging for it separately. It also invalidates the strategy of leveraged buyout. But yes, it can be done in principle. Which is especially important in the "who will take over the local dentist's office" scenario - this system would heavily favor small business owners who want to do the business personally over holding corporations and PE funds.
Nope. It will result in a large company moving in and buying all the assets (still allowed), and forcing the employees to work for less money. Because why not?
You can sell all your offices, desks, printers, laptops, machinery, land, inventory, intellectual property, and anything else you want to your heart's content, to anyone you want, for any price you want. The only thing you can't sell is the legal entity itself.
I live in a small midwest market, and all the landscaping companies are locally owned and awful.
PE bought two of them, combined them into one, and now they, at about the same cost, do what they say they are going to do, answer the phone, hire competent people, and do a good job.
Likewise, PE has bought up most of the local plumbing and HVAC, and that's been a bit of a bummer, and gotten more expensive, but if you need someone right now, they are there (and answer the phone, etc), as opposed to the local concern who may be on vacation and can get back to you in 2 weeks.
There are some really good local small businesses/trades people, but like the 1950s, in a lot of aspects they are overly romanticized.
My controversial opinion: chains/large businesses are more convenient, cheaper, better (and more consistent) service, and the big one: you can complain up the chain when a local branch/franchise fucks up vs dealing with a sole proprietor. There's plenty of small businesses I do value (thrift stores, bodegas, etc), but for services? The choice is obvious.
Many medical practices (and other businesses) are poorly operated and administered. I think of my dentist: terrible website (even by 1995 standards), awful at follow up, weird insurance coverage (since she doesn't have time to follow up with new plans it seems) and almost no appointment reminders. There are obvious things to do that could drive business for her.
It makes sense to me that someone could come in and say "hey, let me run the business + finance side of the house while you practice medicine" and at least on paper I can see a real world where that works out for everybody.
Of course, soon you end up with dentists pushing unnecessary procedures and more, so it doesn't always works out that way.
In human med, it's a pretty standard practice to offer a management company 10% ownership for them to handle the business shit.
I'm not arguing with you; I'm legitimately curious what happened to that model and why PE has swooped in as more attractive to doctors. Maybe it's the payout and/or the fact that they don't have to handle business owner decisions at _all_ anymore?
Those are two different things, typically.
A business manager taking 10% means they're still running the practice day to day and seeing patients.
PE will come in to buy the entire practice from the doctor/dentist/vet that owns the practice, buying it from them entirely.
Oh, definitely. But what my parent comment was suggesting that PE do for their dentist is what 10% business management companies were already doing.
An acquaintance doctor in vet med was pitched 10% ownership in a practice buyout; PE would do business management. The doctor countered with the PE company getting 10%, since they won't be doing any medicine. The PE company declined.
Improving efficiency and optimizing profit are two overlapping segments on the road to crap. It’s not easy to stop the car once you put the bean counters in the driver's seat. If a company is able to do so, it’s usually because there’s a strong leader or culture to resist the slide. But otherwise it’s a thousand small decisions that all seem reasonable on their own.
As others have mentioned, venture capital is a form of private equity.
Private equity is investment in non-public companies. A lot of good has come from investment in non-public companies over the years.
Why can't all investment be in public companies? Not every company can go public: the regulatory and administrative requirements are high. Why are they high? To protect public investors -- to protect the general public.
In the past, many people put together fraudulent enterprises, sought investment from the public and then walked away with the money, perhaps even pretending to run the business for a while so there was convincing failure story. The regulatory and administrative requirements are there to make this harder, by requiring certain governance and reporting procedures.
The requirements are high enough that a new venture can not get started by going to public markets -- and in fact may run for several years before it is able to.
That's easily circumvented with management service organizations. More broadly, it's a stupid idea, especially beyond a few areas like law. If you own a golf course, you shouldn't have to sell only to a golfer.
That’s a good expansion of the premise, I’d support your idea wholeheartedly. Let PE raid chain restaurants and toy stores, not essential services where they add no value and only extract wealth.
It should be more about making certain levels of consolidation and deep erosion of local ownership illegal.
We have run this country on an assumption that we must give businesses a high amount of freedom. An argument can be made that businesses have been given too much freedom in our system. We’ve allowed Amazon and Ticketmaster and Walmart to exist and they shouldn’t exist in their present form.
Healthcare practices that provide necessary care shouldn’t even really be allowed to be for-profit entities if you ask me. The incentives become too perverse as a result.
>Healthcare practices that provide necessary care shouldn’t even really be allowed to be for-profit entities if you ask me. The incentives become too perverse as a result.
Why stop at healthcare? Why not other essentials of life, like food or toilet paper?
You’re absolutely right. For example, we’ve seen the negative impacts from excessive agricultural consolidation.
Many of them already lack profitability without subsidy.
Many agricultural products all pass through the same mega-sized processors and entities. Driscoll’s, Tyson, etc.
We’ve already made things like water and sanitation non-profit/government owned so the idea of doing more of that for food and essentials isn’t that crazy.
>You’re absolutely right. For example, we’ve seen the negative impacts from excessive agricultural consolidation.
Like what?
>Many of them already lack profitability without subsidy.
That doesn't mean anything without context. How are the non-PE farms doing?
>We’ve already made things like water and sanitation non-profit/government owned so the idea of doing more of that for food and essentials isn’t that crazy.
>Google “taylor farms cyclospora” or “tyson beef prices shortage” for an example of the problems of highly consolidated processing.
I already addressed cyclospora in another comment, but how is consolidation or tyson beef supposed to be blamed for the shortage? Media reports blamed the shortage on droughts and/or screw worms, hardly a tyson issue. Not to mention tyson hasn't exactly been raking it in during all this shortage:
>Yet despite record beef prices, the “Big Processors”, as Mr Trump calls them, are not thriving. Shares in Tyson, the largest, have tumbled by 40% since 2021—and by 7% since it cut its earnings forecast on September 3rd. It now expects its beef business, which brings in 40% of revenue, to lose as much as $775m this year. Trouble in the division has dragged the company’s overall operating margin down from 8.5% in 2021 to 2.6%. JBS, which is Brazilian, has said its North American business lost $427m in the first half of 2026.
>it can't have a national foodborne illness outbreak.
Which is bad for PR and great for clicks, but it's entirely unclear whether we're better off on average. What about all the years where we didn't have a mass outbreak? Would it be better if every state/county had separate food supply chains, and they had the same rate of illness, but it's more randomly dispersed so it doesn't make it to national TV? Think the difference between airplane crash (maybe one incident per year, hundreds of deaths per incident) vs car crashes (40k/year)
Hmm yes. Two deaths, over a thousand hospitalizations, and not a single state in the US with zero cases, but those are just things that are real and happened which means they do not take into account things that didn’t happen or things you could imagine in your mind.
If we simply envision a nation without diarrhea have we not eradicated it in our hearts, where it matters mos
It’s absolutely relevant because a diversified food supply would result in smaller farms, other things held equal.
You have fewer single points of failure, but more opportunities for failure and a tougher time addressing it via inspection, and less capital available to implement compliance.
Imagining a guy gasping out his last words as he succumbs to life-ending diarrhea in the back of an ambulance that’s long since cut its lights and sirens, “This is the best of all possible capital allocations for hygiene compliance”
> Healthcare practices that provide necessary care shouldn’t even really be allowed to be for-profit entities if you ask me. The incentives become too perverse as a result.
You don't need to disallow them for necessary care to be provided. You can just have public healthcare programs. That can look like publicly-owned hospitals or regulation that private hospitals must provide certain services under certain conditions if they want to keep operating. Private healthcare then works to provide more than that basic service that fulfills necessary care, to the benefit of the public that can afford more.
"We’ve allowed Amazon and Ticketmaster and Walmart to exist and they shouldn’t exist in their present form."
Do you realize that when Walmart moves into a community, prices charged for everyday things overall drop significantly, both at Walmart and their competition, which means that poor families are able to buy more with every dollar.
They then get to skim the other side of those subsidies, too, since they sell so many items that qualify for SNAP and WIC, as well as being one of the largest if not the largest prescription supplier in the country.
And what happens if walmart closed up shop? Do those employees magically evaporate and not need benefits? Why are we putting the blame on the employee's best employment option?
>What competition? When Walmart comes to town, the competition closes.
Why? Because they're sending goon squads to trash all the existing businesses? If walmart replacing "the competition" because they're offering lower prices and consumers are switching, why is this bad?
Everything explodes and people die in the streets.... No, other businesses move in to fill the economic needs because there is a profit to be made and provide jobs in doing so.
>Because they're sending goon squads to trash
You have a horrifically simplistic world view and can't imagine where goon squads actually are.
There was an article around 2 decades ago on how Walmart manipulates prices at an unimaginable scale via their suppliers. If you supply Walmart they automatically become your biggest customer. Walmart knows this, and has you by the proverbial balls. If you don't meet their demands they drop you in a heartbeat which is a death sentence for any business who's capitalization is not in the 10s of billions. There was a saying in this article I can no longer find but to summarize.
"To compete against Walmart is to invite death. To work with Walmart is to embrace it".
Simply put they are so large they have near monopoly power over a good chunk of manufacturing.
>There was an article around 2 decades ago on how Walmart manipulates prices at an unimaginable scale via their suppliers. If you supply Walmart they automatically become your biggest customer. Walmart knows this, and has you by the proverbial balls. If you don't meet their demands they drop you in a heartbeat which is a death sentence for any business who's capitalization is not in the 10s of billions. There was a saying in this article I can no longer find but to summarize.
So what's the complaint here, that walmart negotiates aggressively, passing those better prices to buyers, and that's... bad? Given we're in a thread complaining about healthcare, should walmart do the opposite, instead using the insurance company strategy of encouraging their suppliers to pad their margins, so they can offer "modest" (in % terms, high in absolute terms) markups?
Around the turn of the century, my grandmother lamented how Wal-Mart had ruined the shopping experience in her small town. When the local hardware store and other stores closed, she ended up only with Wal-Mart where she said the employees didn't know anything and couldn't really help you. Anecdotal, I know, but this is a common refrain throughout the country, that by using their monopoly power they're able to undercut local businesses until they go bankrupt. The assumption is that we're left with is a net win due to lower prices for the consumer, but let me tell you another story.
An older relative had a very successful small conglomerate of businesses. One of them manufactured something costing close to $100 that Wal-Mart was interested in selling in its stores. After extensive negotiations, my relative told the Wal-Mart VP no because Wal-Mart was pressuring them to use cheaper parts that would make the product wear out more quickly. Wal-Mart didn't care because they'd be able to make the sales and then consumers would come back to buy again sooner, but my relative felt that was dishonorable. The VP said it was the first time a potential supplier ever walked away from him. They are notorious for their abuse of suppliers, and the ethical concerns are often very palpable. You might suggest this is simply market forces playing out, but we decided long ago that monopoly power often leads to a market we don't want to see in this country.
We the people get to decide what kind of society we want to live in. Their monopoly power means that in so many of the rural areas where they are, they might be one of the few viable employers. When people are poor, it's not so easy to just tell them to relocate to another geographical area, so it's easier for the entities benefiting from that to maintain the status quo at the expense of others. If we decide that for Wal-Mart to stay in business in the USA they need to pay employees more, with health insurance, then so be it. If they can't, then they can just go out of business and be replaced by a company that is able to navigate that balance better, offering pretty low prices while paying a bit more in wages.
Walmart is able to offer lower prices because it does not pay its employees enough. The people being hurt is the society at large that has to allocate taxes towards SNAP and other social benefits so that Walmart can continue to underpay people. Those resources could go to other programs. That is why Walmart is bad.
Walmart is paying what people are willing to work for. The "greeter" standing at the door is not creating $25 an hour in economic value. The biggest issue is we as a society have overextended SNAP and social benefits, trying to equalize outcomes, rather than recognize that entitlements should be a last resort and a safety net against things like starvation. Someone should not weigh 275 on SNAP.
Does SNAP need a better system to provide healthy food? yes.
Should employers be required to provide sufficient earnings such that employees do not require SNAP? Also, yes.
Is blaming employees who are on SNAP due to Walmart overhiring and cutting hours of at the threshold where the earnings would cross into full time with federally regulated benefits in order to pass the cost of operations to the public acceptable via absurd reductive reasoning a bald case of blaming the victims? Yes.
I'm not sure whether you are pretending that Walmart's practices are acceptable, due to a willful disregard for the complexity of the larger systemic failures that permit corporate abuse, or due to simple ignorance.
I'm not sure which looks worse, but neither makes you seem compassionate. Though the fat shaming does make you look like an ass.
>Does SNAP need a better system to provide healthy food? yes.
Yes, SNAP absolutely should not enable unhealthy consumption, especially because the majority of those diseases of affluence just hit taxpayers again via Medicaid spending.
>Should employers be required to provide sufficient earnings such that employees do not require SNAP? Also, yes.
The thrifty food plan from the USDA puts weekly food costs at about $75 for a man and about $60 for a woman. Walmart's company wide minimum pay is $14 per hour. Minus a bit for taxes, add a bit back for EITC/other tax credits, and you are covering a week of food in less than 8 hours of work. They have sufficient earnings. They choose to spend the earnings elsewhere because taxpayers are subsidizing their food.
>Is blaming employees who are on SNAP due to Walmart overhiring and cutting hours of at the threshold where the earnings would cross into full time with federally regulated benefits in order to pass the cost of operations to the public acceptable via absurd reductive reasoning a bald case of blaming the victims? Yes.
Walmart is under no obligation to hire them as full time employees. They are free to accept a different job, negotiate a contract for full time employment, etc. They aren't a "victim" because the job they accepted doesn't meet every one of your standards. They are assumably mentally competent adults who made their own decisions and are free to make different decisions at any time.
>I'm not sure whether you are pretending that Walmart's practices are acceptable, due to a willful disregard for the complexity of the larger systemic failures that permit corporate abuse, or due to simple ignorance.
Walmart's practices are acceptable. It's incredible to think that a job offering double the federal minimum wage (or more), in a reasonably safe, air conditioned environment, along with retirement matching, employee discounts, and even paid tuition/books is somehow corporate abuse.
How much do you think stocking a shelf is worth?
>I'm not sure which looks worse, but neither makes you seem compassionate. Though the fat shaming does make you look like an ass.
It’s wild to blame Walmart for government subsidies when it’s the government not Walmart who decides who gets benefits.
Is Walmart to blame they hired a single mother of 3 for $20/hr? Would this women be better off if Walmart never existed and she was unemployed?
And then turn around and blame Walmart for selling essential food items for low prices because SNAP can be used to pay for them. Would you rather SNAP beneficiaries pay more for groceries so they have less to eat?
Prices may drop, but wages drop even further and the compound effect of local government subsidies and loses when competition dies means everyone loses because everything in the local area dies.
Can you define profit? Would a doctor be allowed to earn more than $200 per hour? $300 per hour? $400 per hour? Is a doctor allowed to be paid per procedure or time?
How much would you want to sacrifice your 20s and early 30s? How much would you need to work in the middle of nowhere where your kids won’t have the best opportunities?
> We’ve allowed Amazon and Ticketmaster and Walmart to exist and they shouldn’t exist in their present form.
Unpopular knowledge is that these businesses are generally illegal in their current forms under existing US law. The relevant laws are still in effect, they are just rarely enforced. The scale of the lawbreaking runs to the trillions of dollars annually, and it directly harms every US consumer.
The illegal conduct is so pervasive that even explaining the existing federal law makes one sound ridiculous, because companies have been explicitly advertising illegal behavior for decades. Because there is no sanction.
One of my faves is the notion that $BIG_RETAILER can buy in bulk and get better pricing, which they pass on to the consumer. You may have seen a company advertise something like this. It sounds like smart business! There is an active federal law[1] that explicitly prohibits this arrangement.
Lack of enforcement of that law is a factor in the disappearance of the American "high street" and the demise of many small retailers.
My #1 call for reform in the US is to simply start enforcing laws, even if doing so makes rich people/companies uncomfortable.
I'm not a lawyer, but a cursory search shows there's a bunch of carveouts. It's not a straightforward ban on all favorable pricing for big players. For instance, if there's an actual cost justification (eg. bigger buyer = more efficient shipping) that's allowed. Same with offering volume discounts that are available to all buyers. That's not to say everything's above board, but it's not as simple as "wow big box stores get better pricing than mom and pop shops, so there must be federal laws being violated".
I hesitated before linking that specific statute because I suspected someone would parse it as you have. Not a bad thing, just distracts from the larger point that the US government currently has tools (of which Robinson-Patman is only one) to prevent & reverse the extreme consolidation that harms every American.
In the context of this article -- we may not need a new ban specific to preventing private equity from owning medical practices. We could simply enforce existing laws around e.g. market consolidation, consumer harm, etc.
Pe is good when it is taking big risks on something new. That is hard so that is not what most pe does. Most pe is just figuring out ways to insert artificial inefficiencies into the system to syphon money off. Ie tax arbitrage, patent/copyright abuse, geographic or other market power abuse, etc. Basically find a way to move money around the system with no net benefit to society while having a bunch of it fall in your pocket is 90% of what pe does and its poison. The other 10% is vitally important to continued growth and prosperity and its often hard to tell which is happening until its over.
PE staff are more intelligent and more shrewd than the people running the businesses they buy. Being a good doctor doesn't make you a good businessman.
I'm not a huge fan of PE but the point of economics to deliver cheap and quality goods to consumers not keep people in a job.
In healthcare in US in particular I think the main thing that capital should be (if regulators allow) boutique / specialists that e.g. are the best in the biz at doing MRI scans, in some states my understanding is that it's literally illegal to start a business aiming to make one small part of the process better.
We know how to make MRI cheaper. Put it in a can. MRI suites are built with copper shielding in the walls, and the machines are really heavy, which creates huge capital costs. (Capex is a big problem for medicine.) There's an easy solution: you can just put an MRI machine in a standard tractor-trailer container and bring the patients in. Nothing has to be constructed or installed.
None of the private equity chains with the sans-serif fonts, simplified logos and trisyllabic names are doing this, though. It's bad marketing. Patients don't want to walk outside to an MRI machine in the parking lot. It feels sketchy. Never mind that they score just as well on the ACR image quality tests as the in-room machines. Who the hell knows what that is?
In reality, it's the county hospitals and big universities that use them! Places that have in-house physicists who can argue for what really makes sense in practice. A major problem with healthcare as a business is that the customer does not usually understand the product, but they still need to buy it, and there are time constraints.
> Patients don't want to walk outside to an MRI machine in the parking lot. It feels sketchy.
Seems like you could build a hallway around the trailer; if you do it right, nobody knows it's a trailer in the middle of the building. If you do it really well, you can still pull the trailer out.
> What does it mean in this context to be more intelligent and shrewd than the existing owners?
Streamlining everything. Sometimes this is done in a bad faith way, but it’s often not difficult to do it in a good faith way.
Some simple examples:
- right-sizing staff (can be reducing, increasing, or changing roles)
- improving marketing (e.g., simple things like customer reactivation, packaging the product/service better, or just plain, ol’ getting the word out better via stuff like before/after pics or success stories)
In theory this is true, but in practice I am skeptical that it's generally possible to do this with generic "business" intelligence that is not accompanied by specific understanding of and genuine care for the actual substance of what the business does. That is, no matter how good you are at "business", you're not going to have a good hamburger stand unless you care about making good hamburgers. It's true that the importance of this varies from one business to another, but I don't see any particular tendency for PE to gravitate towards industries where it matters less. (Medicine is an example of an area where it would matter most.)
You're putting the cart in front of the horse. Their incentive and their job isn't about 'streamlining' anything, let alone in a good-faith way, and that just so happens to deliver some extra cash on the side in a pleasant surprise. Their sole purpose is the profit, and they will try absolutely anything to get it. Sometimes it may accidentally produce good outcomes, but in general there's no rule or incentive to ensure that happens. They can do anything, and if there's anything to go off of, every entity I see desperately chase profit over all turns utterly evil. Being evil just deepens your toolbox for getting the only thing that matters in the world - money - so of course they tend to win out over anyone who still actually cares about the underlying business or customers.
There's more than one form of intelligence, and being good at fixing people doesn't necessarily correlate with managing a business. As silly as it sounds, watching Shark Tank will really demonstrate that someone can have a legitimately great idea, but if they aren't business minded, it wont matter.
I mean, losing money is not sustainable. If a doctor or physician group isn't business savvy and can't earn a profit they will eventually go under. That's not good for the patient.
Most doctors make good money, but most who are good doctors could make much more.
Simple example pitch that many general practitioners might consider using (based on local laws, of course):
“Insurance covers C, Y, and Z. I can offer these additional services for A, B, and C that are not covered by insurance.”
Where I live, you get a lot of this via “concierge doctors”, but that system can go far beyond basic concierge service, and people are willing to pay for top quality care.
Contrary to popular belief, being intelligent in one thing does correlate with being intelligent at other things[1]. For doctors, the comparison with private equity (MBAs?) might be close, but it's not hard to imagine the targets of other PE rollups have owners that are more average in intelligence, think plumbing or roofing.
Which section of that very long article are you claiming supports your assertion?
Here's a bit from the start of the "Concept" section:
>> In a famous research paper published in 1904,[8] English psychologist Charles Spearman observed that children's performance measures across seemingly unrelated school subjects were positively correlated. The consistent finding of universally positive correlation matrices of mental test results (or the "positive manifold"), despite large differences in tests' contents, has been described as "arguably the most replicated result in all psychology".[9]
>being intelligent in one thing does correlate with being intelligent at other things
vs
>The consistent finding of universally positive correlation matrices of mental test results (or the "positive manifold"), despite large differences in tests' contents, has been described as "arguably the most replicated result in all psychology".[9]
How are they contradictory? Did the first part of my comment make you think there was a negation?
Remove “more intelligent” here and I’ll give you some benefit.
The problem with healthcare “economics” is that providing high quality care is likely not as profitable as middling care, or sub-standard care.
You say that economics is meant to deliver cheap quality goods, but in reality here economics for PE is value extraction and has nothing to do with consumer good at all - unless of course there’s more profit there. Most of the time, there isn’t.
That's really not true. Studies have shown that there's little correlation between care quality and profitability. In some cases non-profit health systems charge high prices and deliver terrible care quality. The reality is that most provider organizations are run by incompetent managers. People used to working in modern tech companies would be shocked to see the waste, inefficiency, and missed opportunities. PE acquisitions may cause some problems but the new managers do at least bring a basic level of discipline and operational competence that was often missing before.
Modern tech companies are not managed well at all in my experience! They’re rife with waste.
Management often makes terribly unprofitable decisions and often work to protect their slices of the pie rather than the org.
Tech companies are saved by their margins, their aura, and low interest rates.
Better examples might be grocery stores or other low margin businesses that require some fairly ruthless prioritization (at least that is what I’m to understand)
To your care / profitability argument: that is good news! However, I do believe that concern for profitability will always outweigh a care quality argument so there is a misalignment of incentives in that case. I would look to insurers to demonstrate this, generally, but can imagine a PE-owned hospital system might attempt similar measures.
Ideal outcome is a great manager that also cares and ends up paying doctors more and providing excellent care while driving down costs using better processes and negotiating with suppliers. But, uh… not sure how often the benevolent PE firm actually shows up historically.
Apple has, for most of its existence, been a distant second choice, because IBM and Microsoft captured the enterprise, which trickled down into consumer buying habits.
It survived, then thrived, by making its products so appealing that customers would buy them anyway.
Apple is not a PE firm. They are a public consumer goods company with a ton of different business lines. Their duty is shareholder value and making good products that sell is one way to do that.
Value extraction is a short term play. It’s usable by most companies in a pinch, but normally only happens before their death or slow decay into zombie-dom. At least, that’s what my anecdata tells me.
Hard disagree about "more intelligent". They are playing a financial game using a combination of leverage and reptilian ruthlessness to EBITDA hack.
They buy one (or more) companies, often with only the slimmest understanding of what those companies do, slash opex by gutting the company with layoffs (yay EBITDA), maybe staple a few such companies together with leveraged buy-outs, then resell the whole bundle for more than they paid.
From experience, they don't give a single crap whether the resulting mess still functions. They care about selling the company for more than they bought it for. That prospect is only tenuously and at best accidentally related to whether the company still functions.
The private equity companies I've had to deal with were full of braindead MBA spreadsheet monkeys and used car salesmen. Their chief differentiator was that they worked 80 hours a week and were enthusiastic about laying people off without much deliberation.
Thinking private equity is "more intelligent" than business owners is like thinking house flippers are "more intelligent" than home owners. No. They know how to rip out carpet and replace it with laminate on the cheap. They know how to cut corners and hide it. They know buyers will over value a fresh veneer of paint. They don't give a shit about the long-term health or value of the house. They are not better stewards of houses. They specialize in short-term profit maximization and that is literally it.
PE attacks organizational sclerosis, can save companies that otherwise slowly deteriorate, reallocates resources faster, creates an unusually powerful form of corporate governance, Debt can impose useful discipline, can provide capabilities that smaller companies couldn't build themselves.
A society doesn't necessarily benefit from preserving every existing job. It benefits from creating increasingly productive jobs.
If I own a hospital that makes infinite money and every patient that comes to it dies the economy measures this is infinite productivity. This is contrived, but really matches some of what we see in real life.
This is why making a measurement a target can be horrifically destructive and contrary to the actual goal society wants.
The west doesn't seem to believe in the idea of social stability over increased profits which can lead to things like corporations being the social structure that is optimized for rather than the wellbeing of the individuals it contains. Left to run out of control the society can collapse.
> If I own a hospital that makes infinite money and every patient that comes to it dies the economy measures this is infinite productivity. This is contrived, but really matches some of what we see in real life.
You wouldn't have any business if all, or many, of your patients die.
The history of government regulations mostly only being made in response to people dieing seems to refute that. If what you claimed is true, those businesses killing people would have gone under, rather than continuing until there is enough public outcry to regulate it.
It seems to me that oligarchies as a whole function a lot like PE's taking over a socially unstable polity.
The west has been an oligarchy for several decades at least, so it's not that people in the west don't believe in social stability, it's that they are living in the hollowed out shell of the former "company" where that doesn't exist. We need to optimize for the people's prosperity and well being.
Longevity decreases, cost of living increases on every metric, rampant inflation, ever increasing economic uncertainty, increases in mental health issues, increasingly unstable populism overturning long standing institutions.
There is also the effect where it doesn't matter if are or are not doing better by the numbers, it question is do they feel they are doing better. People act on how they feel, not on how they are.
Private Equity allows an owner to sell their income generating but slowly dieing company for its value today. The company will keep operating for 3-5 years and then rapidly shutdown.
This is valuable for business owners, because it gives them a way to get the value out of a failing business without having to ride it all the way into the ground.
It's valuable for consumers because it provides locations to shop for halloween supplies.
While not perhaps the best argument is the private equity provides liquidity for founders that want to exit. If you started business X, you’ve grown it for 20-40 years and you want to retire, selling is typically the answer. Let’s say the business makes $1m/yr after tax cash flow, PE might buy for $10m, besides PE there aren’t a bunch of likely buyers for your business (of course maybe there is a big competitor, and maybe you could sell it to an employee (but they probably don’t have the money and would need you to seller finance etc)). So for entrepreneurs with a successful small business (say $2-5m+ of ebitda) selling to private equity is the clearest path to a liquidity event for them.
The economist did a piece in defense of private equity a few months ago. Basically boils down to more efficient resource allocation across an entire economy, deep pools of capital to rapidly transform businesses into things people want to buy from.
Small(er) businesses can be poorly run. In theory private equity takes knowledge already in practise in other locations and shares it with this new location, improving results. Downside of course is that they care a lot less about that specific location than the previous owners would have.
One specific practise I’d like to see banned is private equity buying companies with debt the company then assumes. It staggers me that it’s legal.
So form a shell buying company A and secure the debt of company A with the assets of the newly purchased company B? Congrats, you added about 5 minutes of paperwork.
I’m arguing against the practice of leveraged buyouts. You aren’t describing all of the steps of a leveraged buyout. You are just describing a buyout. Buyouts are fine. Leveraged buyouts are what I think is not. I cannot be more clear or keep explaining until you go learn the difference since you aren’t understanding what I’m saying.
That's a silly suggestion. The lenders buying that debt know what they're getting into. Those are sophisticated investors. If lenders want to limit what borrowers are allowed to do then there's nothing stopping them from imposing debt covenants on the deal. No need for the government to ban anything.
I suspect there’s a survival bias at work here. The PE purchased companies that continued to thrive are ones you probably never even knew got bought out.
Those are certainly some... examples. Not things I would hold up as a sign that PE is a good thing since all those businesses look like they are perpetually on the edge of collapse around my area. Dilapidated, mostly empty parking lots, poor service from understaffing. I think we would all be better off if those businesses died and left room for others to replace them.
Who’s preventing a competing coffee shop or burger restaurant from opening? If your area is such a prime business market, but these businesses aren’t capitalizing on it, one of your assumptions may be wrong.
The fact that they are still there in business, even if it is low and crappy business, will still hold onto some customers. And long established business has advantages that a new business can't buy. If there isn't enough traffic for two burger joints, it can become a standoff of both bleeding money until one of them fails, and the new business likely doesn't have the same credit line.
Many new medical treatments/approaches involve heavy capex (robots, light and ion sources, imaging systems, etc) and removing private money that doesn't belong to individual physicians personally will suck a vast amount of capital out of healthcare, creating significant forces against innovation and deployment.
PE exists because a lot of companies are poorly managed. It's better for your local hospital to be taken over by a PE firm than to go out of business. You can say that it would be even better if the government ran the hospital, and you would be right, but that would require a radical overhaul of the American healthcare system. Until that happens, PE plays a major role in keeping things working.
> PE exists because a lot of companies are poorly managed.
This is a non-sequitur. The existence of private equity has an effect on how companies are run, not the other way around. Many well-run companies are targeted by PE exactly because they're well-run and have carved out a sizable captive audience for themselves. And when PE takes over, said company usually ceases to be well-run on all metrics except one.
PE exists because of the non-linear relationship between money accumulation and power. This effect means that it is more beneficial for any company to hoard capital as much as it can rather than "waste" it on the wider economy; after accumulating enough capital, the company can pivot away from whatever market it was in before and focus solely on asset management. PE mostly results from too low taxation on inert wealth compounded by zero-interest rate monetary policies.
I don't think I agree with this, most of the regulation I see is for patient protection. Stark, AKS, HIPPA, etc... are all strong regulation aimed at protecting individuals.
From fee-splitting prohibitions to FDA regulated medical devices, almost all of the day to day regulations I've dealt with in healthcare are squarely aimed at ensuring safety, protecting privacy, preventing fraud and controlling costs.
These businesses would simply stop existing if no purchaser came forward. Many first-world economies face a demographic cliff where boomers are retiring and there is nobody in the next generation who can afford to take over the local dentist office, the HVAC company, etc.
That's not a demographic cliff, that's a financial power cliff, and it's caused exactly by too much money being tied up in PE companies and offshore accounts. All that money taken out of the local economy is leaving each generation with an increasingly smaller size of the pie, even when the pie itself has been consistently growing. You even admit yourself that the problem is that the next generation "can't afford" to maintain the outgoing generation's standard of wealth.
I don’t think that’s true though in all cases. Sometimes PE just offers more money passing the debt into the company they acquire. But smaller players would still take control.
It sounds like there's too much money in PE and not enough in the hands of young people. I'm told there is a secret ancient technique for rectifying such a situation.
You are forgetting that if PE weren't there to buy out local dentist offices at a premium, then these offices would sell at far lower price, making them affordable to the next generation.
At a general level, PE (and really much of capitalism generally) is built around the idea that financial efficiency should be the guiding principle re: capital allocation, so the steelman argument is that PE takes financially inefficient businesses, makes them more financially efficient, and that is good because that's the best way to allocate capital.
a financially inefficient business may be a business that employs more people than it absolutely needs, a business that treats customers/vendors more generously than it absolutely needs to, or even a business that exists as a going concern that would be more financially efficient if sold off for parts or went into bankruptcy.
i personally don't believe financial efficiency should be the guiding principle for everything or really anything, and I believe as a society we should account more for non-financial efficiencies (like treating human beings generously and kindly), and I think it's fine for an inefficient business to continue existing if that means more people have jobs for longer or customers/vendors are treated more generously. fundamentally, i think this line of thinking is dehumanizing, as it views the world (humans, nature, information, knowledge etc.) as resources/materials and not much else.
that all being said, i at least understand the principles and the materialist idea that everything can be viewed as material/resource and why people pursue them (esp because pursuing them effectively can make you fabulously wealthy).
i often say when talking about this stuff with friends: if you're willing/able to see everything (including/especially people) as resource/material, you're well positioned to obtain a lot of material resources/material. whether that's a good thing for you or the rest of the world is another question (and my view is that it's straight up bad).
Easy. PE 99% of the time buy businesses that were already failing and provide a lifeline. A failing business can't afford to pay for expensive medical treatments without a loan that a bank will not provide since it is failing.
People who are vehemently against PE generally do not have any idea of how the system works
That's one model of private equity, but PE has also been buying up very successful local businesses in areas like veterinary care. The PE firm keeps the name and branding of the local vet because people have traditionally wanted to take their pet to a trusted local vet, not a big chain.
They don't have to have an in-depth understanding of leveraged finance to get pissed off when their doctors start doubling prices or their own employment conditions get worse or their parents get treated badly in care homes because the staff are now overworked etc. they're mad at the outcomes they're overwhelmingly not actually trying to debate the merits of it from an exit liquidity perspective.
A guest on a podcast said, in response to open source and community websites being flooded with AI scrapers, "the internet has always had people scanning websites; get over it".
I still respect the podcast, but that was such a shitty take. The difference between before and now was that those websites started closing their doors instead of paying the increased hosting feeds.
I'll get over it when we stop giving people a pass for the damage they're doing just because they're a corporation.
Making the possession of data this either illegal or too horribly cumbersome.
Flock is just an iteration, and getting rid of that brand won't fix it. And camera tracking of normal citizens is just an iteration -- not the underlying systemic issue that isn't being addressed.
The EU has GDPR. At this point, I want something stronger than that.
Still not enough. What you suggest does not prevent the government of possessing the data. Technical means of collection needs to be preemptively banned.
The Pixel line is, from what I can see, a tiny part of the smart phone market share.
So, yes, I can buy a phone that I can mostly control (at the risk of losing access to some draconian apps). But most devices being sold don't allow consumer control.
You can't really spit in the hobby 3d printing world without hitting the community. I have coworkers who talk about their printers, filament choice, what they've printed recently, etc etc. I've been around hackerspaces with that behavior for over a decade, but it spontaneously showed up at work from a shared interest.
That community is where open source tech tends to come from.
I know the community well, I was challenging the assertion this hurts the community. On the contrary, better and cheaper printers help the community way more than the worries over software licensing. The average person doesn't care, they want a printer that works and doesn't cost much.
Its not only a licensing issue, but they abuse this closed source binary to lock away major features from other slicers (DRM, signature checks), hinder development, include anti-debugging, telemetry, encrypt logs and configs, etc.
And the stock plugin ships an unaligned atomic that triggers the kernel's split_lock detector on every modern Intel CPU. Startup stalls for 25-60 seconds while the kernel walks each trap; every Device-tab click hits it again. The workaround (sysctl kernel.split_lock_mitigate=0) degrades system-wide performance and still misbehaves in LAN-only mode. Reported to Bambu over a year ago and still open: bambulab/BambuStudio#8605.
Again, the average person does not care about any of that. They will use the Bambu slicer (if even, I bet many only print from their phones with the app). They aren't aware of, nor do they care about, anti-debugging, telemetry, encrypted logs, or anything of that nature. Most who do use the slicer will probably be on Windows, not Linux, and on an x86_64 machine. Why is any of this a surprise? It's an appliance, not something to hack on. It would be one thing if it was presented that way, like the Prusas, but it is explicitly sold as a turnkey machine. If you don't like that, you can buy a printer from one of their many competitors, or build a printer yourself, Bambu is not stopping you.
My point is even if it hadn't blown up you would've committed a crime anyway, whereas if you rig a phone to erase its own data upon entering a PIN and the PIN is not entered, you haven't committed a crime. The two situations are different enough not to be analogous.
We need PII to be so toxic that companies run screaming from the liability unless they have explicit consent[1] and a legit reason to house it.
A company selling me widgets wouldn't store or let another company store extra information about me if it subjected them the widget seller to HIPAA. Or better yet, something more stringent.
We don't need the government to be antagonistic toward corporations; we just need a government that makes the corporations internalize the risk they're making us take.
[1] The fact that ToS are enforceable when every court in the country knows that only a vanishly small percentage of people ever read them, much less understand them, means that they're not doing their job.
> We need PII to be so toxic that companies run screaming from the liability
This is how healthcare workers used to treat health information protected by HIPAA, but it seems like the big corporations don't really even care about it. Nothing ever comes from violations besides slap on the wrist/cost of doing business penalties. You can't do anything without waiving all your rights, granting permission to be recorded, granting permission to use your photograph for anything they want, allowing your recorded audio to run through AI for transcription (and whatever else they want to do), granting permission to share your data with their partners, associates, and some vague description of "anyone we decide at a later date". That's before you can even sign-up, receive care, have a service rendered, enter into a business establishment.
There's pages of fine print documenting it all in vague terms that ambiguously safe guard the provider from any liability, but half the time, you don't even get to opportunity to (not) read it. It's just a link to go elsewhere and (not) read it. They add as many steps between you even reading what rights you're giving away, so that even the people who had a mind to do so would get fatigued, and they make you do it while there are people queuing up behind you, or you're almost done with your purchase/subscription, etc.
Everything is so consumer hostile (and expensive in America), but no "better" service can swoop in, because the established Big corps get to break all the rules or can afford the token penalties to give them an unstoppable market share no honest disruptor/competition could ever overcome. On even ground, no competent person would choose to be abused by our resident monopolies vs a reasonably similar priced local upstart, and a lot people would even pay (a little) more for a better experience/product/service.
I just stopped writing my social down on doctor intake forms years ago after numerous "whoopsie we were hacked" letters, that almost seemed like a scam themselves(always nearly identical).
No doctor ever complained. You don't need to enter most of that info.
Explicit consent will be everywhere, like you won't be admitted to a grocery store without it. Take any modern TV -- there's a privacy policy you have to accept the first time you turn it on. Or California Prop 65 notice on every product.
So no, requiring explicit consent won't fix anything.
The government needs regulation to allow access without granting consent in certain cases. Not quite as far as declaring something a utility, but better than almost completely unregulated.
Most of the videos talk about reducing burden on clinicians. Specifically: sharing, accessing, updating patient history. Providing clinicians and patients guidance through the medical process through AI agents (that have access to your PII). the kaiser permanente guy highlighted ai's use in guiding billing codes. Dr. Oz spoke about getting pre-authorizations near instantaneously
I'm not sure how that gets accomplished without reducing liability or loosing restrictions. I wouldnt be surprised to see a continued attack on our healthcare privacy
Weren’t electronic health records supposed to solve this problem almost 20 years ago?
I would have figured there would have been a massive financial interest in providers not having to waste time dealing with tedious Q&A and data entry with new patients…
> I think the distinction between political appointee and scientist/researcher stands.
I agree with this.
I'm a civil servant and I know (personally; my work is nowhere near the labs) a number of people who work or have worked in that weird contracting DOE/DOD structure that includes the labs.
The difference I've seen is far more from the nature of work rather than the employment details.
Europe is implementing a law that requires software made for profit to hit at least industry security standards. Punishments include the purchaser being able to sue the seller as well as jail time for execs.
At some point, we need to push back against the reality in the US that we have effectively no way to stop mass harvesting (and then breaching) of our PII -- and there's basically zero downside to companies when it happens.
I already hear the downsides frequently from someone whose work is directly affected.
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