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Private equity bought America's essential services

• c54 4mo ago
  Good article and discussion but I couldn’t find anything about the author? There’s no bylines or about page anywhere on the site. Does anyone know about the source?
  • malfist 4mo ago
    Because it's slop. It even starts the whole article with "It's not X, it's Y"
  • sbuttgereit 4mo ago
    Check this out... https://rubbishtalk.com/media-kit/ https://rubbishtalk.com/media-kit/ Whoever put this together couldn't even be bothered to compete the template they were using.
• dd36 4mo ago
  End consolidation. Go back to pre-1980s antitrust policy. Encourage competition and bust the trusts.
  • N_Lens 4mo ago
    [flagged]
    • jagged-chisel 4mo ago
      I thought “socialism” was the current bogeyman
      • micromacrofoot 4mo ago
        most americans don't know the difference
        • red-iron-pine 4mo ago
          most americans can't define woke
    • graemep 4mo ago
      Its called "free market capitalism". I have been in favour of it for decades: https://pietersz.co.uk/2009/11/fix-capitalism https://pietersz.co.uk/2009/11/fix-capitalism I am somewhat more inclined to some socialist policies now though.
      • nekusar 4mo ago
        In my experience, most self-proclaimed "capitalists" either lap up the scholastic propaganda that capitalism is the 'bestest' economic system in the world, or are a real capitalist and don't have to give one fuck about what others say. And most of these types NEVER read past, say, page 20 of https://www.gutenberg.org/files/38194/38194-h/38194-h.htm https://www.gutenberg.org/files/38194/38194-h/38194-h.htm , Adam Smiths treatise on capitalism. Here's a few failures that Smith wrote back in his initial treatise in 1776. I think so far, we're failing every one of these, and basically speedrunning all the terrible warnings Smith wrote about as accomplishments. Gross inequality was even mentioned there as something to significantly avoid. Book I, Ch. X, Part II; ~p. 50 Principal-agent problems in joint-stock companies. Managers of other people's money "cannot be expected to watch over it with the same anxious vigilance" as owners, leading to waste and negligence. Book V, Ch. I, Part III; ~p. 312-313 Mercantilist policy distortions. Protectionism, export bounties, and import restrictions enrich narrow merchant interests while reducing national wealth by intentionally misallocating capital. Book IV, Ch. II-V; ~p. 183-213 Underprovision of public goods. Markets fail to supply infrastructure (roads, bridges, canals, harbors) and institutions that benefit society broadly but yield no direct profit to private actors. Book V, Ch. I, Part III, Art. I; ~p. 303-305. https://www.independent.co.uk/news/world/americas/us-cities-infrastructure-repair-cost-study-b2970689.html https://www.independent.co.uk/news/world/americas/us-cities-... Dehumanizing effects of extreme division of labor. Repetitive specialized labor "renders [the worker] as stupid and ignorant as it is possible for a human creature to become," impairing civic and moral capacities. Book V, Ch. I, Part III, Art. II; ~p. 324 . Even in the 1800's this got so bad that Karl Marx wrote about this in both of his critique of capitalism AND the communist manifesto. Merchant collusion and monopoly power. Smith warns that "people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices". Book I, Ch. X, Part II; ~p. 54 . Hello, eggs, meat packers,oil products (gasoline), grocery chains, electronics (RAM), health care. Collusion after collusion, and almost no enforcement. Im not communist, and probably not socialist. But its clear as day as to the failures of capitalism. And as a stopped clock is right 2x a day, capitalism does handle some problems better than any previous system. But we can do better. Lots better. But the entrenched power holds on to capitalism as fervent as a religion, and not dispassionate analysis.
  • amazingamazing 4mo ago
    How will that work - for example Y Combinator classes. They cannot be acquired? What about acquihires? Cant stop that - employees have their own agency.
    • jgalt212 4mo ago
      I think 5-15 person employee businesses do not concern trust busters.
      • amazingamazing 4mo ago
        Whats the connection between the number of employees and anti trust? Also, there are plenty of YC companies with far more than 15 employees.
        • estearum 4mo ago
          Generally you don't hold a market dominant position in any sector that anti-trust regulators care about at 15 employees? Frankly this stuff is impossible to talk about in the abstract. The details of every individual case matters. If you're actually curious (instead of just playing a shell game), you can go look up the types of analysis that FTC does to evaluate market dominance and whether a given transaction will excessively consolidate a market.
    • Ekaros 4mo ago
      If the acquirer has too big or dominant position already in the specific sector no. They should not be able to sweep the board of all companies doing single thing.
    • toomuchtodo 4mo ago
      If the acquirer attempts to acquire a startup (regardless of investor) for anti trust reasons, or there are anti trust concerns, the M&A activity is disallowed by regulators. A recent example is Figma and Adobe. https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=Figma%20Adobe&sort=byPopularity&type=story https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
  • jonstewart 4mo ago
    Statutory antitrust regulation would be fantastic. Instead of litigation, the regulators, corporations, and shareholders know when a business must split or divest. The firm files a plan, it gets approved, everyone wins except monopolists.
    • smallmancontrov 4mo ago
      Progressive business taxes. At a certain income level, natural pressure starts mounting to split.
      • jonwachob91 4mo ago
        elaborate on this line of thought please.
        • canyp 4mo ago
          Not OP but a progressive tax generally scales non-linearly to tax higher brackets a higher %. So then you have an increasingly lower / decreasing incentive to make even more money. Many countries already have a progressive tax on income, but that is irrelevant to business profits.
          • smallmancontrov 4mo ago
            Yep, exactly. There's an easy way to make it gradual, too: put the "heel" of the progressive tax above where the largest American companies are and let inflation bring them into the curve. They can either pay a tax cost not to split, or they can split. Alternatively, don't. I expect this proposal to be popular with executives regardless because it creates new spots for executives, just as it does with lower-flying labor.
      • thmsths 4mo ago
        Not a bad idea honestly. Would be interesting to see how it affects tech companies since they rely on hypergrowth. My one worry is that instead of divesting they would just play shell games with complex ownership structures.
  • muddi900 4mo ago
    The pre 1980s standards were ridiculous though. However, even if the US moves to some 3 quarters of the way towards now would be a huge improvement. The "consumer harm" standard is idiotic.
    • mmooss 4mo ago
      Would you share a more detailed argument? Right now we only have adjectives: "ridiculous", "idiotic". The US economy generally did very well with those standards, maybe the best it ever did, especially considering distribution of benefits.
      • slibhb 4mo ago
        > The US economy generally did very well with those standards Spurious correlation. Few experts (economists) think old regulations caused economic growth. If we really want to recreate post-war growth, we should destroy half our infastructure and fight a world war. Then, in the years following the end of that war, we can experience catch-up growth.
        • mmooss 4mo ago
          Spurious strawperson. I didn't say they caused it, but they sure didn't stop it. I specifically said it was about distribution, not aggregate growth. There's still no argument for the GGP presented. > the years following the end of that war Until the 1980s? I think some evidence is needed.
      • muddi900 4mo ago
        This is a good podcast on the old regime: https://www.npr.org/transcripts/696337392 https://www.npr.org/transcripts/696337392 Summary of the old regime: Mergers that lead to 5+% market share were blocked. Then the "consumer harm in terms of prices" was adopted. Which swung the pendulum the other way. That is the fundamental economic policy now. Which has lead to abhorrent results. I wrote a comment on previous post that was about how consumer harm standards have warped the discussion on tariffs: https://news.ycombinator.com/item?id=48096236 https://news.ycombinator.com/item?id=48096236
• sega_sai 4mo ago
  I simply don't understand why leveraged buy-out(LBO) is allowed in the first place. It is like paying for the company with the money from the company you are buying.
  • quickthrowman 4mo ago
    It is analogous to a mortgage, you put down X% and the house itself secures the loan, along with PMI if your equity is below 20%. The assets of the business secure the loans in the same way a house secures a mortgage.
    • kokken 4mo ago
      It is not analogous because if you sell your house and the sale money is not enough to cover your mortgage you are still on the hook for what's left of the principal. A leveraged buyout is exclusively on the purchased company's books, so if the company goes to zero the PE parent company is not on the hook for a single penny.
      • DanielHB 4mo ago
        What I don't understand is how the cost of banks repossessing these companies in case of default don't make the math unviable. Unless the company have a lot of fairly stable semi-liquid assets (like real estate) banks should be charging fairly high interest on these loans which would make most of these business unprofitable. Which would increase the rate of defaults (if they are authorized in the first place) and in turn increase interest even further. I guess the PE is always maxxing out the leverage on every deal at _just_ the projected break-even point for loan repayment? But that leaves no room for error or changing market conditions which also increase the rate of defaults and so on.
        • dapperdrake 4mo ago
          Does "the bank" know that it is unviable?
• Michelangelo11 4mo ago
  [dead]
• Brushfire 4mo ago
  Why is there so much attention paid to the buyer (private equity) and no attention paid to the folks who sold the businesses to them?
  • kokken 4mo ago
    Because a sale for cash is a basic legal contract that predates modern society by millenia, whereas a LBO that PE uses to purchase companies is a weak spot in American Capitalism created at the intersection of: 1.Shareholder primacy. Under Delaware corporate law (which governs most large U.S. public companies), once a board decides to sell, directors have a fiduciary duty to maximize the price shareholders receive. A premium cash offer from a PE firm is hard to refuse without legal exposure. 2.Interest deductibility. The tax code lets companies deduct interest payments but not dividends, which makes debt-heavy capital structures more tax-efficient. LBOs exploit a feature of tax law that exists for many reasons unrelated to private equity. 3.Freedom of contract and limited liability. Sponsors can put a thin equity check into a holding company, have that company borrow on the target's assets, and walk away if it fails, because limited liability is the foundation of corporate law generally.
  • skinfaxi 4mo ago
    What would that attention look like? "Long-time pillar of the community local pediatrician retires and sells their practice"? How would you know this attention is getting paid or not unless you are consuming local news from the places this is happening?
    • pelotron 4mo ago
      "Long-time pillar of the community pediatrician unveils true self by selling practice to Devil"
  • magicalist 4mo ago
    > no attention paid to the folks who sold the businesses to them? Why would the retiring dentist selling their practice be a trust or collusion problem?
• bko 4mo ago
  The premise is that PE firms invest in companies, load them up with debt, and maximize profit. And it's especially nefarious in industries where people have "no choice but to pay" > The result is a backlog that reads like a financial opportunity in earnings calls and a crisis in every fire station in the country. As of 2025, REV Group’s backlog stands at $4.5 billion. Wait times for a custom fire truck run to four years. Prices have doubled in a decade: a pumper truck now costs around $1 million; a ladder truck runs over $2 million. Profit margins in the industry have tripled — from the historic 4-to-5 percent range to over 13 percent. The article goes on to talk about how a backlog is actually genius. Here's a quote from a senator: > “This didn’t just happen to you accidentally. This is a business decision, isn’t it? You keep these backlogs like this. […] Another word for this would be a heist. This sounds to me like private equity came in; bought up all of these small companies; combined them; shut down their production; rolled up a huge backlog; massive profits; stiffed these guys; and now you’re making out like bandits.” So you make money by ... not delivering? I'm missing something. > The fire truck industry is the most publicly documented case, but the underlying playbook — acquire, consolidate, reduce supply, extract margin — appears across essential sectors with alarming consistency. Sure, anyone can reduce supply and increase prices if they're a large enough supplier. But companies don't produce up to the point where marginal price is equal to marginal cost out of the goodness of their heart. It's the profit maximizing level. This is economics 101. The article doesn't even try to explain beyond hand waving. No one cares about profit margin, they care about maximizing profit, and you don't do that by creating backlogs. So something is off here and the author is either too incompetent to ask basic questions or just wants to write another PE bad article
  • dapperdrake 4mo ago
    Learn how businesses are priced. The buyer (who PE sells to) is "thinking about" collecting on the backlog. Obviously, the backlog is "fake". EDIT: The backlog is fake or worthless in the sense, that dollars worth of reputation (a.k.a. Brand) were given away to get pennies worth of backlog. Customer satisfaction is real, even in a business valuation sense.
  • ses1984 4mo ago
    Let’s compare two hypothetical companies. They are equal in every way except one has a $4.5b backlog and one has a $0 backlog. Which company would you rather own?
• bonsai_spool 4mo ago
  Setting aside the obviously LLM-generated headings (if not text), this is a serious problem. PE has purchased fire inspection companies in my city such that every company that needs these must contract with the same PE overlord no matter which of the previous 15 companies they used to work with. The new PE overlord will do things like send you a bill for inspection after you inquire about their pricing ("Well, our guy was in the area so he took a look!") while billing you for gas from their home location. This is disgusting on so many levels—no competition here at all, just oppression by those with a lot of money.
• fredley 4mo ago
  The people behind these funds are playing Monopoly IRL, and this in particular makes me very angry. The UK high street has been a notable victim. Gradually, over the past couple of decades, company after company has been snapped up by PE. Not just shops, but restaurants too. Suddenly you realise that the 5 or 6 high street chains that were competing are now owned by the same fund. Quality collapses, prices rise, not just at one chain but everywhere. People stop going, the chain collapses, another empty unit, the fund moves on. It's easy to point at Amazon and internet shopping as having degraded the British high street, but there are several other factors, and PE is a big one.
  • TheOtherHobbes 4mo ago
    The combination of PE extraction and "property values = rent we want to change, even if the property is empty" has been economically catastrophic. PE is often just legalised larceny.
  • c16 4mo ago
    As a consumer, there are many non PE owned restaurants and pubs you can frequent. While you might not be able to change the game, you can absolutely vote with your wallet. The small guys will thank you. Same for Amazon vs going direct to the manufacturers, which is more often than not, China.
    • mschuster91 4mo ago
      > Same for Amazon vs going direct to the manufacturers, which is more often than not, China. That comes with a bunch of problems. Taxes, import duties and import refusals are the biggest one. With Amazon, at least as long as it's sold or fulfilled by Amazon, no matter what, you are going to get the product in a reasonable time frame (1-3 days IME). Shipping... depends. If you're in bad luck, the seller doesn't ship Fedex or DHL, but Yanwen or another one of the usual bunch of "aggregators" that bundle weeks worth of shipment to forward it to the US or Europe and unbundle the shipments there. Assuming your product shows up at your doorstep, legally, you are now the importer and fully responsible for anything related to that specific product - say, an electrical appliance that sets your house on fire. You can't hold anyone accountable but yourself. And finally, if there's defects, you only have to deal with Amazon. Free shipment back, done. With anything straight out of China, you are now responsible for shipments.
• b3lvedere 4mo ago
  [flagged]
  • itake 4mo ago
    One thing I don't see is the other side of this story: the sellers. I don't get why sellers are selling to PE. Can these services not "IPO"? Why do these companies need to sell? When PE takes over medical practices, my understanding is there just isn't enough capital available for a dentist to "cash out". The options are either they find another dentist to buy it, the close the practice, or they sell the private equity...
    • balderdash 4mo ago
      why would you think a public traded company behaves any better than a privately owned one?
      • itake 4mo ago
        My understanding is people don't like the PE / LBO with a single investor, because it loads the company with debt that it pays back via cutting quality and service offerings. My assumption is publicly traded company would have access to better financing terms and a diverse set of investors with less "hunger" the financial shenanigans the PE investors have.
        • balderdash 4mo ago
          Totally agree - but I guess I was getting at is that largest mfg. per the article is a a public company, and the number two is private equity, would we think that there would be a meaningfully different dynamic if they both were public?
    • lizardking 4mo ago
      Going the IPO route is not an option for most of the companies being acquired (vets, plumbers, electricians, construction companies, etc.)
• amazingamazing 4mo ago
  Seems strange to me: 1. No one forced these people to sell. Is the idea that you can’t sell to an entity with more money? If you block that good luck with the world economy. 2. If above is ok is the idea that the new owner is inherently worse because they have more money, whereas as the smaller would be OK then where are the new entrants? 3. Going to the article it is clear enough. These industries just are not lucrative to begin with. PE buys them and raises prices, but this only works because people complain instead of starting rival business. 4. Somehow leaving money on the table in the form of a backlog is bad? Why don’t others start a business and take those orders? Why don't they? Not profitable or worth the hassle. Well there you go. Separately, American manufacturing just seems very uncompetitive.
  • consp 4mo ago
    > but this only works because people complain instead of starting rival business. This reads like fiction. When they corner the market it's of course trivial to just jump in and take that share. No way they will try to be disruptive to you or sue you to hell and back and of course the bank will loan you the pile of money to start a new company since there is no giant corporation to compete with who can squeeze you out in an instance.
    • amazingamazing 4mo ago
      Your comment is the one that seems like fiction. You are saying PE is unbeatable? Per the article there is a backlog of orders. What is stopping one of the previous owners from creating another company and taking them? Sue for what exactly? Of course they will be disruptive, that is what competing means.
      • DangitBobby 4mo ago
        > What is stopping one of the previous owners from creating another company and taking them? ... they sold the original business to retire??
        • 4mo ago
• andai 4mo ago
  Who controls the spice...
• philipwhiuk 4mo ago
  Leveraged buyout should be illegal.
  • elevation 4mo ago
    How would you phrase this though? Plenty of PE firms have the funds to buy your local veterinary clinic or auto body shop with cash; the leverage comes later, when they direct the business that they own to get a loan. How can you make it illegal for the business to get a loan?
    • yread 4mo ago
      > How can you make it illegal for the business to get a loan? That would also be legal. But if you take the assets out of the daughter company you would go to prison for https://web.archive.org/web/20141030194421/http://www.sfo.gov.uk/fraud/what-is-fraud/corporate-fraud/asset-stripping.aspx https://web.archive.org/web/20141030194421/http://www.sfo.go...
      • elevation 4mo ago
        The daughter company would presumable be allowed to purchase goods and services. What prevents those goods and services from being supplied (at a hefty markup) by another company under PE control?
        • yread 4mo ago
          If it's done for the purpose of defrauding debtors of the daughter company, the law
  • hylaride 4mo ago
    I think they should be perfectly legal, but there probably shouldn't be tax advantages for it (carried interest rule, etc).
• herf 4mo ago
  Link to the Musharbash article that spurred the congressional investigation (2025): https://www.thebignewsletter.com/p/did-a-private-equity-fire-truck-roll https://www.thebignewsletter.com/p/did-a-private-equity-fire...
  • tadzikpk 4mo ago
    which contains links to its claims and an author with a name, unlike the above article...
• lenerdenator 4mo ago
  Again, we have broken higher risk, higher reward. If you just keep gutting companies with leveraged buyouts, you're not taking on any real risk. If you're buying up firms that deliver "essential services", you're likely engaging a monopoly. Again, low risk, high reward. A direct violation of the rules of how investments should work. Regulate the monopoly and this goes away.
  • airstrike 4mo ago
    Do you think losing the equity portion of the investment means no risk? It's not fully debt financed. And that debt financing bears an interest proportional to the riskiness of the asset's cashflows. There are lots to hate about LBOs but they aren't entirely devoid of value
    • strgcmc 4mo ago
      The risks are asymmetric in real world terms. For the PE side, the worst-case outcome is bankruptcy of the company they bought via LBO, but because it was an LBO their own exposure is relatively minimal (the lender is the one with the one most capital at risk). At the end of the day, it's a balance sheet item, a cost of doing business, a few digits on a spreadsheet. But for the company that was bought? Those are people's jobs, their livelihood. A community that depended on those jobs to sustain a town's economy. And for company's providing essential services with inelastic demand (like fucking fire trucks), the downside is loss of those services, broken fire trucks, and ultimately loss of life. When you hear "profits over people" as a complaint, it sounds abstract. It is not. Though this specific article is AI slop, the underlying phenomenon is very real (that other commenters have shared other links to better reporting). A very real dollar figure can be crystallized against very real human lives that have been harmed or sacrificed. Most "regular people" (you know, the ones who just want firefighters to have working trucks and ladders, and to come quickly when there's a fire) don't care about the most hyper-efficient allocation of capital through some skewed financial engineering and legal wizardry (especially when the definition of "efficient" allocation is a biased one, that doesn't account for externalities properly, like people fucking dying due to broken or not-enough trucks). But regular people don't really get a "vote", when it comes to LBOs (and I am specifically focusing on the ones that affect essential services). They just get screwed with the increased tax bills that fund the increasing profit margins of the PE firms. That seems unfair to me, but fairness is a matter of politics and not finance. --- Personal disclosure: I made a post a few months back about a related topic (https://news.ycombinator.com/item?id=46307300 https://news.ycombinator.com/item?id=46307300), of PE buying up and consolidating the companies that used to provide software to emergency services, and jacking up the price and taking advantage of inelastic demand. This is a topic I am personally passionate about, and I am still exploring different options for fighting back in various ways.
• basisword 4mo ago
  It's the same around the world. 99% of the time if something has gone to shit, it's because it was bought by private equity and milked for every last penny.
• jjmerle 4mo ago
  Interesting seeing a quote from Sen. Josh Hawley that I agree with... Quote (from article) “This didn’t just happen to you accidentally. This is a business decision, isn’t it? You keep these backlogs like this. […] Another word for this would be a heist. This sounds to me like private equity came in; bought up all of these small companies; combined them; shut down their production; rolled up a huge backlog; massive profits; stiffed these guys; and now you’re making out like bandits.”
  • wmeredith 4mo ago
    As a Missourian who is regular embarrassed by Senator Hawley, I must say that he brings the goods when he has the opportunity to grill an oligarch.
• randusername 4mo ago
  Article doesn't really dig into the angle I personally find most horrifying, strip-mining social capital. In my area PE is gobbling up mom-and-pop apartment complexes, plumbing companies, restaurants, and generally making customers and employees alike pretty miserable. Hard-working founders should be able to cash out, but there has to be a better system than this one. Succession, maybe. Not that we should push an unmysterious destiny on our children, but maybe more ought to consider pulling one?
  • rocketpastsix 4mo ago
    I think part of the problem with the succession idea is that a lot of people in these positions worked these hard jobs to try and give their kids a better life. They encouraged their kids to go to school for their passions and now those kids are in careers far removed from what their parents did. Instead of succession, I wonder if there is a way to make it easier for these people to sell their company when its time to retire to someone who is looking to start the next step of their career. A lot of software engineers joke about becoming farmers, but if they could instead make an easy transition into a small business by buying a small business, we could prevent PE from raiding things.
    • ryandrake 4mo ago
      The vast majority of people can’t just go out and buy a machine shop or laundromat and then start running the business. It’s a risky asset, not like a house where you put down 20% and any bank will loan you the rest. I’d love to own a small franchise restaurant or something in my town but they cost millions that I don’t have. And that’s before you even make it to the question of “can the person that manages to buy it actually live off of it as a lifestyle business?”
      • rocketpastsix 4mo ago
        sure but a restaurant is always going to be a risky asset. I am thinking more in terms of a plumbing business. It's a business that will always have a need, no matter the economy because a bursting pipe doesnt care if its a recession or a booming market. I guess what I would like to see is a pathway to making it easy to buy or start up crucial businesses like a plumbing business, HVAC company, etc. As the current generation of owners want to sell and retire, we should make it easier for people to be able to get in there and buy these companies before PE can.
• phkahler 4mo ago
  >> a structure where 50 to 90 percent of the purchase price is financed by debt, and that debt is loaded onto the balance sheet of the acquired company, not the firm making the acquisition. This just seems wrong. The buyer takes out a loan, how does that become the responsibility of the company they purchased? I thought loans used to buy a business treated the business as collateral, like a home mortgage. What lender would participate in this? and why?
  • NoboruWataya 4mo ago
    > The buyer takes out a loan, how does that become the responsibility of the company they purchased? Because the company they purchased is now a part of them. As for why a lender would agree to it, it's because these transactions are not as simplistic or universally disastrous as they are usually described. A lender will obviously only make that loan if it has a reasonable expectation of being paid back, and most of them are. They may get additional collateral like parent/affiliate guarantees and the loans will have covenants relating to financial performance etc.
• elevation 4mo ago
  Not all PE problems are existential; they will be outcompeted. What keeps a newly graduated Veterinarian from opening her own clinic and undercutting the PE competition? With no massive loans on her books, she can profitably offer lower prices than PE can. She may even drive the local PE clinic out of business.
  • DoneWithAllThat 4mo ago
    Yet there is no evidence of this happening in any industry or area where PE has become the dominant player. Why not? What you’re saying is nice economic theory but it’s clearly not happening.
    • bombcar 4mo ago
      Because the pain is bearable and not too much. If it becomes too much, things actually happen. (This is the dark side of financialization, as it can be used to maximize human misery.)
  • rocketpastsix 4mo ago
    who are these grads graduating without massive loans hanging over their heads?
  • ambicapter 4mo ago
    "Lower your prices to compete with massive sources of capital" Great idea.
  • brendoelfrendo 4mo ago
    > With no massive loans on her books, Except every newly-graduated veterinarian does have a massive loan on their books, in the form of student loans. And even if she didn't, where does the startup capital for her clinic come from? Whether in human or animal medicine, starting your own practice--especially as a new grad--is usually the course of action with the highest-risk-to-lowest-pay ratio.
  • burkaman 4mo ago
    How is a new graduate supposed to start a business without a loan?
• spyckie2 4mo ago
  The irony is that PEs exist largely because of pension funds. So to sum it up (not so nicely) we are transferring value from our current standard of living to pay for retirement checks for our old folks. Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent. If they do not have the higher PE returns, they basically go out if cash in 10 years and everyone would scream bloody murder. But with the higher returns from PE they have 40-50 year runways and people can pretend everything is fine. So PE firms exist to extract value from basically all high quality goods and services to show a high ROI to prop up pensions. They extract wealth by buying up companies and gutting the “extra” things in them - for luxury goods, it’s quality, customer service and warranties (like my venta humidifier or reformation dresses), for services it’s stripping the underlying excess risk management and quality control. One can argue that PEs make the business more efficient but in my opinion they just turn worker or consumer related benefits into profits (stakeholder and business benefits). It’s a transfer of value from worker and consumer to business and asset holders at a massive scale. But sadly it’s not some evil dudes at the top doing this transfer, the market force behind it is because we promised old people way too aggressive paychecks when they retired. Pensions need to invest massive amounts of money into higher rates of return and PEs just happened to be the medium that is the most successful. Sure the people running the PE firm extract a ton of value drying up all luxury quality and robust services from the daily lives of working families, but their take home is a tiny fraction of the wealth they extract (but yes they take home a massive amount of wealth for an individual). Instead the wealth extracted shows up on a 1400$/m for some old person probably living in a retirement home somewhere. So if you wanna fix or ban PE, solve pensions.
  • didip 4mo ago
    Had pension fund just invest in VOO, PE won't need to exist.
  • nemomarx 4mo ago
    Why don't pensions just invest in index funds generally? High required rate of returns or?
    • 4mo ago
• reenorap 4mo ago
  ZIRP created a level of absurd wealth such that the ultra wealthy can buy large swathes of things that they never could before, and they’re doing it. And societal norms and laws can’t keep up with it to protect us from them. Now they are buying fire stations, dentist offices, ski resorts, whatever the fuck they can think of and then raise the prices. Something needs to be done to stop this.
• WarmWash 4mo ago
  Run from investing in PE, run as fast as you can. I (and leaders at my PE-owned company) cannot say enough bad things about private equity. How anyone who managed to make money in their life decides PE is a good investment blows my mind. We are now on our 5th PE firm in 10 years, and just completed a "PE lifecycle" of buy -> merge -> sell -> part out -> merge. None of these PE firms bring anything to the table. Even the hundreds of billions AUM giants. They have zero interest in tangibly improving the company, and lots of interest in cheap window dressings meant to fool other PE firms. Not that they could do much else, because it's mostly business grads with minimal real world exposure, and hunger to be rich above all else. The most critical thing to understand is that they pay themselves "advisory and oversight fees" for the incredibly difficult work of increasing sales targets 300%. These fees can eat 10% of our revenue, and is one click above theft. Trust me, they will lay-off 75% of the company before even considering cutting back their personal take. Never mind the fees they take from investors too. They bill both sides. Also, if they kill some of the companies they acquire, it's the investors loss. It is not their loss. They still collect all their fees just the same. There is a total misalignment between investors and PE firms, where PE firms just want to maximize their looting while investors think they are actually trying to improve the acquired companies. If the invesotrs do see gains, it's mostly because the firm successfully conned another firm into overpaying. Run from investing in PE, run as fast as you can. Recently they changed the law to allow regular people to have PE in their retirement. They are running out of useful idiots, and want access to the general public. DO NOT FALL FOR IT
  • htrp 4mo ago
    so basically the principal - agent problem turned up to 11?
  • matheusmoreira 4mo ago
    Looting is a rather apt word. What really breaks me is the fact that these are the people who are making it. Destructive people who extract every last cent of value from everything in sight are winning. Society actively rewards this. Constructive people who are actively trying to add value to the world face many more risks and difficulties.
  • 4mo ago
• scary-size 4mo ago
  Huh, that somehow reminds me of Crassus from Rome [1] > The first ever Roman fire brigade was created by Crassus. Fires were almost a daily occurrence in Rome, and Crassus took advantage of the fact that Rome had no fire department, by creating his own brigade—500 men strong—which rushed to burning buildings at the first cry of alarm. Upon arriving at the scene, however, the firefighters did nothing while Crassus offered to buy the burning building from the distressed property owner, at a miserable price. If the owner agreed to sell the property, his men would put out the fire; if the owner refused, then they would simply let the structure burn to the ground. After buying many properties this way, he rebuilt them, and often leased the properties to their original owners or new tenants. [1] https://en.wikipedia.org/wiki/Marcus_Licinius_Crassus https://en.wikipedia.org/wiki/Marcus_Licinius_Crassus
  • b65e8bee43c2ed0 4mo ago
    >Upon arriving at the scene, however, the firefighters did nothing while Crassus offered to buy the burning building from the distressed property owner, at a miserable price. sigma
  • usui 4mo ago
    Nice establishment you got here—be a shame if something happened to it. I wonder if the incidence of fires increased during this time.
    • jihadjihad 4mo ago
      Or a side hustle of exorbitant P&C insurance.
  • Balgair 4mo ago
    https://en.wikipedia.org/wiki/Battle_of_Carrhae https://en.wikipedia.org/wiki/Battle_of_Carrhae For the curious, above is how Crassus died. TLDR: Got over his skis and mad with power and money. Decides to invade Parthia. Gets wrecked by horse archers. That ends up being typical for Romans, but this was the first-ish time that happened. Some of those captured legionaries may have ended up in China, though it is unlikely. https://en.wikipedia.org/wiki/Liqian#Lost_Romans_myth https://en.wikipedia.org/wiki/Liqian#Lost_Romans_myth
• thecolorblue 4mo ago
  PE profits sound like other companies opportunities. Unless there are barriers to entry not covered in this article, I would think other companies could move in, deliver a fire truck faster and at a lower cost, and at least take a portion of the market that is able to switch.
  • muddi900 4mo ago
    The Capex and Opex requirements to do anything in the US are THE barriers to entry. Nobody has that kinda cash lying around, banks can't justify such high liabilities, and VCs are not interested in "stable", businesses.
  • jeddawson 4mo ago
    The purchasing process is the barrier to entry. Municipalities are required to run a request for proposal on anything over ~10k. The RFP gets awarded to a PE owned manufacturer that then takes 4+ years to deliver. The municipality is locked into the vehicles they don't have so a new market entry needs to simultaneously establish a track record that qualifies them for being awarded an RFP and be able to wait out the purchase lag. Not impossible, but easier said than done.
• senderista 4mo ago
  This subject deserves better than an AI slop article.
  • avazhi 4mo ago
    Couldn't get through the first line lol. Why would anybody expend time reading something that is probably full of hallucinations? And what's crazy is clearly only a few of us have enough experience with Instruct Mode LLMs to even spot it. The rest of these guys don't even know they're reading slop.
  • triceratops 4mo ago
    To be fair they warned us with that domain name.
• akudha 4mo ago
  If the waiting time for a fire truck is 4 years, can't fire departments import from abroad?
  • adolph 4mo ago
    An interesting aspect of this story is that America has an idiosyncratic approach toward firefighting vehicles that demands very large bespoke vehicles from a limited set of vendors [0] that are primarily used to bring a set of first responders to medical emergencies. [1] This philosophy carries on to other aspects of fire fighting like the very famous wooden ladders of San Francisco. [1] Cost insensitive customers with bizarre business requirements, what could go wrong? 0. https://www.slashgear.com/1890538/why-american-fire-trucks-bigger-than-europe/ https://www.slashgear.com/1890538/why-american-fire-trucks-b... 1. https://www.pulsara.com/blog/why-does-911-send-a-fire-truck-to-a-medical-call https://www.pulsara.com/blog/why-does-911-send-a-fire-truck-... 2. https://sf-fire.org/our-organization/division-support-services/wooden-ladders https://sf-fire.org/our-organization/division-support-servic...
• thelastgallon 4mo ago
  PEs own a LOT more than whats on the article. All kinds of home repair (HVAC, Plumbing, electric), child care, dental offices and many others. They buy the local companies, keep the same name (so folks think it is the owner/local company with awesome yelp reviews), enshittify, jack up prices and extract as much as possible with smooth talking sales people.
• swayam_41 4mo ago
  I really like the model, privatising it can be far better as a private firm employee & equipment's will work better also if execution is correct, it can be cheaper and more productive.
• sanex 4mo ago
  The theme I keep seeing in all of these problems about our economy is unfair access to debt. PE firms get a loan that you can't and then buy out your company? Giant megacorp get a loan for more than your companies value and make an offer you can't refuse. Billionaires live off loans instead of income and avoid paying income taxes. So many of our issues can be traced back to unfair access to debt. Too much cash in the system chasing returns. We need harder money.
• forshaper 4mo ago
  If you go after an entire market, they'll close ranks. If you go after specific business groups (such as REV), they'll probably be easier to divide and rule.
• swordlucky666 4mo ago
  [flagged]
• xrd 4mo ago
  See also Matt Stoller on fire truck private equity: https://www.thebignewsletter.com/p/did-a-private-equity-fire-truck-roll https://www.thebignewsletter.com/p/did-a-private-equity-fire...
  • Sebguer 4mo ago
    this article is literally just an LLM regurgitation of Stoller / Musharbash's reporting and research on the topic.
    • billbrown 4mo ago
      And it blames the sidelining of more than half of LA's fire trucks at production delays for new fire trucks? Well, I say "blames" generously—what it really does is "insinuates" since it never connects the consolidation back to the original charge. Moreover, one company having control of 44% of the market would suggest that there might still be other options available. What trash.
• clearstack 4mo ago
  look at the interest expense line on any PE-backed company 10-K. healthy operating business, absurd debt load. the business doesnt decline — the capital structure slowly kills it.
• SoftTalker 4mo ago
  "PE firms load acquired companies with debt, cut costs aggressively, then resell at a profit" The last part never made sense to be. Where do they find willing buyers for these debt laden, hollowed out husks?
  • blindriver 4mo ago
    That's where the scam is. They sell to their pension fund and mutual fund buddies, and in return when they get a really good deal, those funds will be first in line. It's a scratch-my-back-scratch-yours kind of deal that is utterly corrupt but no one seems to care because the losses are papered over by these huge funds.
• Ozzie_osman 4mo ago
  This is a racket and should be illegal.
• game_the0ry 4mo ago
  This is "you will own nothing and you will be happy" in practice.
• danielmarkbruce 4mo ago
  PE isn't really the issue. Some things just shouldn't be run for profit - doesn't matter who the owner is.
• cs702 4mo ago
  [flagged]
• carabiner 4mo ago
  PE are the management equivalents of slumlords.
• pickledish 4mo ago
  clicks > When a fire truck fails to deploy in a burning building and four people die, the cause isn’t just mechanical failure. It’s a business model. leaves
  • tavavex 4mo ago
    When a user clicks the 'close tab' button, it's not just sending a command to their browser. It's sending a signal of disapproval.
• nargella 4mo ago
  I think an unintended byproduct of prolonged cheap capital is an environment ripe with antitrust issues. I’m all for capitalism mentality but this feels like a logical extreme and is not good for the long term. Other examples not mentioned: eggs, kids athletics, I’ve heard stories in fintech services as well
• dzonga 4mo ago
  a.i written shit - no reading.
• 30minAdayHN 4mo ago
  I've seen this in K-12 EdTech. Most of the companies are owned by PEs. Digital curriculum companies, Assessment companies, Auth companies (like Clever), etc. And these PEs have portfolio of them and keep expanding. Not saying good or bad, just an observation.
• znnajdla 4mo ago
  The Abrahamic religions have a natural safeguard against excessive wealth concentration: ban interest-based loans to private individuals (usury is shunned in the Bible and the Koran) and instead encourage a wealth tax on hoarding that directly transfers charity from the wealthiest to the poorest (tithe or zakaat). Some modern economists have suggested this should work theoretically if properly implemented. See Helmut Creutz, Das Geld-Syndrom (1993) and “The Natural Rate of Interest Is Zero” — Mathew Forstater & Warren Mosler.
  • aeternum 4mo ago
    And which countries does this work for? They all still somehow still manage to have palaces. There's also a strong argument that charity transfers to the poor does far more harm than good. How do you price a field worth of wheat, a mill, or even a local grocery when an airdrop of processed flour and food rations can arrive at any moment with no warning? And how do you get the capital to start one of those when it's illegal to get a loan? Of course there are solutions if you have enough tenacity, but the overall result is far fewer businesses started because the friction is just so much higher.
  • chupchap 4mo ago
    > ban interest-based loans to private individuals LOL, read up on how baking and loans in Islamic countries work. Banks buy whatever you want and then sell it to you partially at a higher rate. The customer then pays a rent for the portion owned by the bank till the principle is paid off. No interest charged technically, but effectively they do pay; except it is now kosher/halal. We humans use language to work around every such restriction by debating on the literal meaning of any such religious restrction.
  • runeks 4mo ago
    > [...] instead encourage a wealth tax on hoarding that directly transfers charity from the wealthiest to the poorest (tithe or zakaat). Hoarding of what? Commodities? Should I be taxed for hoarding firewood before winter? Money? Only poor people hoard money. The wealthy invest it.
• Glyptodon 4mo ago
  Putting the financing debt on the books of the thing that's bought instead of the purchaser's shouldn't be legal IMO. Imagine if you could buy houses and leave the mortgage on the house's book instead of your own. It's a total farce.
• mountainofdeath 4mo ago
  Of course they would. Private equity looks for the following things 1. Things with an inelastic market and fixed demand. 2. Many overlapping small time competitors. 3. Steady cash flow, preferably with low capital costs though not always You can take the cash flow, take debt against the companies own cash flow to buy it, pay yourself back, consolidate, then raise the prices on a captive market.
• czbond 4mo ago
  Funny that Eric Ries book "Incorruptible" was released yesterday - it applies directly to the PE owners who should possibly rethink their approach.
• berellevy 4mo ago
  I wonder if the fractional reserve money system helps perpetuate this in any way?
• djoldman 4mo ago
  What's rarely addressed in these articles is the question: if the product/service is so bad relative to the cost, where's the competition? Specifically in this article about fire trucks, they say that margins have tripled... ok, why isn't anyone jumping on that?
  • tartuffe78 4mo ago
    I imagine it's not trivial to start a fire truck company.
  • somelamer567 4mo ago
    The PE vultures are deliberately targeting business sectors with high barriers to entry. It's part of the grift.
  • jancsika 4mo ago
    > why isn't anyone jumping on that So you're looking to attract investors with smaller margins on specialized $500k trucks that don't yet exist for a sector already monopolized by PE?
• BirAdam 4mo ago
  All of the oldest folks I knew were wrong about many things, but they were right to say that morality must be at the center of all public discourse. Pensions were part of the contract of employment for many old companies. As those companies became more interested in ever higher rates of return without offering higher value to customers, the companies became fragile. Becoming fragile, they were eventually broken. Then the pensions are unfunded by no fault of the employees. A company doesn’t have to make billions per quarter to be solvent, it only needs to beat inflation. Beyond that, the people running the company should have some basic human decency. If they don’t, we as consumers, employees, founders, whatever can and should cease doing business with them.
  • kokanee 4mo ago
    We need to figure out how to effectively organize boycotts, and find a way to actually incentivize participation. I'm spitballing here, but what if we created a browser extension that gives users the option to block various monopolistic/oligarchic tech platforms. If the browser navigates to a blocked platform, we show a "consider these alternatives" page instead. Competitors to the monopolies could offer incentives (raffles, discounts, etc) in exchange for promotion on the recommended alternatives list, creating an incentive to participate in a boycott. Example: a user opts into an Amazon boycott, but later clicks an affiliate link that leads them to a book listing on amazon.com. The browser extension intercepts this and displays a list of other places to shop for that book. Barnes and Noble offers a 10% discount for people who boycott Amazon, so they're the top recommended alternative, and the user gets the book for a discount.
    • BirAdam 4mo ago
      That’d be cool. I am not good at negotiating, sales, or anything g of that sort so I’d be the wrong person to help get companies on-board. I’d love to see something like this tho. I’d certainly use it.
    • deleted 4mo ago
      [deleted]
    • ChaseMeAway 4mo ago
• cadamsdotcom 4mo ago
  > burning building and four people die, the cause isn’t just mechanical failure. It’s a business model. Please edit out the AI-isms in your article. If you do, let me know and I’ll come back and read your thing. Thank you for your attention to this matter.
• casey2 4mo ago
  I haven't read enough Marx to see the thread between PE and a firetruck not being maintained properly or tested before use. It's a good thing that profit margins for manufacturing have increased, it's a bad that cities don't want to pay what a firetruck is worth in a post-industrial country.
• orborde 4mo ago
  Pangram (low false positive AI detector) tags this article as AI-generated: https://www.pangram.com/history/a520d0fd-335f-4cf2-8522-c608eb8e70d4?ucc=GlzlxTjQICE https://www.pangram.com/history/a520d0fd-335f-4cf2-8522-c608...
  • graphememes 4mo ago
    It's 100% AI generated
• ropable 4mo ago
  Everybody gangsta about privatisation until it starts affecting services they personally use. PE funds seem a bit like the latest manifestation of the 80s corporate raiders to me.
• michaelteter 4mo ago
  Unregulated capitalism eats everything, including eventually itself. There are other greed-based systems which also eat themselves, but we live in the era of capitalism as the vehicle of self-destruction. Many of us won’t be alive to see it, but it will result in the fall of the US. Maybe it will be 50 years from now, but I suspect sooner. Once enough safeguards get systematically removed, the rate of growth of the beast becomes unstoppable. Eventually the few who have not been crushed and who have the (illusion of) control will have to wall themselves off in heavily guarded compounds to prevent the masses of desperate poor from overrunning them. It will be like so many dystopian stories that have already been written. I see no way to correct it now, at least not in the US. Moneyed interests clearly have control of the government. The few good civil servants and elected officials are increasingly under pressure to give up their principles and accept pay-to-play, lest they lose their jobs or what little power they had to do good. This isn’t just a right wing problem (US right), because the same money flows to the left. At the end of the day, one side may indeed be more cruel, but they both support the same system.
• 4b11b4 4mo ago
  Fuck private equity practicioners at every end of the spectrum, I don't care what role you play and how big or small the firm is. I heard some crazy anecdote a few months ago about them buying up firefighting software and then just charging fire fighting departments higher prices while the software still sucked and basically holding it hostage while doing no maintenance. Fuck these motherfuckers, can't they have some fucking dignity to do what's right. How are people so lost. Another anecdote is private equity buying up psychologist firms providing therapy to people. The dude told me people walk in with their chat gipity transcripts. The goal of the PE firm was to buy out and make money and then somehow offer some software to give these people a "productive" chat gipity conversation Just get the fuck out of here already? How many fingers up your own ass do you gotta have to keep up that kind of work?
• deleted 4mo ago
  [deleted]
• FireBeyond 4mo ago
  The fire apparatus examples are no exaggeration, either. 2017 my city bought a Pierce ladder truck for $1.1M. The same-specced model that we ordered at the start of 2025 was $2M. Our ambulance costs have gone from $250K to $250K. Engines from $400K to $800K. And everything takes years - we're having to order multiple years ahead of time. Even a "simple" brush truck we waited for 30 months for delivery (and that's counting day 1 being "the day the Ford chassis was delivered to the factory for the brush truck build").
• sperandeo 4mo ago
  [flagged]
• panhandler 4mo ago
  This is an SEO AI-slop article on an AI-slop publication. The bottom of the article advertises the SEO company. Its goal is to be engagement bait to generate plausible backlinks to rank higher in web search. If it sounds substantial, it’s because it’s paraphrasing actual reporting, or it’s hallucinating. I found one of article it’s plagiarizing [1]. Other “articles” on the same site link to the real sources that the AI is regurgitating. The topic is interesting and discussion is thoughtful, but I’m saddened to see it under a fake article like this. [1]: The intro is an AI rewording of this: https://www.atlantanewsfirst.com/2025/12/08/burnout-fire-truck-shortage-risking-lives/ https://www.atlantanewsfirst.com/2025/12/08/burnout-fire-tru...
• giwook 4mo ago
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• mistermaster1 4mo ago
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