New York Times published a guest essay in 2023 titled Private Equity Is Gutting America — and Getting Away With It. It is adapted from a book by Brendan Ballou, a Special Counsel at U.S. Department of Justice, Antitrust Division.

Companies bought by private equity firms are far more likely to go bankrupt than companies that aren’t. Over the last decade, private equity firms were responsible for nearly 600,000 job losses in the retail sector alone. In nursing homes, where the firms have been particularly active, private equity ownership is responsible for an estimated — and astounding — 20,000 premature deaths over a 12-year period, according to a recent working paper from the National Bureau of Economic Research. Similar tales of woe abound in mobile homes, prison health care, emergency medicine, ambulances, apartment buildings and elsewhere. Yet private equity and its leaders continue to prosper, and executives of the top firms are billionaires many times over.

Ballou explains how private equity firms exercise effective control over the companies their funds buy, but are rarely held responsible for the actions of those companies. Acquisitors load targeted companies with debt, extract onerous fees, and cut jobs and product quality.

The author says it’s an enormously profitable “heads I win, tails you lose” sort of arrangement that benefits from taxation at rates lower than the ones paid by their low-level workers.

This situation happened by design, not by accident. Private equity and investment firms have given more than a billion dollars to political candidates and lobbyists and offered lucrative employment to senior government officials recruited to work on their behalf.

While focused on Ontario’s private healthcare, an article in today’s Toronto Star carries a warning about private equity funds, particularly when they assume ownership in service industries.

In Europe, the U.S. and increasingly here, this corporate consolidation is playing out across many sectors, including the care economy — health care, long-term care and child care. Real estate values can be stripped out and sold or leased back to the operations themselves through another arm of the owners’ corporate structure.

Star columnist Armine Yalnizyan wrote about the tapeworm economy that emerges when governments finance private corporations to deliver services to the public. She says it “like introducing a parasite that slowly robs the body of nutrients and destroys its organs.”

BC’s private power industry could be described in similar terms. BC Hydro paid IPPs $7 billion in the last five fiscal years. Secret inflation protected contracts last as long as sixty years and the prices paid have not been based on market value.

Right now there is an ongoing public relations campaign to sell people on the idea that the province urgently needs to award more contracts to private power producers. When those deals are signed, they will be used to finance the wind farms that will be created. Though BC Hydro will be obliged to pay around 10 billion additional dollars to IPP, government will pretend the province’s public debt is not affected.

Economic parasites work in concert with public agencies to take what should be ours to make it theirs.