How did private stocks kill the American dream

In her new book, Bad Company: Special stocks and the death of the American dreamJournalist and wireless members Megan Greenwell It lists the devastating effects of one of the most powerful forces that are not understood in modern American capitalism. Flowing with criticism, largely unorganized, unnecessarily focused on profit, Private stock companies They quietly reshaped the American economy, as they acquired large parts of industries ranging from healthcare to retail – I often leave financial ruin in their wake.

Greenwell writes that twelve million people in the United States are now working for companies owned by private stocks, or about 8 percent of the total working population. Her book focuses on the stories of four of these individuals, including the director of the American “R” games, which is losing the best job she had ever and Wyoming doctor who watches his country hospital, which cut the basic services. Their collective experiences are a cursed narration of how to replace innovation with financial engineering and the methods that everyone pays by everyone except those in the summit.

In a review Corporation For Bloomberg, an executive of private shares has long accused Greenwell of searching for sad stories with inevitably.Sad ends“But the characters chosen by Greenwell are not only sitting and watching because private stocks destroy their societies.

Greenwell spoke to WIRED late last month about what private stocks are and what they have turned different industries, and what workers do to restore their strength.

This interview was released for clarity and length.

Wireless: What are the private stocks? How is the business model different from investment capital?

Megan GreenwellPeople are mixed in private stocks and investment capital all the time, but it is quite reasonable that ordinary people do not understand the difference. Basically, the easiest way to explain the difference is that investment capital companies invest money, usually in startups. They take a stake in the company and expect a kind of returns over time. It also plays a much longer game than private stocks.

But the way in which private stocks operate, especially with the acquisitions of benefiting from them, which is what I focus on in the book, is that they buy companies directly. In investment capital, you put your money, you pledge it to the CEO, and you may have a seat on the board of directors. But in the profitable acquisition model, the private stock company is really the owner and control of the wallet company.

How do private stock companies determine success? What types of companies or companies are attractive to them?

In investment capital, VCS assesses whether a deal will be concluded based only on whether they believe that the company will be successful. They are looking for alone. Will this company be the following Uber? Special shares are looking to earn money from companies in ways that do not require the company itself actually earning money. This is like the biggest thing.

So it is less than gambling.

It is very difficult for private stock companies to lose money on deals. They get 2 percent management fees, even if they run the company on the ground. They are also able to withdraw all these tricks, such as selling real estate to the company and then imposing fees on the company on the same land that you used to own. When private stock companies get loans to buy companies, debts are set from these loans not for the private stock company but for the wallet company.