Sunday, June 26, 2016

Your long read for the weekend

A reading recommendation for those with a bit of time on their hands -- check out this deep dive from the New York Times, "When You Dial 911 and Wall Street Answers". It's the first in their "Bottom Line Nation" series on the growing influence of private equity firms in daily public life.
The business of driving ambulances and operating fire brigades represents just one facet of a profound shift on Wall Street and Main Street alike, a New York Times investigation has found. Since the 2008 financial crisis, private equity firms, the “corporate raiders” of an earlier era, have increasingly taken over a wide array of civic and financial services that are central to American life.
Today, people interact with private equity when they dial 911, pay their mortgage, play a round of golf or turn on the kitchen tap for a glass of water.
Private equity put a unique stamp on these businesses. Unlike other for-profit companies, which often have years of experience making a product or offering a service, private equity is primarily skilled in making money. And in many of these businesses, The Times found, private equity firms applied a sophisticated moneymaking playbook: a mix of cost cuts, price increases, lobbying and litigation.
In emergency care and firefighting, this approach creates a fundamental tension: the push to turn a profit while caring for people in their most vulnerable moments.
This is nothing new, of course. The US has a... colorful history with private fire departments, for example. Still, the effects of turning vital public services over to private firms driven by a profit motive are worth remembering when we hear certain people extolling the virtues of deregulation and privatization as a panacea against the evils of "inefficiency".

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