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These Are the Plunderers

How Private Equity Runs—and Wrecks—America


Gretchen Morgenson and Joshua Rosner (View Bio)
Hardcover: Simon & Schuster, 2023.

These Are the Plunderers

Much has been written about the widening gulf between rich and poor, the pernicious effects our deepening income inequality has on the US’s well-being, and how our style of capitalism has failed to provide a living wage for so many Americans. But nothing has fully detailed the crucial role a small cohort of elite financiers has played in this dispiriting outcome over the past thirty years. Until now. Pulitzer Prize–winning journalist and bestselling author Gretchen Morgenson, with coauthor Joshua Rosner, unmask the small group of celebrated Wall Street financiers who use excessive debt and dubious practices to undermine our nation’s economy while enriching themselves: private equity.

These Are the Plunderers clearly traces the thirty-year history of corporate takeovers in America and private equity’s increasing dominance. Morgenson and Rosner investigate some of the biggest names in private equity, exposing how they buy companies, load them with debt, and then bleed them of assets and profits.

Private equity relies on debt—and lots of it. Morgenson and Rosner show how companies absorbed by private equity have worse outcomes for everyone but the financiers: patients at private equity-owned nursing homes are more likely to die; companies owned by private equity are more likely to go bankrupt; healthcare costs are higher at private equity-owned operations; workers at private equity-owned companies across the nation are more likely to have their benefits and pensions slashed or lose their jobs; retirees from private industry as well as school teachers, firefighters, medical technicians, and other public workers have lower returns on their pensions because of the fees private equity extracts from their investments. You’re worse off because of private equity.

These Are the Plunderers exposes the greed and pillaging in private equity, revealing the many ways these billionaires have bled our economy.

A Wall Street Journal bestseller!

"Pulitzer Prize-winning journalist Morgenson, along with research-consultancy managing director Rosner, uncover the 30-year history of private equity and its impact on American lives. Private-equity firms, the authors contend, buy companies and load them with debt while bleeding them of assets. The firms then sell the companies to new owners at a substantial profit for themselves while the companies go bankrupt. Sears and Toys “R” Us are prime examples. This causes job losses, a move away from pension compensation, and crumbling industries. When private capital comes into sectors like health care and public-service jobs like firefighting, individuals often shoulder a larger tax burden to fund those pensions. These and many more examples highlight the history of private-equity development and the destruction that this type of quasiregulated capitalist venture has caused, especially to the middle class and working poor. Readers will be drawn into the duo’s storytelling, and even those who aren’t financially savvy will be able to grasp the topic. It’s a must-read for all for help in understanding a different side of capitalism." — Booklist (starred review)

"Morgenson, senior financial reporter for NBC News, and Rosner, a financial policy consultant, follow their 2011 collaboration, Reckless Endangerment, with a blistering critique of how private equity 'extracts wealth from the many to enrich the few.' Damning case studies reveal how such firms as Apollo Global Management and the Blackstone Group have made billions by buying struggling enterprises and imposing drastic cost cutting to the detriment of customers and employees. The authors describe how in 2007, Apollo bought the Noranda smelting company in New Madrid, Mo., and forced it to take on hundreds of millions of dollars in debt to pay Apollo executives, cratering the region’s economy when the company shuttered under the weight of its debt. Detailing how firms stymie regulation, the authors trace how Blackstone funded a fake grassroots group that ran ads against legislation that would have reined in Blackstone’s practice of sending “surprise” medical bills to patients who used emergency rooms owned by the firm. Morgensen and Rosner excel at capturing the complex financial maneuverings in crisp, accessible prose, and horror stories about how buyouts shortchanged nursing home residents and life insurance policy holders drive home the callousness of the private equity business model. Fiery and incisive, this is an essential account of how Wall Street pilfers the pockets of ordinary Americans." — Publishers Weekly (starred review)

"In These Are the Plunderers: How Private Equity Runs — and Wrecks — America, a new book by Gretchen Morgenson and Joshua Rosner, the arguments are about as subtle as a wrecking ball. It’s a measure of just how inflamed the rhetoric can be that when I arrived at the chapter called ‘‘Like When Hitler Invaded Poland in 1939,’’ I assumed the authors were the ones drawing the analogy. In addition to the ‘plunderers’ of the title, their book is full of ‘money-spinners,’ ‘buyout boys,’ ‘pirates,’ ‘pillagers’ and ‘marauders’; a resident at a private equity-owned nursing home was forced to undergo, in the authors’ ghastly description, ‘a Bataan-like death march of therapy sessions.’ But it turned out that the line about Hitler’s invasion of Poland came from Stephen A. Schwarzman, the chairman and chief executive of Blackstone, one of the world’s largest private equity firms.... Morgenson and Rosner marshal considerable evidence for their case.... Morgenson is a financial reporter for NBC News and a former business columnist for The Times; Rosner is a financial analyst. [They] set out to explain what private equity is and show the damage it can do. They describe how firms like Apollo Global Management, KKR and the Carlyle Group buy up companies using very little of their own money, load the companies with debt and then squeeze them for profits." — Jennifer Szalai, The New York Times  (Read the full review)

"The troubled story of private equity, which is anything but equitable. Private equity, write financial journalists Morgenson and Rosner, typically builds nothing. Instead, it leverages troubled companies, loots what assets they have, trims expenses to the bone, and often leaves acquisitions in bankruptcy or ruin. One philosopher the authors quote calls it 'asshole capitalism,' and while the authors are a touch more genteel, they don’t hesitate to call the practitioners of 'this rapacious form of capitalism' pirates and worse. By way of example, they look into the private-equity acquisition of nursing homes, a favorite target. In those cases, equity ownership equates to a far higher death rate, more visits to emergency rooms, and increased Medicare costs. Private equity has also absorbed huge chunks of the medical sector, laying off doctors and cutting out essential services even at the height of the coronavirus pandemic. On that note, the authors observe, private owners took great pains to use the cheapest possible ventilators for Covid-19 patients in critical care, which finally resulted in a federal fine of $40.5 million, a fraction of what they made. As Morgenson and Rosner clearly show, the pirates are flourishing; while there were but three 'debt-fueled billionaires' in 2005, there were 22 in 2020. Much of this wealth comes from self-dealing, for apart from owning medical providers, private equity is also heavily invested in insurance, ripe with the possibilities of conflict of interest. No matter what the sector—and equity is now moving rapidly into education—the modus operandi is the same: 'slash costs, eliminate higher-paid union workers, and reduce employee benefits; shut down less profitable divisions; or acquire competitors to bolster the pricing power of the company they own.' In addition, these firms, which have doubled in number in the last decade—are well protected in Congress. A well-documented, maddening book that cries out for legislative reform and regulation." — Kirkus Reviews

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