6 ms·

Plunder: Private Equity's Plan to Pillage America

73 points by wiradikusuma 2y ago

bmitc 2y ago
Very interesting. I'll have to look into this more. It's disheartening to see the evolution of America. In the early 20th century, America was almost a socialist republic with a lot of pro-socialist ideas, policies, trends, etc. But then America morphed into this anti-socialist and anti-communist fervor. But now, many Americans openly and proudly support Russia. Companies and the government sold American manufacturing and supply chains to China. And now, private equity owns America. America has been bought and sold. Even private equity has installed itself in the government All of the politicans and judges who probably couldn't even win their high school student council races now serve as senators, congressmen, and Supreme Court justices. It's not far fetched that they serve those who paid their way to election and appointment. Finding the exact number is hard, but apparently private equity owns about 10-25% of all residential homes (determining the actual number seems quite slippery and in need of far more in depth research). These are homes. It's all sickening. None of these people and now our government care about anything other than a spreadsheet that says they are worth more than they were last year. It's not hard to imagine the negative downstream effects that has on society. Edit: Removed incorrect number from an incorrect headline.
- dukeyukey 2y ago
  So much here is wrong I'm kind of astounded. > And apparently in 2023, private equity accounted for 44% of all residential home purchases. Not true. The actual headline is 44% of _flipped_ single-family homes were purchased by investors. Not overall purchases, and not private equity (https://www.washingtontimes.com/news/2024/mar/15/in-shift-44-of-all-single-family-home-purchases-we/ https://www.washingtontimes.com/news/2024/mar/15/in-shift-44...) > but apparently private equity owns about 25% of all residential homes Also not true. Investors do own about 30% of US housing, but when you remember that around that number of Americans rent it's not surprising at all. Most of those investors are not private equity firms.
  - bmitc 2y ago
    You can just say things that might as well be random, but it would be helpful if you pointed to actual data instead of just claiming things are not true. I didn't just make up the numbers. I found them in articles. I could have and probably should have linked them, but I also wasn't claiming someone was wrong. > So much here is wrong I'm kind of astounded. Pedantically arguing about numbers that don't have any correction of enough magnitude that negates the point doesn't really imply being "astoundingly wrong" to me. Are you saying that private equity and investors (and whatever nebulous definition people want to give that separates the two) own an acceptable amount of housing?
    - smabie 2y ago
      Well what % do they own? It doesn't seem like you even know
      - bmitc 2y ago
        Do you know? It clearly isn't zero. And like I said, it's not the main point (it was literally a side point), and it is very hard to actually find an exact number, which should tell you something. If you find an exact number that's well backed, be sure to let us know.
    - dukeyukey 2y ago
      > if you pointed to actual data instead of just claiming things are not true I did. Follow that Washington Times link. > Pedantically arguing about numbers that don't have any correction of enough magnitude We are talking about an order of magnitude here. You claimed private equity owns more than 10x more homes than is.trur, because you believed the 44% figure straight away. > Are you saying that private equity and investors (and whatever nebulous definition people want to give that separates the two) own an acceptable amount of housing? Hard to define "acceptable", but yes, I believe around 30% of homes being owned by people other than those who live in them ok. Like, my mum, who owns exactly one property (for her eventual retirement, she gets housing through work right now) counts as an investor.
  - 2y ago
- nickff 2y ago
  Where are you getting those numbers? There are a few articles that cite '44% of flipped home purchases', but not 44% of total home transactions. This source says that private equity owns 3.6% of apartments nationwide and 1.6% of rental homes: https://ourfinancialsecurity.org/2022/06/letters-to-congress-new-afr-research-estimating-minimum-number-of-private-equity-owned-housing-units/ https://ourfinancialsecurity.org/2022/06/letters-to-congress...
  - bmitc 2y ago
    It does seem that in my quick search, I came across the 44% number which was then later corrected by the Washington Post but not before a bunch of other articles picked up on the wrong tagline. In terms of the actional numbers, like I said, it's looking harder and harder to actually know the real number, and I'm not The RAND Corporation. From what I can tell, the number is at minimum in the double digit percentages. But it seems like a very slippery number that depends on how you define private equity, corporation, institutional investor, etc. and of course what "home" means. As far as I can tell, my point still stands aside from the incorrect 44% number (which is still alarming, in my opinion).
    - tqi 2y ago
      This response tells me you arrived at your conclusion well before you saw any data.
      - chomskyole 2y ago
        Why? I'm sure that op read stuff before, and this is not the first time this topic was explored and maybe they came to a conclusion based on other data? Just wanted to highlight that this comment displays so much bad faith, dressed in false objectivity. Are you sure you are not saying this because of being subject to intense propaganda? Not saying that your response tells me that, but maybe something worth considering?
        tqi 2y ago
- slackfan 2y ago
  [flagged]
  - bmitc 2y ago
    What other examples devolved into capitalistic fascism, which is effectively what is happening to the United States?
    - kjkjadksj 2y ago
      All of them, no? China is state sponsored capitalism. USSR industries same thing essentially state sponsored capitalism which was taken over by the oligarchs in the Russian federation era. Vietnam also has oligarchs commanding billions today. Hard to even find an example where this isn’t the case. Maybe in Cuba things are more equitable but the US has exiled that country from quite a bit of global trade, and its hard enough raising standard of living in the carribean even with US support or even being a US territory for that matter.
      - bmitc 2y ago
        Thank you for the examples. What is the alternative path and how should countries stay socialist? Are European countries not primarily socialist republics?
        sham1 2y ago
        > Are European countries not primarily socialist republics? No? At most we're a continent of mostly social democracies. The workers don't own the means of production here in general, although cooperatives can be quite strong here. We also have way stronger labour unions than those in the US, for example (although funnily enough, in some ways that distances us from socialist republics since those tended to have the habit of banning labour unions, ironically enough), but these things don't make our countries socialist in nature. Personally, I come from a Nordic country (Finland). Now, some American socialist pundits and politicians, like Bernie Sanders rather famously, tried to argue that the Nordic model is socialist and that we're socialist countries. They'd be wrong on that. While welfare states, we also explicitly have free market economies, which was even brought up by the Danish prime minister after the Sanders comments in 2015 in direct response to the latter. And in general, many people here would probably even be slightly offended by calling us socialists, or at least confused by it. And I think that this would also be the case for people in other parts of Europe, and especially those who were on the Eastern Bloc.
black_13 2y ago
[dead]
llamaimperative 2y ago
Financialization will not stop until all of America is like Boeing: a once great company doing real innovation turned into a financial engineering instrument to funnel wealth upwards... or until we have cultural pushback on the totally unbridled "shareholder primacy" concept that so many Americans treat as a dictate from god these days. Shareholder primacy is a lunatic idea with appropriately lunatic (and totally foreseeable) outcomes.
- credit_guy 2y ago
  > a once great company doing real innovation turned into a financial engineering instrument to funnel wealth upwards That is a failure of the government. On one hand the government should not have allowed Boeing to become the gigantic monopolistic manufacturer that it has become after lots of mergers, including the famed one with McDonnell Douglass. That's a failure of the FTC. Once Boeing became a monopoly, it felt much less the invisible hand of the market, and it could afford to shift its attention from engineering excellence to milking the brand. That's where the FAA should have been a hawk, and it was not. After the 737-Max grounding, Congress got involved, and their report [1] looks quite thorough. I find this paragraph quite telling: > Despite the sweeping and substantive problems that have been identified by this Committee’s investigation as well as various other investigations, both Boeing and the FAA have suggested that the certification of the 737 MAX was compliant with FAA regulations. The fact that a compliant airplane suffered from two deadly crashes in less than five months is clear evidence that the current regulatory system is fundamentally flawed and needs to be repaired. [1] https://democrats-transportation.house.gov/imo/media/doc/2020.09.15%20FINAL%20737%20MAX%20Report%20for%20Public%20Release.pdf https://democrats-transportation.house.gov/imo/media/doc/202...
  - llamaimperative 2y ago
    First of all, Boeing wasn’t and isn’t a monopoly. In absence of these disasters there would’ve been no general appetite to break it up except from “socialists hellbent on destroying American greatness” or some such. Second, were you advocating for stronger regulations when it would’ve mattered? Or is this just another exercise of pinning failure on everything except profit motive (which of course is the reason the regulators are so weak to begin with)?

73 points by wiradikusuma 2y ago

Very interesting. I'll have to look into this more. It's disheartening to see the evolution of America. In the early 20th century, America was almost a socialist republic with a lot of pro-socialist ideas, policies, trends, etc. But then America morphed into this anti-socialist and anti-communist fervor. But now, many Americans openly and proudly support Russia. Companies and the government sold American manufacturing and supply chains to China. And now, private equity owns America. America has been bought and sold. Even private equity has installed itself in the government All of the politicans and judges who probably couldn't even win their high school student council races now serve as senators, congressmen, and Supreme Court justices. It's not far fetched that they serve those who paid their way to election and appointment. Finding the exact number is hard, but apparently private equity owns about 10-25% of all residential homes (determining the actual number seems quite slippery and in need of far more in depth research). These are homes. It's all sickening. None of these people and now our government care about anything other than a spreadsheet that says they are worth more than they were last year. It's not hard to imagine the negative downstream effects that has on society. Edit: Removed incorrect number from an incorrect headline.

dukeyukey 2y ago
So much here is wrong I'm kind of astounded. > And apparently in 2023, private equity accounted for 44% of all residential home purchases. Not true. The actual headline is 44% of _flipped_ single-family homes were purchased by investors. Not overall purchases, and not private equity (https://www.washingtontimes.com/news/2024/mar/15/in-shift-44-of-all-single-family-home-purchases-we/ https://www.washingtontimes.com/news/2024/mar/15/in-shift-44...) > but apparently private equity owns about 25% of all residential homes Also not true. Investors do own about 30% of US housing, but when you remember that around that number of Americans rent it's not surprising at all. Most of those investors are not private equity firms.
- bmitc 2y ago
  You can just say things that might as well be random, but it would be helpful if you pointed to actual data instead of just claiming things are not true. I didn't just make up the numbers. I found them in articles. I could have and probably should have linked them, but I also wasn't claiming someone was wrong. > So much here is wrong I'm kind of astounded. Pedantically arguing about numbers that don't have any correction of enough magnitude that negates the point doesn't really imply being "astoundingly wrong" to me. Are you saying that private equity and investors (and whatever nebulous definition people want to give that separates the two) own an acceptable amount of housing?
  - smabie 2y ago
    Well what % do they own? It doesn't seem like you even know
    - bmitc 2y ago
      Do you know? It clearly isn't zero. And like I said, it's not the main point (it was literally a side point), and it is very hard to actually find an exact number, which should tell you something. If you find an exact number that's well backed, be sure to let us know.
  - dukeyukey 2y ago
    > if you pointed to actual data instead of just claiming things are not true I did. Follow that Washington Times link. > Pedantically arguing about numbers that don't have any correction of enough magnitude We are talking about an order of magnitude here. You claimed private equity owns more than 10x more homes than is.trur, because you believed the 44% figure straight away. > Are you saying that private equity and investors (and whatever nebulous definition people want to give that separates the two) own an acceptable amount of housing? Hard to define "acceptable", but yes, I believe around 30% of homes being owned by people other than those who live in them ok. Like, my mum, who owns exactly one property (for her eventual retirement, she gets housing through work right now) counts as an investor.
- 2y ago
nickff 2y ago
Where are you getting those numbers? There are a few articles that cite '44% of flipped home purchases', but not 44% of total home transactions. This source says that private equity owns 3.6% of apartments nationwide and 1.6% of rental homes: https://ourfinancialsecurity.org/2022/06/letters-to-congress-new-afr-research-estimating-minimum-number-of-private-equity-owned-housing-units/ https://ourfinancialsecurity.org/2022/06/letters-to-congress...
- bmitc 2y ago
  It does seem that in my quick search, I came across the 44% number which was then later corrected by the Washington Post but not before a bunch of other articles picked up on the wrong tagline. In terms of the actional numbers, like I said, it's looking harder and harder to actually know the real number, and I'm not The RAND Corporation. From what I can tell, the number is at minimum in the double digit percentages. But it seems like a very slippery number that depends on how you define private equity, corporation, institutional investor, etc. and of course what "home" means. As far as I can tell, my point still stands aside from the incorrect 44% number (which is still alarming, in my opinion).
  - tqi 2y ago
    This response tells me you arrived at your conclusion well before you saw any data.
    - chomskyole 2y ago
      Why? I'm sure that op read stuff before, and this is not the first time this topic was explored and maybe they came to a conclusion based on other data? Just wanted to highlight that this comment displays so much bad faith, dressed in false objectivity. Are you sure you are not saying this because of being subject to intense propaganda? Not saying that your response tells me that, but maybe something worth considering?
      - tqi 2y ago
slackfan 2y ago
[flagged]
- bmitc 2y ago
  What other examples devolved into capitalistic fascism, which is effectively what is happening to the United States?
  - kjkjadksj 2y ago
    All of them, no? China is state sponsored capitalism. USSR industries same thing essentially state sponsored capitalism which was taken over by the oligarchs in the Russian federation era. Vietnam also has oligarchs commanding billions today. Hard to even find an example where this isn’t the case. Maybe in Cuba things are more equitable but the US has exiled that country from quite a bit of global trade, and its hard enough raising standard of living in the carribean even with US support or even being a US territory for that matter.
    - bmitc 2y ago
      Thank you for the examples. What is the alternative path and how should countries stay socialist? Are European countries not primarily socialist republics?
      - sham1 2y ago
        > Are European countries not primarily socialist republics? No? At most we're a continent of mostly social democracies. The workers don't own the means of production here in general, although cooperatives can be quite strong here. We also have way stronger labour unions than those in the US, for example (although funnily enough, in some ways that distances us from socialist republics since those tended to have the habit of banning labour unions, ironically enough), but these things don't make our countries socialist in nature. Personally, I come from a Nordic country (Finland). Now, some American socialist pundits and politicians, like Bernie Sanders rather famously, tried to argue that the Nordic model is socialist and that we're socialist countries. They'd be wrong on that. While welfare states, we also explicitly have free market economies, which was even brought up by the Danish prime minister after the Sanders comments in 2015 in direct response to the latter. And in general, many people here would probably even be slightly offended by calling us socialists, or at least confused by it. And I think that this would also be the case for people in other parts of Europe, and especially those who were on the Eastern Bloc.

black_13 2y ago

[dead]

llamaimperative 2y ago

Financialization will not stop until all of America is like Boeing: a once great company doing real innovation turned into a financial engineering instrument to funnel wealth upwards... or until we have cultural pushback on the totally unbridled "shareholder primacy" concept that so many Americans treat as a dictate from god these days. Shareholder primacy is a lunatic idea with appropriately lunatic (and totally foreseeable) outcomes.

credit_guy 2y ago
> a once great company doing real innovation turned into a financial engineering instrument to funnel wealth upwards That is a failure of the government. On one hand the government should not have allowed Boeing to become the gigantic monopolistic manufacturer that it has become after lots of mergers, including the famed one with McDonnell Douglass. That's a failure of the FTC. Once Boeing became a monopoly, it felt much less the invisible hand of the market, and it could afford to shift its attention from engineering excellence to milking the brand. That's where the FAA should have been a hawk, and it was not. After the 737-Max grounding, Congress got involved, and their report [1] looks quite thorough. I find this paragraph quite telling: > Despite the sweeping and substantive problems that have been identified by this Committee’s investigation as well as various other investigations, both Boeing and the FAA have suggested that the certification of the 737 MAX was compliant with FAA regulations. The fact that a compliant airplane suffered from two deadly crashes in less than five months is clear evidence that the current regulatory system is fundamentally flawed and needs to be repaired. [1] https://democrats-transportation.house.gov/imo/media/doc/2020.09.15%20FINAL%20737%20MAX%20Report%20for%20Public%20Release.pdf https://democrats-transportation.house.gov/imo/media/doc/202...
- llamaimperative 2y ago
  First of all, Boeing wasn’t and isn’t a monopoly. In absence of these disasters there would’ve been no general appetite to break it up except from “socialists hellbent on destroying American greatness” or some such. Second, were you advocating for stronger regulations when it would’ve mattered? Or is this just another exercise of pinning failure on everything except profit motive (which of course is the reason the regulators are so weak to begin with)?