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The data on hostile takeovers by "corporate raiders" very much does not support the characterization here. The category of PE firms you're talking about buy co
by CityOfThrowaway 2y ago
The data on hostile takeovers by "corporate raiders" very much does not support the characterization here.
The category of PE firms you're talking about buy companies that are deeply troubled. Generally due to the management's unwillingness to accept reality and make change, the company is heading towards oblivion one way or another.
Perhaps surprisingly, the vast majority of takeover targets wind up as net job creators on a 5-10 year time horizons. That's despite the fact that they do usually start by divesting assets that don't make sense and laying off non-productive employees. But divested assets aren't generally killed – they are usually sold to somebody else who often does something better with it.
Also, companies conduct massive downsizing and rationalization all the time when in distress, and not only when they are taken over by a "corporate raider".
In the private markets, these actors are definitely distasteful. They do cleanup work that feels bad, and they often get rich doing it. But they also serve a necessary role in the markets.
Companies that are egregiously misusing capital and resources are a drag on the economy. It's a bad thing for there to be a bunch of zombie companies holding onto assets that could be used in better ways.
A more generous framing would be something like a home flipper. They buy properties that are a mess, clean it up real good, throw out the old stuff for recycling, install some modern appliances, and sell it to somebody else.
One of my laments is that there is no automatic equivalent force in the government. Agencies grow and grow, projects grow and grow, all totally decoupled from whether they are achieving any progress whatsoever towards the agency's mission.
I'm not defending the specific actions of this administration (for which I simply don't know enough), but it is refreshing to see the government rummaging through its mess and cutting stuff that is irrational, corrupt, and not serving the mission.
- miltonlost 2y ago> One of my laments is that there is no automatic equivalent force in the government. Agencies grow and grow, projects grow and grow, all totally decoupled from whether they are achieving any progress whatsoever towards the agency's mission. There was. It's the GAO and the inspectors general of the agencies, both of which have been gutted by this administration. > I'm not defending the specific actions of this administration (for which I simply don't know enough), but it is refreshing to see the government rummaging through its mess and cutting stuff that is irrational, corrupt, and not serving the mission. LMAO, you're not defending the specific actions, but you know enough about the actions to know that they are "cutting stuff that is irrational". This is a defense of DOGE but with the "no, i'm NOT defending Musk" veneer that doesn't pass muster. You're giving this administration the benefit of the doubt and a large amount of good faith that they have not earned.
- mattfca 2y agoyou cant call out a bias when you are doing the exact same thing.
- albedoa 2y agoYou absolutely can. What on earth are you talking about.
- const_cast 2y ago[dead]
- CityOfThrowaway 2y agoI was talking generally, not this specific set of cuts. From what I know (and what is generally accepted), there is an abundance of waste in government spending. I don't know anything about this specific Accenture contract, so can't say much about it. But I have enough close contact with government to know with absolute certainty that some amount of cleanup is long past due.
- wadadadad 2y agoThis deviated from the original topic, and I'm not following your metaphor flows. How does your post relate to consultants specifically? Is there an implication that consultants not part of the 'mess'? You say "No automatic force... whether (the agencies) are achieving any progress)". Don't we have oversight agencies and committees? I'm not following your 'grow and grow'; can you provide evidence that all agencies just 'grow and grow' without achieving progress? If not all agencies, then be specific. Also, what evidence is there of "stuff" that is "irrational, corrupt, and not serving the mission"? Which mission? What corruption? What evidence of this? Can you speak more specifically here? Please provide evidence to claims so we can have an discussion around this.
- xvector 2y ago> How does your post relate to consultants specifically? He's not talking about consultants, he's just correcting the pop culture meme that "private equity is evil" which is what the parent comment implied. Everything he describes is correct.
- xkcd-sucks 2y ago> One of my laments is that there is no automatic equivalent force in the government. Agencies grow and grow, projects grow and grow, all totally decoupled from whether they are achieving any progress whatsoever towards the agency's mission. A good metaphor here is apoptosis / programmed cell death (https://en.wikipedia.org/wiki/Apoptosis https://en.wikipedia.org/wiki/Apoptosis)