Private equity is devouring the U.S. economy (theatlantic.com)

Article summary

The number of publicly traded companies in the US has decreased from 8,000 in 1996 to fewer than 4,000 today, with the private equity industry being a significant factor in this decline. Private equity firms buy publicly traded companies, taking them private and exempting them from disclosure requirements, making a significant portion of the market invisible to investors, media, and regulators. This lack of transparency can lead to corporate wrongdoing and economic instability. The article argues that the growth of private equity has created a shadow economy with significant risks to the financial system.

Main themes

• private equity
• corporate transparency
• regulatory oversight
• economic instability
• corporate accountability
• financial markets

What commenters say

• The article's claims about the private equity industry are exaggerated and cherry-picked.
• Private equity firms take advantage of business owners by offering them high prices for their companies, which can lead to negative consequences for consumers.
• The lack of transparency in private equity deals can lead to corporate wrongdoing and economic instability.
• Regulations requiring public companies to disclose financial information are necessary to prevent corporate abuse and protect investors.
• Private equity firms can still be held accountable for their actions despite being private, as they must follow relevant laws and regulations.
• The decline of publicly traded companies is not solely due to private equity, but also due to other factors such as consolidation and increased regulatory burdens.
• The article's central argument about the importance of public financial oversight is valid and relevant to the current economic situation.
• The growth of private equity has created a system where companies can prioritize profits over people, leading to negative social consequences.