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by sbarre 42 days ago
It's the problem of all the employees (and potentially customers) of the company being plundered.

They have no say in the matter, and given that the lender can probably absorb the loss without, you know, missing mortgage payments or losing health insurance, I would absolutely argue it's not just their problem.

You can certainly hold the opinion that "it's just business" but it feels like an unnecessary part of business that very often has real disruptive and detrimental effects on average working people, for the sole benefit of rich people getting richer.

And yes I get that it's not just a PE problem, but PE is a big one of these kinds of problems.
1 comments
twoodfin 42 days ago
This is a fundamental misunderstanding of the US employment model. Businesses can do all sorts of dumb things that end up making them unable to continue to invest in employees. The check against that is the greedy owners.

Regulations designed to ensure businesses never take risky bets lest they have to lay people off would be a nightmare of unintended consequences and surely in aggregate hurt employment.

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dgellow 42 days ago
I assume the person you answered is saying that level of risk taking should be regulated. Not that no level of risk should be allowed if they have to fire people. Surely there is a point where you want some guardrails, so the C-suite has to at least take in account their employees as part of their risk assessment
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brookst 42 days ago
I don’t see it.

Is the idea that big companies take too many risks today? If so, I’d love to see data, because the usual knock on big companies is they become dinosaurs and risk-averse, and therefore stop innovating and eventually get displaced by upstarts.

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sbarre 42 days ago
You're bringing your own conclusions to this, I never said anything about regulation.

I was just responding to OP who said that PE plundering via debt loading is only the lender's problem when things don't work out, and I assert that it is not.

Employees often pay a much more impactful price when PE-driven cuts occur (whether by design or because the plan failed).

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