[clay_the_ripper]

The flip side is: efficient capital allocation is better for our economy as a whole than trying to save certain jobs for emotional reasons.

Struggling businesses that can’t operate effectively and provide a poor return on capital should be shuttered - the only way to deal with the mountains of paperwork involved is to incentivize very smart people to work at very bad companies. smart people don’t like to work at failing companies. how to reconcile this and ensure efficient capital allocation? huge monetary compensation.

[DANmode]

Is what they’re doing efficient capital allocation?

I’m not convinced anymore.

Market economics aren’t working the same when the government has turned particular knobs to a degree that nobody ever shows back up to serve the market once someone quality disappears……

[throwawayqqq11]

... job displacememt by budgetary cuts or by competition/progress. It seems you conflate PE with the latter (for emotional reasons).

[fallingfrog]

Its a broad strokes overview but id love to see a deeper documentary exploring how this works. If the companies are taking on all this debt, which makes them subsequently implode, who is taking the losses on the loans and why are they still making those loans?

[gamblor956]

The lenders are taking the losses.

Because most businesses take out loans for legitimate reasons. Banks usually charged PE owned companies significantly higher rates for their loans to address the risk(used to work at a PE owned company and we paid 4x prevailing market rate) so PE firms go to great lengths to hide their ownership.

[pcald]

selection bias is why

[blell]

This doesn’t explain anything.