Ban companies from owning other companies? How would that work exactly?
Private equity is a convenient whipping boy for ignorant, low-information HN users who don't understand the basics of how finance works. You can certainly find examples of destructive or unethical behavior if you dig deep enough. What you don't see in the news are all the cases where PE saved companies that would have otherwise gone bankrupt.
> ignorant, low-information HN users who don't understand the basics of how finance works
I though HN was a site that welcomed people of all levels of knowledge and shared thoughts, ideas, and resources to help people learn so we can elevate each other. Why are you coming at someone who freely admitted they lack understanding and tossing out a dismissive reply to them instead of saying: "Let me help fill in the knowledge gap here."
> Private equity is a convenient whipping boy for ignorant, low-information HN users who don't understand the basics of how finance works. You can certainly find examples of destructive or unethical behavior if you dig deep enough. What you don't see in the news are all the cases where PE saved companies that would have otherwise gone bankrupt.
This is an unnecessarily aggressive comment and not appropriate.
But also, your own comment is information-free. Why don’t you share actual examples and we can determine if those are significant enough to erase the anecdotal evidence from the other side. Virtually all examples of PE I’ve seen are extractive. They don’t result in a better product. They are instead just lazy arbitrage relying on the power of capital, vendor lock-in, switching costs, and the limited capital of their abused customers.
As for “how would that work exactly” - like anything else. We can come up with ways to classify companies as private equity and enact enormous taxes on them. Or pass other types of regulations into law.
Sure, people mostly call out private equity when you see a group trying to cobble together local monopoly power over some necessity of life just to extract more from everyone, or trying to financially optimize something by that was never financial before. There are of course many more benign examples that no one pays attention to. But the fact remains that there are PE firms doing massively harmful things to extract wealth.
When laypeople criticize private equity, what they almost always mean to refer to are leveraged buyouts. I suspect you’d acknowledge that, if a private equity firm sees a strategy to turn around a business operationally but doesn’t produce enough returns to service their debt, they won’t pursue it even though the original owner likely would have.
the PE business model depends on a lot of discretionary financial regulation.
For example, banks are given pretty generous capital rule treatment when they loan money to PE firms to increase leverage. We could stop that. They also get a lot of tax preferences that increase returns to investors and managers.
You, presumably, have examples of these cases. Could you show them to us, please? (Given your understanding of the evidence available to us "ignorant, low-information HN users", you know you're making a bold claim, which creates a corresponding burden of proof.)
The rules are arbitrary, the rules can be changed at any time. Finance is simply a construct on top of lower level primitives (primarily the legal framework around property ownership and corporate entity law). Totally fine for folks to ask which rules matter, which don't, and which can be changed and how long it will take. Be curious!
If the President can sign EOs banning private equity/institutional ownership of homes [1], OP's ask does not seem to be that out there imho; again, all of these rules are arbitrary and can change at any time. How do we change rules around ownership? We change laws or how they're applied.
I don't think a ban is required. Other countries (in the EU?) have put restrictions on it that prevent the abuses you see in the US. Why don't we do that? Because US Congress has been neutered and that appendage of US politics has withered and died.
Private equity is simply a person (or small group of people) owning a company. Basically every small business in the US.
The problem is not private equity, but that private equity engages in corporate raiding--buy up a company, borrow, extract capital, sell it to suckers who don't see the problems. Dig into practically all malfeasance and you'll find it's someone who benefits from making the future value of something look better than it really is and then leaving the problem for somebody else. At the executive level I think the answer is mandating income above a certain threshold be paid over time based on the future value. (Stuff that's actively traded would be easy: Let's say the cap was $1m. Pay the CEO 10m? No, he gets $1m, plus shares currently worth $1m to be delivered in a year, shares currently worth $1m to be delivered in two years and so on.) And while there is pending income they are categorically prohibited from any transaction that benefits from a drop in share price. Inadvertent (say, bought a fund that shorted the stock) it's a 100% tax rate, deliberate and all pending shares are forfeit. I have no idea of an answer with the PE problem.
It'd be difficult to ban what we commonly describe as private equity (a.k.a. PE firms) without banning the private (a.k.a. random people) from being able to hold equity. Someone smart might be able to ban the kind of investment vehicles that have become the bane of modern productivity but we do still need some mechanism to allow investment.
Well, let's start with banning debt push down and then move on to the next tool used to privatise profit and socialise risks. You know, it used to be that unfair business practices were researched and banned, simple as that. Just throwing up your hands and saying "Well, what to do?" when there's, you know, a whole science in which people are trained, is disingenuous.
they increase productivity, which is one of the most important part of the real economy, separates a lot of grueling manual labor while starving (so the Malthusian state) from having so much economic surplus that we have the opposite of starving in advanced economies.
Im gonna speculate they were referring to the part of private equity where you buy businesses to load them up with debt to buy more businesses ad nauseum
nradov|12 days ago
Private equity is a convenient whipping boy for ignorant, low-information HN users who don't understand the basics of how finance works. You can certainly find examples of destructive or unethical behavior if you dig deep enough. What you don't see in the news are all the cases where PE saved companies that would have otherwise gone bankrupt.
codingdave|12 days ago
I though HN was a site that welcomed people of all levels of knowledge and shared thoughts, ideas, and resources to help people learn so we can elevate each other. Why are you coming at someone who freely admitted they lack understanding and tossing out a dismissive reply to them instead of saying: "Let me help fill in the knowledge gap here."
SilverElfin|12 days ago
This is an unnecessarily aggressive comment and not appropriate.
But also, your own comment is information-free. Why don’t you share actual examples and we can determine if those are significant enough to erase the anecdotal evidence from the other side. Virtually all examples of PE I’ve seen are extractive. They don’t result in a better product. They are instead just lazy arbitrage relying on the power of capital, vendor lock-in, switching costs, and the limited capital of their abused customers.
As for “how would that work exactly” - like anything else. We can come up with ways to classify companies as private equity and enact enormous taxes on them. Or pass other types of regulations into law.
ericd|12 days ago
SpicyLemonZest|12 days ago
lokar|12 days ago
For example, banks are given pretty generous capital rule treatment when they loan money to PE firms to increase leverage. We could stop that. They also get a lot of tax preferences that increase returns to investors and managers.
wizzwizz4|12 days ago
toomuchtodo|12 days ago
If the President can sign EOs banning private equity/institutional ownership of homes [1], OP's ask does not seem to be that out there imho; again, all of these rules are arbitrary and can change at any time. How do we change rules around ownership? We change laws or how they're applied.
[1] Congressional housing deal faces new hurdle as Trump pushes investor ban - https://www.politico.com/news/2026/02/13/housing-deal-faces-... - February 13th, 2026
> What you don't see in the news are all the cases where PE saved companies that would have otherwise gone bankrupt.
Please provide citations of companies worth saving were saved by PE. I will start with the only one I know: Barnes & Noble.
calcifer|12 days ago
Dig deep enough? Please. Merely tilt your head slightly upwards, and let your eyes feast on countless examples.
e40|12 days ago
LorenPechtel|12 days ago
The problem is not private equity, but that private equity engages in corporate raiding--buy up a company, borrow, extract capital, sell it to suckers who don't see the problems. Dig into practically all malfeasance and you'll find it's someone who benefits from making the future value of something look better than it really is and then leaving the problem for somebody else. At the executive level I think the answer is mandating income above a certain threshold be paid over time based on the future value. (Stuff that's actively traded would be easy: Let's say the cap was $1m. Pay the CEO 10m? No, he gets $1m, plus shares currently worth $1m to be delivered in a year, shares currently worth $1m to be delivered in two years and so on.) And while there is pending income they are categorically prohibited from any transaction that benefits from a drop in share price. Inadvertent (say, bought a fund that shorted the stock) it's a 100% tax rate, deliberate and all pending shares are forfeit. I have no idea of an answer with the PE problem.
groundzeros2015|12 days ago
This is just a boogie man media term. There are good owners/investors and bad.
joejoe638|12 days ago
PE is finalisation of business, its ownership is far more similar to a mortgagee than an owner in every sense of the word.
techgnosis|12 days ago
triceratops|12 days ago
shermantanktop|12 days ago
Is this a definitional quibble or do you not believe there is a problem?
munk-a|12 days ago
bux93|12 days ago
pas|12 days ago
https://www.nber.org/system/files/working_papers/w26371/w263...
the finding is that on average, target firms add jobs and see improved labor productivity
mr_important|12 days ago
budududuroiu|12 days ago