Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Private equity bought America's essential services

rubbishtalk.com

Post reply on HN
Print view View original

501–510 of 584 posts

Re: Private equity bought America's essential services

#501

Post by ses1984 »

strgcmc wrote: post #309
ses1984 wrote: post #145

Earlier quoted context omitted.

Have you ever heard the phrase ceteris paribus? It means all other things being equal. It's a phrase economists use to discuss things in the ideal, sort of like, "imagine a spherical cow in a vacuum" but for economics. The point of the exercise is not to suppose what other things could have been different to allow these two hypothetical companies to end up in the described state. The point is to actually freeze every…

Ceteris paribus can be stretched to the point of absurdity though. A startup with $4.5b of qualified leads, vs one with zero? Come on now... For the sake of argument, we're imagining both startups have equal levels of investing/funding secured, equally talented founders and employee, equal access to equal networks (i.e. I'm imagining something like defense or aerospace, to make it a little easier to imagine a startup…

You don’t use ceteris paribus to launch into a deep retrospective or forecast. It’s used to exaggerate the effect of a single variable to make a point about that variable, reductio ad absurdum .

You say it’s ridiculous to compare two equal companies with different backlogs, well it’s ridiculous to presume that they could have just produced $4.5b worth of product perfectly efficiently if they wanted to.

It’s just used to make the point that all other things being equal, some backlog is better than no backlog. You can invent all kinds of reasons why having a backlog is bad, but in any of those situations, if everything in the backlog was canceled at once that would probably be bad, right?

Re: Private equity bought America's essential services

#502

Post by subtlejellyfish »

regularization wrote: post #283
spyckie2 wrote: post #118

The irony is that PEs exist largely because of pension funds. So to sum it up (not so nicely) we are transferring value from our current standard of living to pay for retirement checks for our old folks. Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent. If they do not have the higher PE returns, they basically go out if cash in 10 years and everyone w…

> Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent. Pensions fund PE because PE can do a short term cooking of the books in order to smooth out the growth curve. So the return is usually positive each year, not raising problems. Also what does significant mean? Pensions are the main mechanism non-wealthy people are investing in PE. Being that millions…

Significant meaning many PE funds are overwhelmingly (like 75+%) funded by pensions and sovereign wealth funds.

Its been awhile since I worked there, but CalPERS and CalSTRS were the two biggest LPs Blackstone had while I was there.

Re: Private equity bought America's essential services

#503

Post by bigbadfeline »

mgh95 wrote: post #469
bigbadfeline wrote: post #448

Earlier quoted context omitted.

> But sadly it’s not some evil dudes at the top doing this transfer, the market force behind it is because we promised old people way too aggressive paychecks when they retired. You seem to be quite confused about pensions, not only "old people" have pensions. Actually the vast majority of contributions to pensions funds come from people who aren't old at all and are actively employed. > If they do not have the highe…

> You seem to be quite confused about pensions, not only "old people" have pensions. Actually the vast majority of contributions to pensions funds come from people who aren't old at all and are actively employed. This is exactly how pensions work: newer members to the defined benefits plan pay for older members. This isn't surprising. > Where would they "scream"? On the internet? And who'd hear them? The answer is no…

> This is exactly how pensions work: newer members to the defined benefits plan pay for older members.

No, that's now how they work, if that was the case, there wouldn't be any need for PEs to buy and enshitify the assets we are talking about here. Your current description contradicts your previous comment.

I'm not going to explain it to you, there's enough information about the topic.

> At the ballot box.

We don't vote for PEs. And who we vote for makes no difference to them, these truths are so basic, it's a shame you don't know them.

Re: Private equity bought America's essential services

#504

Post by chupchap »

znnajdla wrote: post #393

The Abrahamic religions have a natural safeguard against excessive wealth concentration: ban interest-based loans to private individuals (usury is shunned in the Bible and the Koran) and instead encourage a wealth tax on hoarding that directly transfers charity from the wealthiest to the poorest (tithe or zakaat). Some modern economists have suggested this should work theoretically if properly implemented. See Helmut…

> ban interest-based loans to private individuals

LOL, read up on how baking and loans in Islamic countries work. Banks buy whatever you want and then sell it to you partially at a higher rate. The customer then pays a rent for the portion owned by the bank till the principle is paid off. No interest charged technically, but effectively they do pay; except it is now kosher/halal. We humans use language to work around every such restriction by debating on the literal meaning of any such religious restrction.

Re: Private equity bought America's essential services

#505

Post by BirAdam »

doctorpangloss wrote: post #493
BirAdam wrote: post #459

All of the oldest folks I knew were wrong about many things, but they were right to say that morality must be at the center of all public discourse. Pensions were part of the contract of employment for many old companies. As those companies became more interested in ever higher rates of return without offering higher value to customers, the companies became fragile. Becoming fragile, they were eventually broken. Then…

Yeah, buddy, lemme tell you, every old person you ever knew, if they had the good luck to have bought a house in California in the 80s or older for kopecks, that they pay basically no taxes on, and then will go onto leave in a completely dilapidated state to sell for $1.5m... suddenly they're not talking about the morality of their windfall, right? How do you not see that?

First, I’m not talking about boomers. Second, if I were, those same people paid taxes on that house for decades. Is it not okay for that rate to fall in their latter years? If they sell, they then pay taxes on that sale amount.

Intergenerational war is stupid. Why be angry because someone lived in a time they gave them a benefit? In the case of the boomers, they were also the generation beaten by cops, water cannoned, and shot for being antiwar and pro civil rights. While many boomers are crappy, they’re are also every bit as diverse as any other group.

Finally, the old folks I was thinking of were born in the 20s and 30s, not the 50s.

Re: Private equity bought America's essential services

#506

Post by mgh95 »

bigbadfeline wrote: post #503
mgh95 wrote: post #469

Earlier quoted context omitted.

> You seem to be quite confused about pensions, not only "old people" have pensions. Actually the vast majority of contributions to pensions funds come from people who aren't old at all and are actively employed. This is exactly how pensions work: newer members to the defined benefits plan pay for older members. This isn't surprising. > Where would they "scream"? On the internet? And who'd hear them? The answer is no…

> This is exactly how pensions work: newer members to the defined benefits plan pay for older members. No, that's now how they work, if that was the case, there wouldn't be any need for PEs to buy and enshitify the assets we are talking about here. Your current description contradicts your previous comment. I'm not going to explain it to you, there's enough information about the topic. > At the ballot box. We don't v…

In practice this is exactly how they work, whether it was intended or not. Otherwise it would look a lot less like a defined benefits plan and more like a defined contribution plan.

Re: Private equity bought America's essential services

#507

Post by mmooss »

slibhb wrote: post #420
mmooss wrote: post #261

Earlier quoted context omitted.

Would you share a more detailed argument? Right now we only have adjectives: "ridiculous", "idiotic". The US economy generally did very well with those standards, maybe the best it ever did, especially considering distribution of benefits.

> The US economy generally did very well with those standards Spurious correlation. Few experts (economists) think old regulations caused economic growth. If we really want to recreate post-war growth, we should destroy half our infastructure and fight a world war. Then, in the years following the end of that war, we can experience catch-up growth.

Spurious strawperson.

I didn't say they caused it, but they sure didn't stop it.

I specifically said it was about distribution, not aggregate growth.

There's still no argument for the GGP presented.

> the years following the end of that war

Until the 1980s? I think some evidence is needed.

Re: Private equity bought America's essential services

#508

Post by ninjagoo »

spyckie2 wrote: post #118

The irony is that PEs exist largely because of pension funds. So to sum it up (not so nicely) we are transferring value from our current standard of living to pay for retirement checks for our old folks. Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent. If they do not have the higher PE returns, they basically go out if cash in 10 years and everyone w…

> The irony is that PEs exist largely because of pension funds.

Do you have any evidence for this claim?

> Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent.

Again, please provide some sources for this claim. The S&P 500 index has returned about 15% on average over the past 10 years, and historically returned about 10% on average. [1]

> So if you wanna fix or ban PE, solve pensions.

This is a misinterpretation at best. Pensions do not make operational decisions at PE - PE management does.

This statement mistakes a funding source for the whole business model, which is problematic. Pensions supply capital, but PE’s behavior is from the general PE model: buy companies, use leverage, extract fees, seek exit in 5 to 10 years, and earn management fees plus carried interest. That structure exists whether the capital comes from pensions, sovereign wealth funds, insurers, endowments, family offices, or wealthy individuals. Public pensions are one major funding source, not the whole machine.

This statement also implies that PE is mainly a pension-funding response, which would be a falsehood. PE did not buy nursing homes or hospitals or vet clinics or prison telecoms or ambulance companies or dental chains or infrastructure-like services merely because pensions put in capital.

[1] https://dqydj.com/sp-500-return-calculator/

Re: Private equity bought America's essential services

#509

Post by ninjagoo »

bs7280 wrote: post #302
spyckie2 wrote: post #118

The irony is that PEs exist largely because of pension funds. So to sum it up (not so nicely) we are transferring value from our current standard of living to pay for retirement checks for our old folks. Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent. If they do not have the higher PE returns, they basically go out if cash in 10 years and everyone w…

I've been saying pensions should not exist, as they are contradictory to our political system. Some politician 40 years ago can promise everyone the moon, and never force the next generation to figure it out. I'm from Chicago which has a nightmare pension system that's keeping me from ever buying a home in the city I love, because my property tax increases just go to retired people who moved to Florida. I really appr…

> I've been saying pensions should not exist

So what's your alternative proposal for people in retirement?

Post reply on HN