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  1. The New YorkerJames Surowiecki1/23/125 min
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    The New Yorker
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    • bill
      Top reader of all time
      6 years ago

      According to Urban Dictionary, that expression, don't hate the player, hate the game, "is both a justification and critic of the men-women social (and some would say biological) dynamics, that entices men (and sometimes women) learning and using highly elaborate methods, sometimes seen as manipulation or social engineering technics, for the main purpose of seducing a women (or man)."

      ...not that that has much to do with this conversation. But interesting, right?

      Anyway, obviously we should simplify the tax code. And, men-women social dynamics aside, I still don't think your use of that expression makes any sense. If "the player" is the PE firm big shot (someone like, say, Mitt Romney) and "the game" is Private Equity (the whole system with all the moving parts, companies, regulatory entities, etc.), than I'm WITH YOU that we should hate the game, not the player. Mitt can/should do whatever he wants in a free country. But the game should go to hell in a hand-basket. It's a bureaucratic brokenness that helps rich people get disproportionately richer without creating true value for others. (I would assume that when you make a fortune in PE you can pretty easily buy enough sway in Washington, and maybe even in the courts, to protect your favorite loopholes and create new ones to suit your needs.)

      Finally, per a friend of mine who worked at a prominent PE firm: it's a misrepresentation of PE firms to say that they acquire "failing" companies. A better term might be "all kinds of companies, especially those at later stages or going through big changes." Besides, most companies are simultaneously succeeding and failing in various ways, all of the time. Organizations, like people, have priorities and values that constantly evolve. PE firms (based on my reading of this article) act like parasites--fly in, suck up some value, and leave other stakeholders worse off than they were initially.

      I guess whether or not you think that's evil or just natural order, healthy darwinism... that's a different story.

      • jeff6 years ago

        You’re making this much more complicated than it is.

        The government sets the rules of the game, everyone else is just a player subject to those rules.

        You, the author and I all seem to agree that the tax loopholes enumerated in the article should be closed.

        What I’m taking issue with is how casually you’re willing to impugn an entire industry. PE firms are not Viking marauders. The arrangements they enter into with other companies are the product of voluntary interactions between consenting adults. It would be irresponsible to pass judgement on any one PE acquisition unless you were directly involved or took the time to study all the details. To categorize PE firms in general as parasitic or evil is just sanctimonious virtue signaling.

        • bill
          Top reader of all time
          6 years ago

          UPVOTE the awesome writing. I'm going to try to use "sanctimonious virtue signaling" in regular conversation.

          DOWNVOTE the main idea of your last paragraph.

          I'll be the first to admit that making generalizations can be risky, but it's still important/productive/necessary to observe trends and patterns and make conclusions based on our own values and judgements.

          "Cops, in America, are too violent," for example, might not be a universal truth (some cops and some departments might be too passive), but, overall, it's an appropriate thing to say and discuss because there is much evidence to support the claim.

          And, regardless, my initial statement ("I'm not cool with PE") was personal ("I") - one more reason that it's not "irresponsible"

          • jeff6 years ago

            You're right that "irresponsible" was a poor word choice since no one is looking to your opinion on the subject. "Ignorant", "inane" or "meaningless" would have all been better choices, but even those fail to capture what I see as the inherently negative and counter-productive aspect of such generalizations.

            Statements such as “I’m not cool with PE” or “Cops, in America, are too violent” serve no purpose other than to perpetuate the circle jerk among the congregation of your chosen echo chamber. You’re taking complex issues and boiling them down into cheap slogans, turning political debate into a team sport and reducing the surface area on which individuals might find common ground or at least better understand each other.

            Not only is it no way to start an open debate, it’s also a fundamentally flawed way of beginning the search for a solution to a perceived problem. If “Cops, in America, are too violent” is not a universal truth, then there’s no blanket federal policy change that would be an appropriate solution to the problem. Engaging on a more granular level (in this example, specific incidents or police departments) is the only way to hope to find an actionable path to progress and bridge the 50/50 two-party split that happens whenever issues are broken down into ten second sound bites.

    • bill
      Top reader of all time
      6 years ago

      Great short article. Definitely worth really reading. I first read it in the print edition of The New Yorker when it came out several years ago. I return to it regularly when I need to remind myself exactly how & why I'm not cool with PE.

      Anybody know if the industry has changed much since this was written?

      • jeff6 years ago

        Exactly how and why are you not cool with PE?

        These firms acquire failing companies and try to maximize the return on their investment using every loophole and exception afforded to them by the regulatory environment in which they operate.

        To me this just seems like the ultimate case of "don't hate the player, hate the game" and a great argument for simplifying the tax code.

        • bill
          Top reader of all time
          6 years ago

          CRAPPPPPP. I just posted a massive comment above, instead of a reply right here. AND it took me 30 minutes to write, FYI. (We need edit and/or delete button!)