Bad Company

The episode reveals how private equity has seeped into everyday life, owning hospitals, day‑care centers, utilities and even large swaths of commercial real estate. By employing leveraged buyouts, firms combine modest equity with 70‑80% bank loans, leaving the acquired company responsible for debt repayment. This structure lets a handful of firms control roughly 9% of the U.S. workforce—over 12 million employees—while extracting value through cost‑cutting and asset stripping, often at the expense of workers and consumers.

A central focus is the carried‑interest loophole, which allows private‑equity managers to pay capital‑gains rates of up to 20% instead of the 37% ordinary income rate. That 17‑percentage‑point gap translates into about $10 billion in lost tax revenue each year. The industry’s political clout is evident: 88% of Congress receives donations from private‑equity‑linked donors, and lobbying groups such as the American Investment Council quietly shape legislation. Attempts to close the loophole have repeatedly stalled, most recently when a single senator’s vote—backed by private‑equity contributions—saved the provision.

Despite federal gridlock, the conversation highlights growing momentum at the state level. Recent bills in Connecticut and other states aim to increase transparency, limit fee structures, and protect workers from aggressive buyouts. Megan Greenwell’s book, *Bad Company*, frames these reforms as practical steps for citizens: contacting local representatives, supporting state initiatives, and demanding corporate accountability. By linking historical critiques of corporate power to today’s private‑equity surge, the episode underscores that change is possible when communities mobilize beyond Washington.