Risks of unregulated finance

Lenore Palladino assesses the multiple risks posed by unregulated private equity and credit:

The growth of private markets threatens not only greater financial risk, but increasing economic power for some of the worst actors in the US political economy. The activities of private equity firm leaders are well-documented: they buy up companies, load them down with debt, and cut costs so aggressively that those companies fall apart. The campaign by workers at Toys R US for the severance they were promised, organized by United for Respect and documented by Megan Greenwell, brought this to many people’s attention. Innumerable communities from the Rustbelt in the Northeast and Midwest, to the oil and refinery towns of the South and Southwest, and the white-collar offices of the sunbelt, have seen the same obligations broken by outside finance taking control of major employers.

Read more here.