Two Crises, One Cause

And How We Rebuild

The heist wasn’t an accident.
And it wasn’t isolated.

It wasn’t just Toys R Us.
It wasn’t just JoAnn Fabrics.
It wasn’t just one hospital, one town, one lost job, one empty mall.

It was — and is — a system.
A machine designed to strip-mine value out of the real economy while protecting and enriching the people already at the top.

Private equity didn’t invent this machine.
They simply became its most efficient operators.

The Two Crises Are One Crisis

This week, in False Promises, we mapped how political corruption, short-term thinking, and false solutions are actively weakening America’s global standing.

Here, in The Private Equity Heist, we mapped how financial predation and corporate looting are hollowing out America’s internal strength — its businesses, its workers, its communities.

They are not separate problems.
They are symptoms of the same disease.

A country led by liars and grifters, serving liars and grifters, at the expense of everyone else.

• Where the debts are never really paid — because the people who caused them are never the ones paying.

• Where success is measured not by what you build, but how much you can grab before the roof caves in.

• Where the public is left clinging to slogans and scapegoats while the real looters slip away smiling.

What We Lost — and What We Could Still Save

We lost businesses that were part of the fabric of American life.
We lost good jobs, stable careers, pensions, community institutions.

But more than anything, we lost trust.

Trust that the system would reward honest work.
Trust that building something real would be safer than looting something fragile.
Trust that if you played by the rules, you wouldn’t be thrown away when someone else wanted a bigger bonus.

Rebuilding that trust will be harder than passing any single law.

But it’s not impossible.

How We Rebuild

Expose the Heist

Make the system visible.
Call out the looting for what it is — not “bad management,” not “market forces,” but deliberate extraction.

Rein in Predators

Regulate leveraged buyouts.
Ban dividend recapitalizations.
Force real accountability onto private equity owners.

Strengthen Labor

Unions, worker co-ops, and employee ownership aren’t side issues — they’re bulwarks against looters.

Reclaim Public Investment

Stop handing public money to predatory firms through pension funds, subsidies, and tax breaks.
Invest in businesses that invest in people.

Refuse the False Choices

We don’t have to choose between corruption and collapse.
We can demand an economy — and a government — that rewards building, not looting.

The heist isn’t over.

But neither is the story.

If enough of us are willing to look clearly at what happened, name the culprits, and fight for something better, we don’t just stop the next heist.

We start rebuilding something that was stolen from us long ago:
an economy, a democracy, and a future worth trusting again.

The Getaway

Who Profited and How We Fight Back

The vaults were emptied.
The alarms stayed silent.
And the thieves walked right out the front door — smiling, shaking hands, cashing their bonuses.

That’s the real genius of the private equity heist.

It wasn’t just that they stole from America’s businesses, workers, and communities.
It’s that they convinced everyone else to clean up the mess they left behind.

The System That Made It Possible

It wasn’t just one firm.
Or one CEO.
Or one unlucky company.

The entire financial system was rigged to make the heist possible — and to reward the looters.

Private Equity Firms

They operate within a system that incentivizes extraction over investment — because stripping assets and maximizing short-term profits delivers faster, bigger returns than building sustainable businesses.

Wall Street Banks

They package, finance, and profit from the debt that makes these buyouts possible — collecting their fees up front, no matter how many companies collapse later.

Politicians and Regulators

Decades of deregulation, tax breaks, and weak oversight have created a playground where financial engineers can do legally what used to require fraud.

Institutional Investors

Pension funds, university endowments, and wealth managers pour billions into private equity funds, chasing returns — even when those returns come from hollowing out the real economy.

In this system, it doesn’t matter if a company succeeds.
It doesn’t matter if workers are laid off, if towns are gutted, if entire industries are destroyed.
What matters is that the people at the top get paid first.

The Victims Are Always the Same

• Workers, stripped of jobs, pensions, and dignity.

• Communities, hollowed out and abandoned.

• Customers, left with fewer choices and worse service.

• Taxpayers, forced to clean up the wreckage.

This isn’t a story of individual bad actors.
It’s a story of a system that rewards looting — and punishes anyone who tries to build something lasting.

The Grift Continues

Today, in False Promises, we explored The Debt Delusion — how political leaders sell the fantasy that debt can be made to disappear without consequences.

Private equity runs on the same delusion.

The debt they create isn’t designed to be paid off.
It’s designed to be someone else’s problem.

They front-load the profits, dump the risks, and walk away before the roof caves in.

When the collapse comes, it’s always the workers, the communities, and the taxpayers who are left trying to patch the holes — while the looters move on to their next “investment opportunity.”

This isn’t bad luck.
It’s not incompetence.
It’s a business model.
It’s the model.

Fighting Back

The good news is: the heist isn’t inevitable.
And the thieves aren’t invincible.

Some ways to fight back:

• Regulate leveraged buyouts — limit the amount of debt that can be loaded onto a company.

• Ban dividend recapitalizations — prevent owners from extracting cash through forced debt.

• Hold PE firms accountable — make them liable for the debts and pensions they destroy.

• Support worker ownership models — help employees, not financiers, buy and run companies.

• Divest public pension funds — pressure state and city pensions to pull their investments out of predatory PE firms.

• Shine a spotlight — make sure every community knows the real story behind every store closure, hospital bankruptcy, or mass layoff.

This isn’t about “saving capitalism” or “hating capitalism.”

It’s about saving the parts that serve people — and smashing the parts that serve only parasites.

---

Coming up tomorrow:

Final Reflection: Two Crises, One Cause — and How We Rebuild.

(Because private equity’s heist and America’s political collapse aren’t separate stories. They’re chapters in the same book — and it’s time we started writing a different ending.)

Debt Bombs

The Dirty Secret Behind Every Deal

If there’s one thing every great heist needs, it’s a way to destroy the evidence.

Private equity has one:
Debt.

Debt is the smoke bomb they throw as they loot the building.
The fire they set to cover their escape.

And for decades, it’s been their most powerful, least understood weapon.

The Debt Trap

Every private equity buyout starts the same way:
Not with investment.
Not with innovation.
Not with a real plan to grow the business.

It starts with a mountain of debt — debt that is immediately loaded onto the company itself, not the buyer.

It’s called a leveraged buyout (LBO).
But what it really means is this:
The company is forced to mortgage its future just to survive the takeover.

Millions, sometimes billions, in new liabilities — overnight.

The business may have been profitable before.
It may have had cash reserves, a solid workforce, strong relationships with customers.

None of that matters now.

Everything the company earns must go to paying off the debt first — before it can afford to innovate, grow, or even maintain basic operations.

And when the debt load becomes unsustainable?
The company, not the private equity owners, takes the fall.

Why Debt Is So Powerful for Wall Street

Risk is Pushed Down the Chain

The private equity firm collects management fees and special dividends almost immediately.
If the company collapses under its debt later, the firm has already been paid.

Accountability Is Dodged

When a Toys R Us or a hospital collapses, the executives blame “changing markets” or “economic headwinds” — not the crippling debt they were saddled with at gunpoint.

Profits Are Extracted Early

Private equity doesn’t wait for real success.
They extract “value” upfront, cashing in through dividends, asset sales, and rent-seeking while the company is still functioning.

Failure Becomes Someone Else’s Problem

When bankruptcy inevitably comes, it’s the workers, suppliers, and communities who suffer the fallout — pensions lost, stores closed, services eliminated.

Private equity walks away clean.

The Bigger Pattern

By 2023, more than one-third of all U.S. bankruptcies involved companies that had been owned or controlled by private equity firms.

Industries affected include:

• Retail (Toys R Us, Payless Shoes, RadioShack)

• Healthcare (Hahnemann Hospital, Prospect Medical)

• Media (Deadspin, The Denver Post)

• Manufacturing (Remington Arms, Simmons Bedding)

In every case, the pattern is the same:

1. Debt was used to finance the buyout.

2. Profits were extracted early.

3. The company collapsed under the weight.

This isn’t bad luck.
It’s not bad management.
It’s the business model.

Debt is the getaway car.

And every time it crashes into a wall, it’s the workers and communities left bleeding on the pavement.

---

Today, in False Promises, we explored The High Price of Pollution — how corporations dump their waste into the environment to protect their profits, leaving the public to pay the price.

Private equity operates the same way.

• They pollute the balance sheet.

• They strip the assets.

• They profit from the destruction.

• And they leave the cleanup — the bankruptcies, the layoffs, the broken communities — to someone else.

It’s not just about money.
It’s about making sure someone else pays for your mess.

---

Coming up tomorrow:

The Getaway: Who Profited — and How We Fight Back.

(Because the heist isn’t inevitable — and the thieves aren’t untouchable.)

The Silent Kill

How Wall Street Gutted American Healthcare

It didn’t start with a bang.
It started with a bankruptcy filing, quietly buried in the business section.

A hospital here.
A hospital there.

Another rural clinic shutting down.
Another wave of layoffs in critical care units.

It looked random.
It looked unfortunate.

It wasn’t.

It was part of the same heist — just playing out in a place where the victims aren’t just laid off.
They’re left to die.

The Buyouts

In the late 2000s and early 2010s, private equity firms realized hospitals could be gold mines.

Healthcare was a $4 trillion industry.
It was fragmented.
It was complex.
And it was shielded by layers of government funding.

Perfect conditions for exploitation.

Firms like Cerberus Capital Management, Apollo Global Management, and others swept in, buying up hospitals, nursing homes, emergency room chains, and outpatient clinics.

The pitch was always the same:
“Streamline operations.”
“Cut waste.”
“Deliver better, faster care.”

What actually happened was different.

The Playbook Applied to Healthcare

Step 1: Load the Hospital with Debt

Just like Toys R Us, just like JoAnn Fabrics, hospitals were saddled with massive debt the moment private equity took over.

Profits didn’t go into improving patient care.
They went into paying off loans — and into management fees for the new owners.

Step 2: Cut Staff, Cut Services

Nurses were laid off.
Maintenance crews were slashed.
Support staff were thinned out.
Entire specialty departments — like neonatal units, psychiatric services, and oncology wings — were shut down if they weren’t profitable enough.

Quality of care declined.
Wait times ballooned.
Errors increased.

Step 3: Strip the Assets

If a hospital owned valuable real estate, it was sold — often to landlords who raised rents, draining the hospital further.

If a hospital owned its own ambulance fleet, it was sold and leased back at a premium.

Everything that wasn’t nailed down — and even some things that were — was monetized.

Step 4: Exit Before the Collapse

Once the hospital was hollowed out, the private equity owners either flipped it to another buyer or let it spiral into bankruptcy.

Patients and workers were left holding the bag.
Communities were left without critical care.
Lives were lost.

The Human Cost

In Philadelphia, Hahnemann University Hospital — a 171-year-old institution serving primarily low-income patients — was bought by a private equity-backed developer.

Within a few years, it was shut down.
Hundreds of doctors, nurses, and staff were fired.
Thousands of vulnerable patients lost access to care.

The real goal was never to run a hospital.
It was to flip the valuable real estate it sat on — turning a safety net into luxury condos.

This wasn’t an isolated story.
It has happened in New York.
In California.
In rural towns across the South and Midwest.

Everywhere private equity moves into healthcare, the results are the same:

• Fewer hospitals.

• Higher costs.

• Worse outcomes.

---

Today, in False Promises, we explored The Cost of “Small Government” — how deregulation and privatization, sold as efficiency, opened the door to unchecked looting.

Healthcare shows that cost most brutally.

Private equity didn’t just loot toy stores and craft shops.
They came for the hospitals.
They cashed out.
And they left blood on the floor.

---

Coming up tomorrow:

Debt Bombs: The Dirty Secret Behind Every Deal.

(Because debt isn’t just a tool in the heist — it’s the fuse they light before they walk away.)

Collateral Damage

JoAnn Fabrics and the Death of Main Street

It didn’t happen all at once.

There was no sudden bankruptcy.
No headlines screaming the company was dead.

Instead, JoAnn Fabrics — a beloved American retailer, a gathering place for crafters, quilters, teachers, and entrepreneurs — has been slowly hollowed out, store by store, job by job, community by community.

Not by Amazon.
Not by changing tastes.

But by the same quiet financial looters who killed Toys R Us.

The Buyout

In 2011, JoAnn Fabrics was acquired by a private equity firm called Leonard Green & Partners for about $1.6 billion.

The story was familiar:

• JoAnn was profitable.

• JoAnn had strong community ties.

• JoAnn had survived economic downturns, competition, and change.

But after the buyout, everything changed.

Leonard Green loaded JoAnn with debt — hundreds of millions of dollars — and began siphoning off cash through management fees and special dividends.

Rather than investing in modernization, technology, or expanding into new markets, the focus was on extraction.

Stores started to feel neglected.
Staff levels dropped.
Inventory quality declined.

And loyal customers noticed.

The Slow Decline

JoAnn Fabrics didn’t crash overnight like Toys R Us.

Instead, it began to rot from within:

• Store locations became threadbare and poorly maintained.

• Supply chains weakened, leading to frequent stockouts.

• Skilled, full-time employees were replaced by underpaid part-timers.

• Customer service, once a hallmark of the brand, deteriorated.

Even as the company stumbled, private equity owners paid themselves well.
Leonard Green collected fees year after year — no matter how badly the business performed.

Meanwhile, JoAnn’s leadership leaned into gimmicks:

• Cheap loyalty programs.

• Low-wage hiring pushes.

• Desperate promotions to drive foot traffic.

None of it addressed the real disease: a company crushed by debt, bled by fees, and left too weak to adapt.

In 2021, JoAnn was pushed into going public again — not because it was ready, but because Leonard Green wanted an exit.

The burden of debt and decay was dumped back onto public shareholders.
The private equity firm cashed out.

The Impact on Communities

JoAnn Fabrics wasn’t just a retailer.
It was a piece of Main Street life — a place where kids picked up their first school project supplies, where small business owners sourced materials, where elderly hobbyists kept lifelong skills alive.

Its slow collapse mirrors the quiet devastation happening in countless towns across America:

• Empty strip malls.

• Fewer good part-time jobs.

• Communities losing another small anchor that made local life vibrant.

It’s not just about profits.
It’s about belonging.
And when Main Street dies, something inside the town dies with it.

---

Today, in False Promises, we explored The Authoritarian Playbook — how broken economies create broken societies, where fear, anger, and hopelessness can be weaponized.

The slow, quiet collapse of places like JoAnn Fabrics is part of that story.

When jobs dry up, when businesses fail, when trust in local institutions withers — people look for someone to blame.

And authoritarians are always ready with an answer:
Blame the immigrants.
Blame the unions.
Blame the poor.

Never blame the billionaires who gutted your town and got rich doing it.

---

Coming up tomorrow:

The Silent Kill: How Wall Street Gutted American Healthcare.

(Because the heist didn’t stop with toy stores and craft shops — it moved into hospitals, where the cost of looting is measured in lives.)

The First Big Score

Killing Toys R Us for Profit

It should have been a comeback story.

In 2005, Toys R Us was still a titan:

• A household name.

• Profitable.

• Beloved by generations of American families.

Sure, online shopping was starting to grow, and Walmart and Target were squeezing margins.
But Toys R Us had something they didn’t: a brand synonymous with childhood itself.

There was no fatal flaw in the business model.
No inevitable Amazon-driven doom.

The company was still standing — battered, maybe, but alive.

And that’s when the wolves closed in.

The Buyout

In 2005, a trio of private equity giants — Bain Capital, KKR, and Vornado Realty Trust — swooped in with an offer:
Take Toys R Us private.
“Streamline” operations.
“Modernize” the business.
Make it more “nimble” and “competitive.”

It sounded like a lifeline.
Instead, it was the beginning of the end.

The new owners loaded Toys R Us with $5 billion in debt — debt the company never asked for, never needed, and could never escape.

Most of the company’s profits — hundreds of millions of dollars a year — didn’t go toward modernizing stores or competing online.
They went toward servicing the crushing interest payments on the buyout debt.

Toys R Us wasn’t failing.
It was being bled dry.

The Squeeze

By 2007, Toys R Us was spending more than half a billion dollars a year just paying interest on its debts.

Meanwhile:

• Store shelves stayed outdated.

• E-commerce investments lagged.

• Staff cuts eroded customer service.

• Suppliers were pushed to offer harsher terms just to stay stocked.

It was a death spiral — not because customers abandoned Toys R Us, but because private equity stripped away its ability to fight back.

And all the while, Bain, KKR, and Vornado collected millions in “management fees” — profiting off the very company they were dragging toward the grave.

The Collapse

In 2017, Toys R Us finally filed for bankruptcy.

Not because people stopped loving toys.
Not because e-commerce made brick-and-mortar retail impossible.
But because private equity had loaded the company with a financial bomb, and there was no way to defuse it.

When Toys R Us collapsed:

• More than 30,000 workers lost their jobs.

• Thousands of suppliers and small businesses took devastating hits.

• Communities lost vital anchor stores — hastening the decline of shopping centers across the country.

Executives walked away with bonuses.
Private equity firms walked away with profits.

The workers walked away with nothing.

---

Today, in False Promises, we explored The Labor Shortage They Created — how short-sighted policies, attacks on workers, and deliberate neglect of the real economy hollowed out America’s workforce.

The collapse of Toys R Us is a perfect, brutal example.

• Good jobs destroyed.

• Communities abandoned.

• A whole generation of workers and consumers betrayed — not by technology, not by globalization, but by greed weaponized through finance.

This wasn’t creative destruction.
It wasn’t inevitable.

It was a hit job.
And Toys R Us was just the first score.

---

Coming up tomorrow:

Collateral Damage: JoAnn Fabrics and the Death of Main Street.

(Because sometimes the heist doesn’t make headlines — it just quietly kills your town’s last good store.)

The Playbook

How to Gut a Company and Get Away With It

There’s no smash-and-grab.
No gunmen in ski masks.
No vaults blown open at midnight.

The private equity heist is quieter.
More technical.
More devastating.

And it starts with a move so clever, so simple, most people never even notice it’s happening.

You buy a company — not with your own money — but with the company’s.

It’s called a leveraged buyout, but it might as well be called what it is: a hostage situation.

The private equity firm promises new investment, new growth, new prosperity.
In reality, they’re tying the company to a ticking debt bomb — and lighting the fuse.

Once the ink is dry, the “new owners” owe almost nothing.
The company owes everything.

And that’s just the beginning.

Here’s how the playbook works — step-by-step:

Step 1: Load Up the Debt

The first rule of the heist: always use someone else’s money.

The private equity firm buries the company under staggering debt — sometimes several times its actual value — using its own buildings, land, equipment, even intellectual property as collateral.
It’s like taking out a second mortgage on a house you already own… and handing the deed to someone else.

Suddenly, a stable, profitable business is forced into survival mode.
Debt service becomes the priority.
Growth, innovation, long-term planning — all of it is put on hold.
The company isn’t working for customers or communities anymore.
It’s working for the bankers.

Step 2: Slash and Burn

Debt pressure is a feature, not a bug.

• Stores close.

• Workers are laid off.

• Pay freezes, benefits disappear, pensions evaporate.

• Maintenance and modernization are deferred indefinitely.

Anything that costs money — anything that supports workers, customers, or communities — is slashed in the name of “efficiency.”

And if the company owns valuable assets, like real estate?
Those are sold off too — often in sweetheart deals that benefit the private equity firm or its allies.

What’s left is a stripped-down shell, more fragile with each passing quarter.

Step 3: Milk the Host

Before the company stumbles, the private equity firm moves in to collect its winnings.

They pay themselves “management fees” for consulting services.
They pay themselves “advisory fees” for overseeing the damage.
They sometimes even force the company to take on even more debt to issue “special dividends” directly into the pockets of investors.

It’s the business equivalent of taking out a payday loan — not to keep the lights on, but to throw a party for the landlord.

And if the company starts slipping toward bankruptcy?
Doesn’t matter.
The private equity firm has already been paid.

Step 4: Sell It, Burn It, or Let It Die

Once the host is drained — once the debt burden becomes unsustainable — the final phase begins.

Maybe they flip the company to another buyer, spinning the story of “turnaround potential.”
Maybe they take it public, dumping shares on unsuspecting investors.
Maybe they simply walk away, letting the company collapse into bankruptcy court, taking workers’ pensions and unpaid suppliers with it.

In every scenario, the private equity firm gets away with the loot.

The workers?
Out of jobs.

The retirees?
Out of pensions.

The communities?
Left with empty malls, abandoned factories, and broken promises.

---

Today, in False Promises, we examined the False Promise of Tariffs — how broad, poorly targeted tariffs are raising costs for American businesses without delivering real local benefit. Instead of protecting workers or rebuilding industry, they’re making it harder for companies to survive — while doing nothing to address the underlying rot.

Private equity runs the same kind of scam.

They promise to rescue companies.
In reality, they load them down with debt, strip them of assets, and leave them weaker than before — all while walking away richer.

In both cases, the price is paid by the very people the promises were supposed to help.

---

Coming up tomorrow:

The First Big Score: Killing Toys R Us for Profit.

(The inside story of how Wall Street took down a beloved American brand — and why no one ever paid the price.)

The Setup

How Wall Street Plotted the Perfect Crime

No alarms were triggered. No headlines screamed.
There was no raid, no getaway car, no televised trial.
But across America, a silent heist was already underway.

The clues were scattered in plain sight:

• Shuttered toy stores.

• Empty shopping plazas.

• Small-town hospitals closing their doors.

• Workers showing up one morning to find their jobs — and pensions — gone.

At first, it was easy to explain away.
“That’s just the market,” they said.
“Amazon is killing retail,” they shrugged.
“Healthcare is complicated.”

But beneath the surface, something more deliberate was unfolding.
A new kind of predator had emerged — one that didn’t need to invent, build, or serve.
Private equity firms had found a way to hijack the real economy, stripping value from companies, communities, and workers without ever facing consequences.

They would buy healthy businesses, saddle them with crushing debt, extract every ounce of cash they could, and abandon the wreckage — often while walking away with fortunes.

It was the perfect crime.
Legal. Invisible. Systematic.
And it would quietly help unravel the economic foundations that millions of Americans had spent generations building.

---

Today, in False Promises, we began with Unraveling Pax Americana — tracing how short-term thinking, corruption, and political cowardice are actively weakening America’s standing in the world.

The heist unfolding inside corporate America mirrors this collapse.

While Washington is chasing quick wins and easy slogans, private equity firms are dismantling the companies that once formed the backbone of American life:

• The local retailers that anchored neighborhoods.

• The hospitals that kept rural America alive.

• The manufacturers that provided stable, middle-class jobs.

These businesses weren’t collapsing under the weight of global competition or innovation.

They were deliberately targeted — stripped for cash, loaded with debt, and left to fail.

Because when trust crumbles and grifters run the show, the only thing left to do is loot the place before the lights go out.

In this series, we’ll trace the blueprint of the heist:

• The tools they used.

• The targets they chose.

• The victims they left behind.

Because America didn’t lose Toys R Us, JoAnn Fabrics, your local hospitals, or hundreds of other businesses by accident.

They were sold for parts.
And the getaway is still happening.

---

Coming up tomorrow:

The Playbook: How to Gut a Company and Get Away With It.

(Once you see how it works, you’ll never look at a “buyout” the same way again.)