Predatory Capitalism : Private Equity

#economics #politics #greed #murder

Private equity is destroying US infrastructure to make a quick buck. It's happening in almost every sector of the economy you can imagine. I'm not exaggerating when I say that PE firms are buying up nursing homes, transfering ownership of the land and building off into a separate entity, and have that entity charge the nursing home rent which keeps going up and up. This forces management of the nursing home to find ways to cut expenses until there's nothing left to cut except stuff directly related to resident care, safety, etc. Families see the writing on the wall and move their relatives out which accelerates the demise of the nursing home and it has to shut down (or is shut down, by the county/state.) Then the PE firm bulldozes the building and sells the property (which is what they really wanted.)

The US suffered a massive toxic fire in Ohio that destroyed a big chunk of the town and left a huge area heavily poisoned because a private equity firm bought the railroad and was squeezing it for every penny, and despite plenty of warnings by union officials and experts, the FRA did nothing and then...boom. Wheel bearing seized, train derailed, town polluted by hundreds of thousands of pounds of incredibly toxic chemicals like vinyl chloride.

https://www.tiktok.com/@moreperfectunion/video/7198354503823...

Precision railroad scheduling means:

• insanely strict rules about when engineers can request time off even for family medical emergencies, and sick days (so you have train engineers and other staff working while sick as dogs. Totally safe! Really stressed out employees, too - and stress means mistakes.) RR unions tried to strike twice. First congress and then and Biden bitch-slapped them back to work with a "compromise" that was still oppressive as hell because the economic disruption from the trains not running was more important. All because the railroads want to cut the number of employees down as low as possible so there aren't available engineers to replace sick ones, and they don't want delays while replacement engineers head out to trains that had to be left somewhere because the engineer was sick.

• dramatically reducing the time rolling stock maintenance crews have to inspect a car for problems - from three minutes to a minute and a half. Not only does this save labor, it means those maintenance crews don't find as much stuff wrong which takes a car out of service and costs money for the repair...woo, saving more money!

• reducing the number of employees per train; I believe it's currently two, and they're trying to push the FRA into allowing them to run one employee per train.

• increasing train lengths to reduce labor costs by moving more cars per people they have to pay. This increases the chances of derailments, and also causes other problems, like slower brake response time (the longer the train, the longer it takes for a pressure reduction in the brake line to make it to the end of the train, though I believe some end-of-train devices can be set up to remotely release brake pressure.)

• reducing track crews and time allocated to track maintenance so the tracks are more available and maintenance costs are lowered.

Keep in mind locomotive engineers are paid a median wage of $35/hour with a 10/90th percentile spread of $28/$44. These aren't enormous sums of money they're saving by going to one person on the train, particularly since it will be a lower-paid employee who is removed.

The crash was caused by overheating bearings which caused a wheelset to seize and derail the train.

It gets worse. The railroad pushed to have tanker cars intentionally burned, lied to the public, and turns out it was likely just because burning off the chemicals was cheaper and faster than a proper cleanup. Sources: https://www.tiktok.com/@moreperfectunion/video/7247656170347... and https://en.wikipedia.org/wiki/East_Palestine,_Ohio,_train_de...

Hilariously, the EPA, the railway, and "independent scientists" all declared the area safe but EPA employees visiting the sites became sick in ways similar to how residents were being affected.

The railroad companies responded to public and congressional furor by saying they'd self-regulate (!) better, and join a program similar to the FAA's close-call incident reporting system. Only one railroad has joined that system, and all but one raiload saw an increase in derailments in the following year.

The PE firms know their maintenance and staffing cuts are causing increasing problems and will destroy the railroad companies. They don't care. They're milking the railroad companies for every dime they can squeeze, leaving them in tatters from all the deferred maintenance and repairs. These companies are responsible for moving massive amounts of cargo around the country, and when they fall apart, it will be a national crisis, and the federal government will have to step in and bail the companies out because they're 'Too Big To Fail.' And the PE firms that own trucking companies will see record profits...