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How Wall Street is Profiting off of the Crisis It Created

Eight years ago the world changed. The financial crisis kicked off a recession that left deep scars on the U.S. economy, including making it tougher for many cities and counties to pay for basic public goods like infrastructure and emergency services.

In a jarring investigationThe New York Times has exposed how a little known part of Wall Street has benefited from our slow recovery. As public budgets have tightened, investors operating with little transparency or oversight have increasingly taken over many public services Americans rely on every day, like ambulances and even firefighting.

The Times details three ambulance companies that filed for bankruptcy after being acquired by Wall Street private equity firms. Cities like Mt. Vernon, N.Y., and Tacoma, W.A., had contracted with the companies in an effort to save money. The companies cut costs, implemented aggressive billing tactics, and squeezed workers. Paramedics employed by one of the companies had to secretly swipe medical supplies from a hospital because their ambulances were low on critical medications. Another company sent a bill for hundreds of dollars to an infant girl born in one of its ambulances, threatening her with the possibility of a bad credit report.

Government contractors, chasing profit, often cut corners by reducing services and worker pay, and sidestepping protections for the public and the environment. Privatization threatens the quality and accessibility of our public goods, and the good paying, middle class jobs they provide. 

As the Times shows, private equity firms up the ante: “Unlike other for-profit companies, which often have years of experience making a product or offering a service, private equity is primarily skilled in making money.”


Privatization threatens the quality and accessibility of our public goods, and the good paying, middle class jobs they provide.


Private equity firms are complicated and shrouded in secrecy—you may have heard of “shadow banking,” they’re part of that—but one thing’s for sure: their interests, like any government contractor looking to profit, often run counter to the public interest.

 

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