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Read this The Buyout of America
How Private Equity Will CauseThe Next Great Credit Crisis By Josh KosmanPortfolio, $26.95If President Barack Obama is elected to a second term, he is likely to have to weather another great financial storm, financial journalist Josh Kosman suggests. That crisis, which could be as bad or worse than the one Obama inherited in 2009 at the beginning of his first term, will be brought on by the bankruptcies of thousands of companies bought by private equity firms like Kohlberg Kravis Roberts, Carlyle Group and Blackstone Group between 2001 and 2007, Kosman writes. He has spent several years researching how private equity companies operate while reporting and writing for private equity publications. He explains how those firms acquire troubled companies, then force them to take out large loans, which they pay off by cutting staff and other Draconian means. Many of those companies default on the loans. Some private equity firms, Kosman points out, are trying to profit from the current credit crisis by buying distressed assets in the United States and Europe. Millions of jobs could be lost starting in 2012, when the balloon payments on the loans taken out by private equity-owned companies come due and cannot be repaid, Kosman said.— Cecil Johnson, Special to the Star-Telegram
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