Originally published at: https://pluralistic.net/2023/10/05/mr-gotcha/
- Union pensions are funding private equity attacks on workers: When your pension fund comes for your job, your home, and your funeral.
- Hey look at this: Delights to delectate.
- This day in history: 2013, 2018
- Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading
Union pensions are funding private equity attacks on workers (permalink)
If end-stage capitalism has a motto, it's this: "Stop hitting yourself." The great failure of "voting with your wallet" is that you're casting ballots in a one party system (The Capitalism Party), and the people with the thickest wallets get the most votes.
During the Cultural Revolution, the Chinese state would bill the families of executed dissidents for the ammunition used to execute their loved ones:
In end-stage capitalism, the dollars we spend to feed ourselves are used to capture the food supply and corrupt our political process:
And the dollars we save for retirement are flushed into the stock market casino, a game that is rigged against us, where we are always the suckers at the table:
Everywhere and always, we are financing our own destruction. It's quite a Mr Gotcha moment:
Now, anything that can't go on forever will eventually stop. We are living through a broad, multi-front counter-revolution to Reaganomics and neoliberal Democratic Party sellouts. The FTC and DOJ Antitrust Division are dragging Big Tech and Big Meat and Big Publishing into court. We're seeing bans on noncompete clauses, and high-profile government enforcers are publicly pledging never to work for corporate law-firms when they quit public service:
And of course, there's the reinvigoration of the labor movement! Hot Labor Summer is now Perpetual Labor September, with 75,000 Kaiser workers walking out alongside the UAW, SAG-AFTRA and 2,350 other groups of workers picketing, striking or protesting:
But capitalism still gets a lick in. Union pension plans are some of the most important investors in private equity funds. Your union pension dollars are probably funding the union-busting, child-labor-employing, civilization-destroying Gordon Gecko LARPers who are also evicting you from the rental they bought and turned into a slum, and will then murder you in a hospice that they bought and turned into a slaughterhouse:
Writing for The American Prospect, Rachel Phua rounds up the past, present and future of union pension funds backing private equity monsters:
Private equity and hedge funds have destroyed 1.3 million US jobs:
They buy companies and then illegally staff them with children:
They lobby against the minimum wage:
They illegally retaliate against workers seeking to unionize their jobsite:
And they couldn't do it without union pension funds. Public service union pensions have invested $650 million with PE funds. In 2001, the share of public union pensions invested in PE was 3.5%; today, it's 13%:
Giant public union funds like CalPERS are planning massive increases in their contributions to PE:
This results in some ghastly and ironic situations. Aramark used funds from a custodian's union to bid against that union's members for contracts, in an attempt to break the union and force the workers to take a paycut to $11/hour:
Blackstone's investors include the California State Teachers Retirement System (CalSTRS). The PE ghouls who sucked Toys R Us dry were funded by Texas teachers.
Then there's KKR, one of the most rapacious predators of the PE world. Half of the investors in KKR's Global Infrastructure Investors IV fund are public sector pension funds. Those workers' money were spent to buy up Refresco (Arizona Iced Tea, Tropicana juices, etc), a transaction that immediately precipitated a huge spike in on-the-job accidents as KKR cut safety and increased tempo:
Petsmart is the poster-child for PE predation. The company uses TRAPs ("TrainingRepaymentAgreementProvision") clauses to recreate indentured servitude, forcing workers to pay thousands of dollars to quit their jobs:
Why would a Petsmart employee want to quit? Petsmart's PE owner is BC Partners, and under BC's management, workers have been forced to work impossible hours while overseeing cruel animal abuse, including starving sick animals to death rather than euthanizing them, and then being made to sneak them into dumpsters on the way home from work so Petsmart doesn't have to pay for cremation. 24 of BC Partners' backers are public pension funds, including CalSTRS and the NYC Employees' Retirement System:
PE buyouts are immediately followed by layoffs. One in five PE acquisitions goes bankrupt. Unions should not be investing in PE. But the managers of these funds defend the practice, saying they "facilitate dialog" with the PE bosses on workers' behalf.
This isn't total nonsense. Once upon a time, public pension fund managers put pressure on investees to force them to divest from Apartheid South Africa and tobacco companies. Even today, public pensions have successfully applied leverage to get fund managers to drop Russian investments after the invasion of Ukraine. And public pensions pulled out of the private prison sector, tanking the valuation of some of the largest players.
But there's no evidence that this leverage is being applied to pensions' PE billions. It's not like PE is a great deal for these pensions. PE funds don't reliably outperform the market, especially after PE bosses' sky-high fees are clawed back:
Pension funds could match or beat their PE returns by sticking the money in a low-load Vanguard index tracker. What's more, PE is getting worse, pioneering new scams like inflating the value of companies after they buy and strip-mine them, even though there's no reason to think anyone would buy these hollow companies at the price that the PE companies assign to them for bookkeeping purposes:
To inject a little verisimilitude into this obvious fantasy, PE companies sell their portfolio companies to themselves at inflated prices, in a patently fraudulent shell-game:
What's more, PE funds aren't just bad bosses, they're also bad landlords. PE-backed funds have scooped up an appreciable fraction of America's housing stock, transforming good rentals into slums:
PE is really pioneering a literal cradle-to-grave immiseration strategy. First, they gouge you on your kids' birth:
Then, they slash your wages and steal from your paycheck:
Then, they evict you from your home:
And then they murder you as part of a scam they're running on Medicare:
As the labor movement flexes its muscle, it needs to break this connection. Workers should not be paying for the bullet that their bosses put through their skulls.
Hey look at this (permalink)
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This day in history (permalink)
#10yrsago Prison Profiteers: extracting billions by exploiting prisoners and their families https://www.thenation.com/article/archive/prison-profiteers/
#10yrsago Silk Road prosecution: how does the US criminal justice system actually work? https://www.popehat.com/2013/10/02/the-silk-road-to-federal-prosecution-the-charges-against-ross-ulbricht/
#5yrsago Now in print: William S Burroughs’ lost guide to overthrowing a corrupt government https://ohiostatepress.org/books/titles/9780814254899.html#tabs-4
#5yrsago US governmental requests for comment are routinely flooded by pro-corporate bots https://www.techdirt.com/2018/10/05/fake-comments-are-plaguing-government-agencies-nobody-much-seems-to-care/
#5yrsago Some important technical (and skeptical) notes about the Chinese-backdoored-servers story https://memex.craphound.com/2018/10/05/some-important-technical-and-skeptical-notes-about-the-chinese-backdoored-servers-story/
#5yrsago Congrats to this year’s MacArthur “geniuses,” including the amazing Kelly Link! https://www.macfound.org/fellows/class-of-2018/kelly-link#searchresults
Today's top sources:
- A Little Brother short story about DIY insulin PLANNING
Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. FORTHCOMING TOR BOOKS JAN 2025
The Bezzle, a Martin Hench noir thriller novel about the prison-tech industry. FORTHCOMING TOR BOOKS FEB 2024
Vigilant, Little Brother short story about remote invigilation. FORTHCOMING ON TOR.COM
Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION
Spill, a Little Brother short story about pipeline protests. FORTHCOMING ON TOR.COM
Latest podcast: How To Think About Scraping https://craphound.com/news/2023/09/24/how-to-think-about-scraping/
- Wired Nextfest (Milano), Oct 7-8
The Internet Con at Moon Palace Books (Minneapolis), Oct 15
26th ACM Conference On Computer-Supported Cooperative Work and Social Computing keynote (Minneapolis), Oct 16
41st annual McCreight Lecture in the Humanities (Charleston, WV), Oct 19
Taylor Books (Charleston, WV), Oct 20, 12h-14h
Seizing the Means of Computation (Edinburgh Futures Institute), Oct 25
The Internet Con at the Internet Archive (virtual), Oct 31
- Why the Internet Broke and How to Fix It (Motherboard Cyber)
DIY isn't enough: systematic change (Farm to Taber)
Seize the Means of Computation (Movement Memos)
- "The Internet Con": A nonfiction book about interoperability and Big Tech (Verso) September 2023 (http://seizethemeansofcomputation.org). Signed copies at Book Soup (https://www.booksoup.com/book/9781804291245).
"Red Team Blues": "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books http://redteamblues.com. Signed copies at Dark Delicacies (US): and Forbidden Planet (UK): https://forbiddenplanet.com/385004-red-team-blues-signed-edition-hardcover/.
"Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com
"Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The Washington Post called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html
"How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59 (print edition: https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)
"Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html
"Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.
- The Lost Cause: a post-Green New Deal eco-topian novel about truth and reconciliation with white nationalist militias, Tor Books, November 2023
The Bezzle: a sequel to "Red Team Blues," about prison-tech and other grifts, Tor Books, February 2024
Picks and Shovels: a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books, February 2025
Unauthorized Bread: a graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2025
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