(C) Carol Simpson
From Kendall Wilson (via email): “I think an interesting discussion lies around creative destruction and constantly shifting of companies, technologies and wealth, and unemployment in America. It seems that there could be a gap for law to fill, in order to protect those affected by massive job cuts.”
When I initially read this article, I thought the negative reaction to private equity and its resulting creative destruction is simply something that is always going to be detrimental to one’s political campaign and this should not speak to the business or economic merits of the industry. However, as I think about it more, I believe there needs to be the elimination of the stigma surrounding private equity and creative destruction, specifically. I think that most people in the general public have a negative conception of private equity because they think those involved are being driven by profit and are willing to eliminate any and all blue collar workers’ jobs to achieve the maximum profit. Yet, if you reanalyze the situation and avoid the negative stigma of the private equity industry, you see that through their work of enhancing creative destruction, they are speeding up the inevitable and making the economy more efficient. For those companies that a private equity company buys and eliminates tons of jobs, most likely this was going to happen down the road anyways, otherwise that company wouldn’t have been a target for a takeover. So I think if we shift the conversation of creative destruction and private equity to recognize the inherent benefits of each, then it will lead to more socially productive discussions in the future.