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funds have been free to pursue their rapacious job-killing strategies with abandon.
    Typically, private equity firms borrow money to take over a company. Then they institute cutbacks and other “efficiencies” to groom the company for sale to new investors. When the company is taken public, the private equity firm earns substantial fees and passes on the debt it took on when it bought the company. Often the new company has difficulty managing the heavy debt load and reduces expenses by cutting even more jobs.
    The list of companies whose employees were cast aside after their company was acquired by Blackstone is long and depressing. In what was the largest technology company buyout of its time, Blackstone in 2006 acquired Freescale, the huge maker of semiconductors based in Austin, Texas. Financed largely by debt, the $17.6 billion acquisition was a prelude to a string of job cuts of skilled workers. In 2009, again using borrowed money, Blackstone took over one of America’s most venerable names in processed food, Birds Eye Foods. Blackstone instituted job cuts, axing the corporate staff of Birds Eye in Rochester, New York, and closing a processing plant in Fulton, New York, that had been a fixture of the town for a century.
    To conservatives and free-market zealots, job cuts by private equity companies such as Blackstone and Bain, while causing pain, are absolutely essential and have a positive effect on the economy. Writing in the New York Times in 2012, columnist Ross Douthat argued that the “private equity revolution was necessary” and that “our economy became more efficient” as a result of often brutal restructurings. To Douthat and like-minded thinkers, the “competitiveness revolution,” as he called it, has reinvigorated the economy.
    But has it? It depends on what you mean by the economy.
    There is no hard evidence that all this buying and selling has helped the economic welfare in communities across the country so that money flows from one enterprise to another, supporting other businesses and local services. What is absolutely certain is that the deal-making has been a boon to the bank accounts of Schwarzman and his fellow private equity moguls.
    The managers of the largest equity and hedge funds have become immensely wealthy—many are billionaires—even though some of the companies they bought and sold later foundered. In addition to the rich fees they harvest, private equity fund managers rake in millions more courtesy of U.S. taxpayers. Thanks to Congress, a portion of their annual income is taxed at 15 percent (rather than 35 percent) under an obscure provision called “carried interest.” This puts that income in the same tax bracket occupied by the janitors who clean their buildings. Using the proceeds from their deals and the money they save on taxes, private equity and hedge fund managers have lavish lifestyles featuring multiple residences, private planes, and ostentatious parties.

    THOSE HIGH-PRICED AMERICAN WORKERS
    The ruling class thinks that the average American earns too much money. This is an unspoken belief, and one that most of them would no doubt vehemently deny. But the evidence is compelling. The elite show their hand in many ways:
• When they oppose raising the pay of the lowest-paid workers, those covered by the minimum wage
• When they encourage the export of good-paying jobs in fields such as information technology
• When they resist changes in the tax code that would protect American workers
    Corporate executives contend that they are forced to relocate their operations to low-wage havens to remain competitive. In other words, their domestic workers earn too much. Never mind that manufacturing wages are lower in the United States than in a dozen other developed countries.
    Thanks to the rules, many of which are written by corporations, a company can pull up stakes and use cheap foreign labor to make the same product it once did in America. It no longer has to meet