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The Same Private Equity Playbook, One Industry After Another

This entry is part 21 of 20 in the series Political Writing
TL;DR: I never set out to write about the decline of American business. After twenty years managing technology at Trader Joe’s and a decade listening to executives tell me their real stories, I kept seeing the same private equity playbook destroying one industry after another. I am tired of pretending that widespread business degradation is just how markets work.

I never set out to write a book about the decline of American business. I was perfectly happy ghostwriting memoirs and helping executives tell their success stories.

But after twenty years managing technology at Trader Joe’s and then a decade listening to business leaders share their real stories, I started noticing patterns that kept me awake at night.

The same private equity playbook destroying one industry after another. The same optimisation algorithms that could improve customer service getting repurposed to extract from it. The same executives who built great businesses explaining how they were pressured to dismantle what made those businesses great.

What does the pattern look like from inside?

Ordinary, which is what makes it difficult to argue with while it is happening.

Nobody in these rooms describes themselves as degrading a business. They describe a margin target, a cost line that has grown, a service level that is above what the market requires. Each decision is defensible on its own terms and most of them are individually correct.

What accumulates is a company that is worse at the thing it exists to do, arrived at by a series of decisions where nobody chose that outcome.

I watched companies I had shopped at my whole life turn into hollow shells of themselves. Airlines that once made flying feel special now treat passengers like cattle. Department stores that anchored communities became something else.

Is that just nostalgia?

It is a fair challenge and the answer is that the changes are measurable.

Everybody thinks things were better when they were younger and most of the time everybody is wrong. So the test has to be specific instead of atmospheric. Seat pitch. Fee structures. Staffing per store. Product lifespan. Time to reach a human being.

Those are numbers instead of feelings, and where I could find them they moved in one direction. That does not make every memory accurate. It does mean the general impression is tracking something real.

Why do the executives go along with it?

Because the pressure is structural, and I say that having listened to a lot of them describe it.

The people telling me these stories were not villains. They were people who had built something they were proud of, explaining how they were pressured to take it apart, usually with some regret and usually with a clear account of what the alternative would have cost them personally.

An executive who refuses is replaced by one who does not. That is not an excuse and it is an accurate description of the mechanism. Blaming people is emotionally satisfying and analytically useless, because the same structure produces the same result with different people in the chairs.

Is this just how markets work?

No, and that phrase is doing an enormous amount of concealing.

I wrote this book because I’m tired of pretending that widespread business degradation is just how markets work. It’s not. It’s how these particular markets work, structured by these particular incentives.

The proof is that the exceptions exist. There are companies that have not done this, and they are not outliers or lucky accidents. They are companies that made different choices about ownership, about optimisation, and about what success means.

If the outcome were a law of markets, there would be no exceptions. There are, which means it is a choice, which means somebody chose.

Why does the technology part matter?

Because I spent twenty years on that side of it and watched the same tools go both ways.

The optimisation algorithms that could improve customer service are the same ones that get repurposed to extract from it. It is genuinely the same technology. What differs is the objective it is pointed at, and that objective is set by people who are usually several layers away from anybody who will experience the result.

That is the part I could not have written without the technical background, and it is why the book is not simply an economics argument.

The book on this: The Enshittification of America is the pattern traced across industry after industry, from twenty years inside a large company and a decade listening to executives describe what they were pressured to dismantle.

What is the argument?

The degradation is a pattern, not a mood. It repeats across industries with the same steps.

It is produced by incentives instead of by villains. Which is worse, because incentives do not change their minds.

The exceptions prove it is a choice. Different ownership structures produce different behavior.

The same tools can do either. The technology is neutral and the objective function is not.

Saying it is just how markets work is a way of ending the conversation. It is not an explanation, it is a refusal to give one.

I would have been content to keep writing memoirs. What changed is that I heard the same story often enough, from people who had been in the room, that not writing it down started to feel like a choice of its own.

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Frequently Asked Questions

What is the playbook?
Acquire, load with debt, cut the things customers cannot see immediately, extract fees, and exit before the damage shows in the numbers. It is repeatable, it is legal, and it works reliably enough to be applied to one industry after another.
Is this just how markets work?
No, and that phrase is doing a lot of concealing. It is how these particular markets work, structured by these particular incentives. Different ownership structures produce different behavior, which is the evidence that the outcome is a choice.
Why do executives go along with it?
Because the pressure is structural and their alternatives are limited. The ones I have listened to were not villains. They were people explaining how they were pressured to dismantle what had made their businesses good, and describing it with some regret.
Which companies avoid it?
The ones that made different choices about ownership, about what to optimise, and about what success means. They are not outliers or lucky accidents, which matters, because it shows the pattern is not inevitable.
Why does it feel like everything is getting worse?
Because in a lot of specific, measurable ways the things you buy and the services you use are worse than they were, and you are not imagining it. The airlines, the department stores, the products that used to last are the evidence.

📁︎ Behind the Book📁︎ Business📁︎ Business Strategy📁︎ Politics

🏷︎ Business🏷︎ Economics🏷︎ Private Equity

📝 Disclaimer

The views and opinions expressed in this blog post are solely those of Richard Lowe and are based on personal experience and research. This content is for informational purposes only and should not be construed as professional legal, financial, accounting, or business advice. Always consult with qualified professionals before making important business or legal decisions. Richard Lowe is not a lawyer, accountant, or licensed professional advisor, and this content does not establish any professional relationship.

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