Today's links





Private equity looting public health in a pandemic (permalink)

During a 2007 trip to NYC, while taking long walks from one indie bookstore to the next, lugging increasingly heavy bags of pressed vegetable matter, I stumbled on Simon Lovell's How to Cheat at Everything at the St Mark's Bookshop.

https://www.runningpress.com/titles/simon-lovell/how-to-cheat-at-everything/9781560259732/

Despite the title, its really about about not getting cheated: anatomical dissections of scams that show you how they work. One thing that stuck with me from all that is how to spot a dirty "proposition" bet, a variable-odds bet on a specific outcome from a range of outcomes.

Lovell's rule of thumb is the more complicated a bet is, the scammier it is. If it pays 2:1 for one outcome, 5:1 for another, and 100:1 for a third, it's probably a scam. Complexity confounds your ability to match odds to payouts – to intuit whether it's a good bet.

I remember being at Defcon one year and going into a Vegas casino and asking a craps croupier to explain how the game worked, and as he rattled off the different odds on the different paylines, I was like, Ohhhhh, I get this. This is a scam.

The next time I had that feeling was during the financial crisis, when I started to learn about CDOs and other complex derivatives, and how their originators presented them to investors, using esoteric math to prove they were safe. Ohhh, I thought. Oh, I get it.

The more I learned about finance, the more this insight came back to me. Because so often the complexity was revealed to be an ornament, a form of dazzle there to confuse the eye about the true shape of the transaction.

The rococo equations where set-dressing to support the idea that mere mortals are disqualified from discussing, understanding, or regulating the finance industry. And nowhere is that more in evidence than in the private equity world.

Because the underlying scam is pretty simple, tbh. Borrow money using the company you're acquiring as collateral (that's right: you're using an asset you don't own as collateral to acquire it – like a mortgage, except the transaction is nonconsensual for the "seller").

Sell off the company's assets, especially real-estate holdings, so the company now has to pay rent for its own buildings (this is very popular with PE takeovers of chain restaurants, exposing them to rent-shocks).

Eliminate cost-centers that provide long-term value to the company, but whose absence isn't felt in the short term – like buying up newspapers and firing the local sales staff who know local merchants, consolidating sales to a national office.

(If you think Google and Facebook killed newspapers, you're not wrong, but you're not right either: they'd been consolidated and asset stripped for decades, had their cash reserves, plant and real estate sold off, and were weak and flailing when the internet came along)

Declare a special dividend for the PE owners and their investors, in which the cash you realize from the selloffs disappears into offshore tax-havens, leaving behind a damaged, failing business.

When the company fails, restructure it through bankruptcy. Take special care to zero out obligations to suppliers (the entire US independent toy industry was annihilated by the PE shutdown of Toys R Us) and workers (bye, Sears pensions).

Engage in predatory conduct. Buy doctors' groups that serve hospital emergency rooms and opt them out of all insurance plans. Stick people who show up in ambulances, unconscious or in extremis, with titanic bills. $5k for an icepack? Why not!

Make minimal payments to the creditors who loaned you the money to do the leveraged buyout. Maybe buy the debt from them at pennies on the dollar and start extracting debt payments from the company – predatory behavior can help with this!

Hospitals and newspapers are really great for this, because they're important so they get bailouts. Canada's giant newspaper bailout will direct millions in taxpayer funds to the US vulture capitalists who tanked Postmedia and the National Post.

Hospitals are an amazing storefront for this kind of long-con, especially in a crisis. There are so many ways to cash out. They're like the craps-table of The Pandemic Casino, a moneyspinner for the casino boss.

Like, if you happen to own a beloved low-income hospital that has served poor people in a city with some of the worst poverty in America, you can offer to rent it to the city for $1m/month!

https://pluralistic.net/2020/04/02/eff-livestream-today/#joel-kills

Or if you're a PE company that staffs about half of the country's hospitals (especially their front-line ER docs and nurses), you can slash their pay and benefits and they'll keep showing up for work!

https://pluralistic.net/2020/04/01/pluralistic:-01-apr-2020/#private-equity

Or you can just demand a bailout. Steward is a PE-backed hospital chain whose debt-loaded acquisition of Easton Hospital in Lehigh Valley (PA) left the region's major hospital saddled with so much debt it was already on the brink of collapse.

https://www.counterpunch.org/2020/04/03/hospital-bailouts-begin-for-those-owned-by-private-equity-firms/

It's owned by Cerberus, a giant and notorious PE looter. Cerebus is about to pocket $8m in bailout money approved by PA governor Tom Wolf, who was responding to Steward's threat to shut down the hospital effective Mar 27 if it didn't get a payout.

https://www.lehighvalleylive.com/coronavirus/2020/03/easton-hospital-owner-to-proceed-immediately-on-closure-without-state-takeover-by-midnight.html

The $8m is a downpayment, and there's $24m more to come. It's true that when Cerebus bought Easton Hospital, it was struggling…because it had ALREADY been debt-loaded by another PE looter, Forstmann Little & Co.

And while Cerebus's investors have made huge profits from the transaction, the Steward hospitals are the worst-performing in PA, with $592m in losses in 2017/8.

http://www.chiamass.gov/assets/Uploads/mass-hospital-financials/2018-annual-report/Acute-Hospital-Health-System-Financial-Performance-Report-FY2018.pdf

When PE companies acquire doctors' groups, they argue that they're merely investing in the front-line caregivers, and that these are still owned and representative of those doctors who save our lives. But that's a lie.

Dr Ming Lin is a 17-year ER veteran who was just fired from Bellingham, WA's Peacehealth St. Joseph Medical Center after going public about the lack of PPE and the unsafe conditions for caregivers and patients at his hospital.

The company that fired him is Teamhealth, owned by Blackstone. the largest PE company in the world. Teamhealth says that the doctor's practices it owns are actually run by doctors, but has refused to publish the operating agreements it has with those docs.

Docs like Ming Lin. If you believe Teamhealth practices are run by docs, then you have to believe that Ming Lin fired himself. Otherwise, Blackstone fired him.

https://www.nakedcapitalism.com/2020/04/what-wall-street-doesnt-want-you-to-know-about-hospital-emergency

Blackstone has ordered ALL of its docs to be silent on lack of PPE, on pain of immediate dismissal. Its CEO, Stephen Schwarzman, is a Trump insider, and the order protects Trump from negative news stories that reveal his complicity in the negligent homicide of Americans.

Private equity is a scam. The math that shows that it's providing value – as opposed to helping socially useless parasites loot real businesses that provide real value – is a window-dressing, like fraudulent bond ratings that were used to sell CDOs.

(Image: Lisa Brewster, CC BY-SA, modified)





MacGuyver mask tutorial (permalink)

My friends Phoebe and Erc Faden are quite a power couple: she's a restaurateur, cook and crafter; he's a copyfighting film prof. (They fight crime!)

They've combined their superpowers for this awesome DIY "MacGyver Face Mask Tutorial" video.

https://www.youtube.com/watch?v=4Alv5X_A1bw&feature=youtu.be

It's a really amazing collaboration. It starts with this pattern from The Crafty Quilter.

https://thecraftyquilter.com/2020/03/versatile-face-mask-pattern-and-tutorial/

Then Phoebe uses her excellent explaining skills and Eric uses his excellent filmmaking skills to make this legible even for thumbless klutzes like me.

They're also running a Gofundme for central PA healthcare workers' PPE.

If you like the work, check out Eric's other stuff. He's best known in my circles for "A Fairy Use Tale," which uses cut-up clips from Disney cartoons to explain fair use, and which is also a brilliant example OF fair use.



https://www.youtube.com/watch?v=BeKFAM892k4

But even more impressive is "Visual Disturbances," his movie about what eye-tracking tools can teach us about the experience of watching movies.

http://mediacommons.org/intransition/visual-disturbances





Prescient Reagan-era text-adventures (permalink)

Veteran sf webzine publisher Eric Rosenfield's latest venture is Literate Machine, home to long-form essays (also available as podcasts and narrated Youtube slideshows) about capitalism, science fiction, and our political crisis.

https://literatemachine.com/

He's done three excellent installments so far:

A literary history of Catherine "CL" Moore, the pioneering sf writer whose work upended the field, and who exemplifies the way that churning pulp writers produced some literary marvels.

https://literatemachine.com/2020/01/26/vintage-season/

A critique of the Dr Who episode "Kerblam!" and how it illustrates the flawed neoliberal thinking behind the panic over technological unemployment:

https://literatemachine.com/2020/03/29/there-is-no-alternative-doctor-who-kerblam-and-the-specter-of-technological-unemployment/

The history of a bizarre, prescient political text-adventure game called A Mind Forever Voyaging (1985), created by Steve Meretzky (designer of the Hitchhiker's Guide to the Galaxy text adventure) for Infocom.

https://literatemachine.com/2020/03/01/a-mind-forever-voyaging-into-neoliberalism-steve-meretzky-and-the-video-game-that-saw-it-all-coming/

I'd never heard of A Mind Forever, though I was a huge Infocom fan and an even bigger fan of the H2G2 game. It's got a bizarre premise: after the election of a far-right, Reaganesque demagogue, an AI is instantiated to visit simulations of a town at 10-year intervals.

The job of the AI is to walk around this simulated town and report on the long-term effects of these neoliberal policies, so that a far-right Senator can sell the new president's policies to the nation by demonstrating that they'll all work out for the best.

And while the 10-year picture is relatively rosy (they're even setting up moon colonies), the longer-range picture is increasingly dystopian, as religious police seek out criminals to force into slave labor and pit-fighting.

Public parks are taken over by far-right militias backed by billionaires. National forests are razed for strip-mining, etc. As Rosenfield notes, this is not a subtle critique. It's basically predicting that Reagan's policies will produce barbaric oligarchy stabilized by allowing religious maniacs to enact cruel, bloody policies against nonbelievers and members of other sects, allowing the wealthy to rule with impunity.

The only puzzle in the game comes at the end, when the senator who commissioned the experiment learns of the result and decides to suppress it by killing the AI, because in his view, this dystopia is worth the short-term gains he'll receive. You have to outsmart the senator.

While Meretzky's 1985 take on the Reagan dystopia might have felt a little over the top, today it seems mild by comparison, and the decade-by-decade reports an AI visiting a small town in 1995, 2005, 2015 and today are pretty close to Meretzky's parodical guesses.

As Ted Chiang says, the pandemic wouldn't work in fiction, it's an idiot plot, "resolved quickly if your protagonist weren't an idiot. What we're living through is only partly a disaster novel, it's also a grotesque political satire."

https://pluralistic.net/2020/04/02/eff-livestream-today/#disaster-capitalism

You can still play A Mind Forever Voyaging (there's never been a better time).

https://www.myabandonware.com/game/a-mind-forever-voyaging-59/play-59

And here's the supplemental materials that came with the game.

http://infocom.elsewhere.org/gallery/amfv/amfv.html





Landlord accidentally organizes rent strike (permalink)

Saturn Management is a brutal LA landlord. On Tuesday, it sent all 300 tenants an email telling them they had to pay their rent in full, or else, irrespective of state and local emergency tenant protections.

https://la.curbed.com/2020/4/1/21203672/rent-strike-los-angeles-coronavirus

Saturn Management is a stupid LA landlord. Instead of BCCing those 300 tenants, they CCed them. That allowed all 300 tenants to email one another.

They organized a rent-strike.

"They quickly created a communal Google document and a Slack channel, where they have continued to compile complaints about building management and have started to organize plans for a potential strike, which would likely happen in May"

They're working with the Los Angeles Tenants Union:

https://latenantsunion.org/en

"I don’t think they realize that the tool they just provided us by giving us every single email. They essentially did all of the hard work for us." -Strike organizer Roberto Torres.





The Pandumbic (permalink)

This supercut of Fox News hosts insisting that coronavirus is no cause for concern isn't ha-ha-weird, nor ha-ha-funny. It's more ha-ha-Exhibit-A-for-a-future-war-crimes-tribunal. It's the work of The Daily Show (of course), who call it "The Pandumbic."

https://www.youtube.com/watch?v=NAh4uS4f78o

Here's a still version, courtesy of Joey DeVilla.





This day in history (permalink)

#15yrsago Shadow Cities: the untold lives of squatters https://boingboing.net/2005/04/04/shadow-cities-the-un.html

#15yrsago 300 private islands shaped like world map, near Dubai https://web.archive.org/web/20050406012725/http://guide.tenuae.com/living/dubai/the_world_islands.php

#15yrsago Star Wars geeks in line at Grauman's will answer payphone calls https://web.archive.org/web/20050827183820/http://liningup.net/news/2005_04.php

#1yrago Fear that far-right terrorists will stage attacks if Brexit is canceled https://theintercept.com/2019/04/04/specter-far-right-violence-haunts-brexit-britain/

#1yrago Chicago's first gay, Black, woman mayor won all 50 wards, defeating the machine candidate with an anti-corruption campaign https://www.chicagotribune.com/politics/elections/ct-met-chicago-election-results-mayors-race-lightfoot-preckwinkle-20190402-story.html

#1yrago "Open source" companies are playing games with licensing to sneak in proprietary code, freeze out competitors, fight enclosure https://www.scalevp.com/blog/making-sense-of-a-crazy-year-in-open-source

#1yrago A rapidly proliferating software license bars use by companies with poor labor practices https://github.com/996icu/996.ICU/blob/master/LICENSE

#1yrago After Christchurch shooting, Australia doubles down on being stampeded into catastrophically stupid tech laws https://www.theguardian.com/media/2019/apr/04/australia-passes-social-media-law-penalising-platforms-for-violent-content

#1yrago News organizations have all but abandoned their archives https://www.cjr.org/tow_center_reports/the-dire-state-of-news-archiving-in-the-digital-age.php





Colophon (permalink)

Today's top sources: Naked Capitalism (https://nakedcapitalism.com/), Super Punch (https://superpunch.net/), Accordion Guy (https://www.joeydevilla.com).

Currently writing: I'm getting geared up to start work my next novel, "The Lost Cause," a post-GND novel about truth and reconciliation.

Currently reading: Just started Lauren Beukes's forthcoming Afterland: it's Y the Last Man plus plus, and two chapters in, it's amazeballs. Last month, I finished Andrea Bernstein's "American Oligarchs"; it's a magnificent history of the Kushner and Trump families, showing how they cheated, stole and lied their way into power. I'm getting really into Anna Weiner's memoir about tech, "Uncanny Valley." I just loaded Matt Stoller's "Goliath" onto my underwater MP3 player and I'm listening to it as I swim laps.

Latest podcast: Author’s Note from Attack Surface https://craphound.com/podcast/2020/03/30/authors-note-from-attack-surface/

Upcoming appearances:

Short Story Club, April 7, 530PM Pacific https://www.shortstory.club/

Upcoming books: "Poesy the Monster Slayer" (Jul 2020), a picture book about monsters, bedtime, gender, and kicking ass. Pre-order here: https://us.macmillan.com/books/9781626723627?utm_source=socialmedia&utm_medium=socialpost&utm_term=na-poesycorypreorder&utm_content=na-preorder-buynow&utm_campaign=9781626723627

(we're having a launch for it in Burbank on July 11 at Dark Delicacies and you can get me AND Poesy to sign it and Dark Del will ship it to the monster kids in your life in time for the release date).

"Attack Surface": The third Little Brother book, Oct 20, 2020. https://us.macmillan.com/books/9781250757531

"Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583

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When live gives you SARS, you make sarsaparilla -Joey "Accordion Guy" DeVilla