Rep. Alexandria Ocasio-Cortez YURI GRIPAS/Reuters

Democratic Rep. Alexandria Ocasio-Cortez of New York made a case against the private-equity sector on Tuesday, blaming it for massive job losses and calling for tougher regulations.

„We’re talking about reining in private equity, which is responsible for wiping out tens of thousands of jobs at Toys R Us alone,“ Ocasio-Cortez said.

Private-equity firms buy struggling companies and then revamp them to increase their short-term profitability and lure a buyer. Then they sell them, hoping to turn an even bigger profit.

Private-equity executives say they rescue mismanaged companies on the verge of bankruptcy and leave them in a healthier state. But critics argue such firms strip businesses bare and fire workers in their drive to rack up massive profits.

Back in July, the New York congresswoman joined other Democrats to introduce the Stop Wall Street Looting Act.

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As the US cast its gaze onto another round of public testimony in the House impeachment inquiry into President Trump on Tuesday, congressional Democrats on the House Financial Services Committee held a separate hearing delving into the practices of the private-equity industry.

Democratic Rep. Alexandria Ocasio-Cortez of New York made a case against the sector in the hearing, blaming it for massive job losses and calling for tougher regulations.

„I wasn’t sent here to safeguard and protect profit,“ she said. „I was sent here to safeguard and protect people.“

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@RepAOC lays out how #PrivateEquity is responsible for wiping out tens of thousands of jobs:

Toys R Us: 30,000 jobs wiped out ✖️

ShopKo: 14,000 jobs ✖️

Not to mention the undemocratic impacts on media companies: Splinter, Deadspin, local newspapers ✖️pic.twitter.com/oQcUadMWRA

„We’re talking about reining in private equity, which is responsible for wiping out tens of thousands of jobs at Toys R Us alone,“ Ocasio-Cortez said, referring to the iconic retail chain that declared bankruptcy last year, shuttering its stores and laying off all its workers.

Ocasio-Cortez continued: „And then we’re hearing, ‚But what about the companies that made 100 jobs here, or 200 jobs there?‘ Toys R Us, 30,000 jobs wiped out. ShopKo, 14,000 jobs. Brookstone, David’s Bridal, Payless.“

Then the New York congresswoman listed several media publications that suffered withering layoffs, including Splinter, Deadspin, Sports Illustrated, as well as local and regional newspapers that have been gutted under private-equity ownership.

She called it „undemocratic“ and blamed the industry for at least 590,000 job losses over the past 10 years before starting to question Giovanna De la Rosa, a progressive advocate and former Toys R Us employee. She testified that retail employees had their work hours cut and benefits trimmed to save the company costs.

„We need to think about our economy not just in terms of the returns for stockholders,“ Ocasio-Cortez said. „But in terms of how the lives of workers are impacted.“

She largely struck a discordant note in the hearing, however. Politico reported that Republicans and several business-friendly Democrats downplayed the controversies around the private-equity sector and drew attention to its economic benefits instead.

The private-equity sector has grown, but it’s associated with job losses

Private-equity firms buy struggling companies and revamp them to increase their short-term profitability and lure a buyer. Then they sell them, hoping to turn an even bigger profit.

Firm executives say they rescue mismanaged companies on the verge of bankruptcy and leave them in a healthier state. But critics argue such firms strip businesses bare and fire workers in their drive to rack up massive profits.

Since the financial crisis a decade ago, the sector has vastly expanded its influence and reach into services critical to American life, The New York Times reported.

Certain segments of the economy have been hit hard as a result, and evidence is mounting that private-equity takeovers can lead to job losses. One study from a group of progressive organizations released in July found that private-equity ownership of retail had eliminated 1.3 million jobs in the sector in the past decade.

Another study published by Josh Lerner of Harvard Business School and Steve Davis at the University of Chicago last month found job losses averaged about 4.4% in the two years after a private-equity firm took over a company.

Over the summer, Ocasio-Cortez joined other Democrats to introduce the Stop Wall Street Looting Act. It seeks to overhaul the sector by „holding private equity firms jointly liable for the debts of companies under their control and by requiring greater transparency in private equity firms‘ practices,“ the bill says.