Counterpunch: From the Kingpins of Private Equity, A New Dagger to Democracy
Institute for Policy Studies associate fellow Sam Pizzigati asked if democracy in the United States could be disappearing and called the private equity industry a danger to American democracy.
Counterpunch, February 22, 2022: From the Kingpins of Private Equity, A New Dagger to Democracy
Citing analyses by the Private Equity Stakeholder Project in the healthcare industry, labor and jobs and the climate crisis, Pizzigati wrote that there “may be even more insidious… impact on democracy writ large… than the profiteering on display in all these individual economic spheres.”
In particular Pizzigati looked at the newspaper industry and “the cratering impact private equity is having on civic engagement, the lifeblood of any culture that professes to be ‘democratic.’” He tracked how in 2002, private equity funds owned only about 5 percent of local newspaper dailies. By 2019, he wrote, the private share had nearly quintupled, to 23 percent.
See additional coverage of private equity ownership of newspapers by The Washington Post and Nieman Lab.
The impact of private equity ownership, according to Pizzigati, includes cutting staff, “with the number of reporters down an average 7.3 percent and the number of editors down 8.9 percent” stressing not just the families of the newly jobless but “our democracy.”
Researchers at CalTech and NYU found “changes to newspaper content can affect public knowledge far beyond” and “nationalize” an individual newspaper’s readership.
People in communities with private equity-owned newspapers have less information about local issues circulating all around them and tend to become less engaged in the give-and-take necessary to democratically address the issues that confront their communities. Pizzigati concluded the research showed that after private equity takeovers, people in communities with private equity-owned newspapers vote less in elections for local political office.
Pizzigati pointed to the growing movement for nonprofit local journalism as one way to resist private equity’s takeover of local news.