Carlos Herrera

Gretchen Morgenson posing for a picture with her book, “These are the Plunderers How Private Equity Runs — and Wrecks — America.” Feb. 20, 2024.

Gretchen Morgenson, a Pulitzer prize winning investigative journalist and author of “These Are the Plunderers: How Private Equity Runs—and Wrecks—America,” warned NMSU students, faculty, and alumni about the ways private equity impacts their community at a book-signing and speaking event on Feb. 20. 

“This shift, [towards private equity] which began two or three decades ago, has accelerated in recent years, and involves a very small group of celebrated and wealthy financiers whose exotic and intricate takeover deals are ravaging workers, pensioners, taxpayers, and entire industries, especially health care,” Morgenson said.  

The author was co-hosted by NMSU’s College of Business and Center for Border Economics. 

“You’ve got to be able to make the right ethical choices,” Ashenbaum said, “And the right ethical choices sometimes coincide with what businesses also want to do to make money and be prosperous. Sometimes maybe they don’t, or not as much and you’ve got to know what the right thing to do in that situation. So [business students] need to hear that.” 

Private equity is the buying and managing of companies before selling them later. Morgenson explained that private equity firms often buy a company with borrowed money. The pressure to make a lot of money off of the company to pay back the debt with a quick turnaround contributes to increased prices, she said. 

“This pressures them to cut corners to raise the costs of the products they sell, and then also encourages them to diminish the quality of those products, customers and workers take the brunt,” Morgenson said. 

Besides rising costs, Morgenson described other damages done by private equity firms. She told stories about people who were fired because of cost-cutting measures, patients who died after receiving inadequate care, and a slaughterhouse cleaning company that employed children as young as 13 years old. 

“The circle of pain associated with P.E. is wide and it’s real,” she said. 

According to Morgenson, the industry most affected by private equity was hospitals. Private equity firms own 40% of hospital emergency departments, 11% of nursing homes, 9% of anesthesiologists, and 8% of all hospitals. One of them is Memorial Medical Center in Las Cruces, which was bought by LifePoint Health in 2005. 

“I have been talking to patients about it and they have some real horror stories to tell about how they’re treated; how care is denied. And again, it’s this idea that profits come first, and patients in this case, come a distant second,” she said. 

She expressed that her goal is to bring more awareness to the general public who often are unable to defend themselves because of their lack of knowledge about how private equity impacts them. 

“The important thing here is for people to know what’s happening, because it’s secretive,” she said, “And so pulling back the curtain was my goal, and to try to make people smarter about what’s happening, so that they can protect themselves from the, you know, real problems that result from this. Now, there’s not a lot people can do, but at least if they know what’s happening, they can be educated consumers and educated workers.”  

Students attending the event conveyed their appreciation for Morgenson’s speech and the awareness it gave them. Marketing major Alex Guljas said he is hopeful that more people will become aware of the issue. 

“I also got the impression that, hey, if people are paying attention to this, people are kind of bringing it into the light so that we can actually talk about it and figure out solutions to it. So that was a good little glimmer of hope that she’s even here telling us about it,” Guljas said.