And yet, in America, the widespread prejudices against those who live in trailers, as well as the downsides of owning and renting them, have long kept them attainable for the rural and suburban poor. Mobile homes are uniquely prone to bad weather — hence the slang term “tornado bait” — and if they catch fire, they can burn to the ground in just 10 minutes. You can’t park a trailer in most neighborhoods, so living in one often means longer commutes to work and a dependency on driving in every aspect of daily life. Trailers are considered personal property, not real estate, and, like other personal property, they depreciate quickly: 10-20% in the first year and 3-5% each year after, though this depends on location and upkeep. It’s an ugly affirmation, but a true one: in a market economy, the best way to keep housing affordable is to make it undesirable. 

As home prices and apartment rents climbed precipitously in the 2010s, the trailer park remained a refuge for the poor (I would like to go back to “poor” rather than the anodyne “underprivileged”, because it ought not be a privilege to have food and a place to eat). But after three rounds of quantitative easing (one to save the global banking system, and two more because speculators really liked the first one), all the obvious investments were taken. When QE4 came during the pandemic, pumping an unprecedented $4 trillion into the financial system at a time when interest rates were near zero, those of us who didn’t have money were perplexed to hear of investors paying tens of million dollars for NFTs or properties in Mark Zuckerberg’s now all-but-defunct Metaverse, not to mention crypto billionaire Justin Sun’s purchase of Maurizio Cattelan’s “artwork” Comedian — a banana taped to the wall that Sun subsequently ate onstage. Never has the argument that the rich must be allowed to operate untaxed and unregulated looked stupider; but amid this idiocy, a more insidious form of extractive rent-seeking was also at work. Institutional investors were dumping mountains of loose cash into the goods and services people’s lives depend on: healthcare, nursing homes, rehab facilities, and housing. “Alternative real estate” was a big part of that, including co-working spaces, student housing, data centers — and trailer parks. 

The trailer park has proven particularly enticing to private-equity investors for a number of reasons. It is largely recession-proof, because for many, it is the last stop before homelessness, and people will do anything they can to avoid eviction. And zoning laws prevent the opening of new trailer parks in many municipalities, so landlords enjoy the advantages of cartel pricing in a nominal free market. It is, incidentally, worth noting that around two-thirds of manufactured home residents own their homes, but most rent the lots where they sit, while the other third rent home and lot together.

Though, in theory, manufactured homes can be moved, doing so is expensive: around $3,000 for a short move, and up to $20,000 for a long one. Given that the median income for trailer owners is $38,087, and for renters it’s $28,280, park residents are essentially stuck. With modest initial investments — the cost of land or $50,000 for a new single-wide trailer vs. hundreds of thousands of dollars per newly built apartment or home — developers get a significantly higher return on investment than with traditional properties, making it clear why, during the pandemic surge, nearly a quarter of manufactured housing transactions involved institutional investors.

Since 2022, with the spike in interest rates, enthusiasm for investing in trailer parks has waned somewhat — though a friend who owns parks in Virginia tells me not a week passes in which he doesn’t get calls from potential buyers. If the pandemic marked the accumulation phase for large landlords, the years since have brought the squeeze. Talk to anyone whose park has been purchased by a private equity firm — there are now 1,900, accounting for more than 400,000 lots, according to the Private Equity Manufactured Housing Tracker — and you’ll hear the same story: rents go up, services decline. Often this is a prelude to a sale: by immiserating tenants, landlords add value to their assets, which they can then unload for a premium. An irony is that almost half of trailer park purchases were aided by government-sponsored lenders Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation), yet most individual mobile home purchases are ineligible for this financing. 

There was a time when firms would claim that rent increases were justified by capital improvements. Now the gloves are off; owners wave their hands at “the market” and jack rents up to the maximum tenants can bear. At Smoky Palms North in Clinton, Tennessee — an extremely landlord-friendly state where 35% of households are considered at risk of eviction — a new owner, Volunteer Runway Communities, recently raised rents for some tenants more than 100% overnight.

Not content with extortionate rates, many such companies also fleece their residents on fees. Nowadays, “convenience fees” and processing fees for paying your rent are increasingly common. Submetering companies — third-party services that bill residents for public utilities — often charge exorbitant costs as well. Several have been found to be giving kickbacks to landlords with the blessing of the free market — free for the rich but often a prison for the poor — as long as they’re called “incentives”, “revenue sharing”, or a “door fee”. 

Then there’s the “self-help eviction” strategies such as removing a tenant’s windows and doors. These are illegal almost everywhere, but nonetheless common, and there is little a resident can do about them. Business Insider found that though most states have penalties for illegal evictions, police rarely investigate tenants’ complaints. Even more powerless are the many undocumented workers who live in trailer parks — or even legal residents who might look or sound foreign, since racial profiling is now a matter of “common sense” according to Supreme Court justice Brett Kavanaugh. Many are rightly afraid of collusion between state and local police and ICE. 

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The liberal lie about gentrification

By Adrian Nathan West

In January, Donald Trump signed an executive order, “Stopping Wall Street From Competing With Main Street Homebuyers”, that targets institutional investors. A good thing, as far as it goes, but its effects will be modest to say the least. It applies only to existing homes, and so won’t touch the large, publicly traded firms like D.R. Horton, which is now responsible for around half of new construction in America. It does nothing about bulk sales, which bypass individual buyers in favor of investment companies that purchase blocks of dozens or hundreds of homes at a time; and it makes no provision for trailer parks at all. 

For many of us, homeownership means security: having a piece of the world no one can take away. But a recent article by Rebecca Egan McCarthy shows how different the situation is for trailer owners on rented land. She visits a park in Archbald, Pennsylvania, whose residents are being evicted to make way for a data center; the same thing is happening to another one in Mason County, Kentucky. There, the unnamed company has offered owners compensation to move their homes, but there aren’t enough nearby parks to absorb them. This kind of thing must occur, according to our current crop of hype-vending luminaries, to reach Artificial General Intelligence, about which a plurality of Americans holds a negative view. AGI will allegedly eliminate a large proportion of our jobs, though not, presumably, the jobs of the job destroyers, who are important, because they are also job creators, per an ever-staler Republican dogma. Or maybe the myth of the mogul as job creator is dead now: maybe pure exploitation is no longer gauche, and crushing the weakest and least fortunate is winning, to use Trump’s favorite word. 

But if you think otherwise, the combined work of resident activists, nonprofits, and politicians in Maine — where mobile homes make up 8% of housing stock — shows a path forward. Private-equity investors purchasing manufactured homes there must now contribute to a preservation fund for mobile homes and manufactured housing, and there are tax breaks for landlords who sell to homeowner’s cooperatives as opposed to private equity buyers. Park residents have a right of first refusal — if they band together and can match an investor’s offer, owners are legally obliged to sell to them. Troy Jackson, a candidate in Maine’s gubernatorial race, recently declared in an ad: “We must clamp down on greedy private equity landlords”. This strong rhetoric is right for the moment. If we’re stuck with populism, as seems to be the case, then one that targets billion-dollar companies picking at the bones of the most defenseless is preferable to the de facto royalism to which the American Right has capitulated.

Even if the crash wiped out only a vocal and desperate minority of leveraged retail traders, it revealed how dependent many Americans, especially young men, are on various forms of gambling for income. Other symptoms of this dynamic included the “Liberation Day” mini-crash in April and the Gamestop stock craze in 2021. The risks that retail traders are taking seem more and more dramatic; a few make millions and post their winnings on Reddit; thousands seek to emulate these gains and get wiped out.

The economy of the 2020s is marked by a nervous, Zyn’d up desperation. The emergence of prediction betting markets like Polymarket, Kalshi, and Robinhood, moreover, suggests that an entirely novel economic system — the casino economy — has emerged from the information economy, the same way the information economy emerged from the midcentury industrial economy. 

Platforms like DraftKings, Robinhood, or Kalshi clearly incentivize us to engage in gambling behavior. And an extremely fragile labor market and future for labor means gambling to survive is increasingly necessary. The crypto crash illuminated, but did not create this reality; gambling (like OnlyFans, to cite another adjacent phenomenon) happens in proportion to a decay in dependable, salaried wage labor.

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The Millennial virtue economy is dead

By Matthew Gasda

We are pushed and pulled into the casino economy. This is an enormously complex phenomenon, but it’s worth trying to understand why this is happening and what the ramifications are.

One factor is that the information economy — sometimes known as the economy of bullshit jobs or email jobs — de-conditioned millions of college-educated Americans to tangible toil, as technical or laboring jobs were shipped overseas or taken by cheap migrant labor at home. These shifts, determined by Wall Street, the cheap-labor lobby, and neoliberals in both major parties, were of immense public consequence; yet the public had little input into them. Between 2008 and 2023, the real economy shrank. Young people entering the labor market either managed to secure email jobs (IT, management, human resources, and the like) or fell into an abyss of service-sector precarity; many straddled both sectors, serving as adjunct philosophy teachers by day and as baristas by night. 

The Obama economy’s rebound after 2008 was partly driven by the lottery-like dynamics of NGO jobs and tech jobs — by private and public email jobs. Getting an email job at a startup that succeeded could mean being set for life, while the runners-up would remain economically insecure. These jobs were also ideologically aligned, meant for and granted to so-called coastal elites with the requisite progressive views. This was the economy of New York, LA, DC, and Seattle (the heartlands were buoyed by natural gas, but those jobs also came under attack from the green agenda).

The problem with the Obama-era version of the information economy was that the products minted by NGOs and tech companies and advertising firms didn’t help us do anything — didn’t improve our quality of life. NGOs too often took up niche causes (while laundering their donors’ money). Tech companies visibly eroded quality of life (addictive social feeds, for example, mean going to restaurants where people at the same table scarcely look at each other, let alone, you know, talk). Private equity and hedge funds asset-stripped the real economy, piling debt atop debt to buy up legacy firms, refusing to invest in them, and thus dramatically boosting the likelihood of bankruptcy.

Getting an email job in 2011 was like winning the lottery (especially when those jobs came at startups that vested equity in the company); but the “good” jobs that Millennials found or created in the early Obama era were largely fake in the sense that they what they “produced” was bad for everyone who didn’t work in tech, finance, or advertising. These jobs contributed to the erosion of community life, and detracted from the well-being of Americans at large, and so there was never growing prosperity, or — to borrow the buzzword du jour — collective “abundance.”

The Millennials who were doing well in the Obama economy were doing so at the expense of many  others who weren’t. The product manager who made Facebook more addictive enriched himself at a cost to its users. NGOs that pushed ideological propaganda into school districts or hospitals or the arts achieved narrow victories for themselves, but inflamed social tension, disempowered parties and other mass-membership organizations, and eroded the quality of discourse. 

This economy was value-negative, and its economic benefits, what there were of them, were not well-distributed geographically or across class lines. It was an economy of gross inequality. It now appears to be giving way to something else. Between 2009 and 2019, the top 1% of US households captured roughly two-thirds of all wealth gains; median household wealth, by contrast, barely returned to pre-recession levels. During the same period, private-equity assets under management mushroomed to more than $5 trillion, up from about $1 trillion, and tech giants became Leviathans.

As the email economy falters, and as email jobs are either cut in Washington by a populist Trump administration or replaced by AI, elite laptop-class and credentialed coastal professionals are still habituated to expecting a lot for not a lot of work. That’s where the gambling mindset comes in. Stated bluntly, whether you got into the email job economy and are now feeling precarious, or whether you, like myself, never made it in, you have incentive to gamble.

Yet we have neither the skill nor the taste for the daily, dependable, reliable labor of our grandfathers and grandmothers. The insignia of the information economy — bloated degrees, bloated grades, bloated accomplishments, ideological hypothyroidism — are increasingly useless, and probably should be useless.

The casino economy stands at the threshold of the information economy and whatever comes next. What’s less clear is whether it’s transitional or semi-permanent. It may define the whole next era. Americans have some agency yet in this historical unfolding.

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Beware San Fran’s rationalist cult

By Matthew Gasda

While the long-term success of the Trump administration’s economic agenda is far from guaranteed, there’s a refreshing long-termism in the integrated platform of tariffs, corporate reinvestment, and public stakes in private companies — especially companies related to national security, chips, heavy metals, aerospace, and defense. Reduced dependence on migrant labor, which suppresses wages on the lower rungs, would also have long-term benefits. The Trump administration would like to get America back to making things, and for those things to be made by Americans. (On the other hand, Trump’s embrace of crypto and rampant speculation provides reason to be skeptical. There’s a worrisome, even loathsome, enthusiasm for vapor over material abundance.)

And the revitalization agenda is somewhat bipartisan. The most salutary aspect of both parties’ economic ideals is connected to re-embracing the real, rather than the informational, fake product and fake productivity. The general popularity of economic visions predicated on material, street-level reality is encouraging (in contrast to the 2010’s emphasis on ideological and digital “progress”).

At the same time, both parties and politicians across the spectrum are speculators themselves, trading inside information for massive stock gains. (Members of Congress consistently outperform the market by 6% to 12% annually). The casino economy has also been casino politics for a long time.

As for me, I buy dividend stocks, having gotten burned by day trading in 2021. Occasionally I’m tempted into losing money on a football or basketball game. I really enjoy my weekly poker games and the friends I’ve made playing poker. But what I’d like is to not be quite as excited as I am when I can buy groceries with my poker winnings, and for my friends to not be worried about the price of Etherium as it drops in real time during our game. I’d like gambling to be fun (again).

Despite its origins in the post-Second World War period, the history of private equity really begins in the Eighties, the decade in which Western countries abandoned Keynesian economic management for the small-state ethos of the neoliberal regime. Coincident with this turn was the start of a long trend of rising economic inequality. This was driven by two broad changes: the rise of the developing world, led by China, which reduced inequality between rich and poor countries. And the widening of inequality within countries, as newly liberated business owners were empowered to drive down wage bills and drive up profits. When plotted onto a graph, the result was the elephant curve. It provided a visual illustration of how, since 1980, the global one percent captured twice as much of global growth as the bottom 50%.

With ever-swelling pools of capital, this rising international class changed the way they managed their wealth. Having previously invested largely at home, spearheading the growth of national economies, the one percent globalised, shifting capital offshore to exploit the even higher returns of low-wage economies. While this stimulated the rise of a middle class in the developing world — the middle “hump” of the elephant — it also fuelled the deindustrialisation of Western countries. The working classes were shattered, one consequence being the “deaths of despair” that have been chronicled by Anne Case and Angus Deaton.

Profits, however, surged. This gave owners both more capital to invest but also, in an environment where deregulation was underway, more liberty to deploy their capital in aggressive ways. There arose a new breed of owner who was “private” in that they took over publicly-listed firms, often using borrowed money, then removed them from the stock exchange and the prying eyes of shareholders. Thereby free to do as they pleased, they could lay off workers, close shops, sell assets or transfer any debts they had used to buy the firm onto its books. The leveraged buyout was born, and the Eighties corporate raider would go on to be immortalised in the character of Wall Street’s Gordon Gekko, his “greed is good” mantra embodying the ethos of the neoliberal age.

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BlackRock’s tyrannical ESG agenda

By John Masko

Like the fictitious Gekko, neoliberal intellectuals maintained that enlightened self-interest, as they preferred to call it, would ultimately benefit everyone. As Bill Clinton insisted when pushing back against private equity’s critics — perhaps ominously in an interview with that celebrated do-gooder, Harvey Weinstein — private equity was helping to revive sick firms and thereby reinvigorate the economy. The story private equity’s exponents told of its virtues might have been lifted from an Ayn Rand novel, in which visionary entrepreneurs take over a moribund publicly-traded firm, get rid of the risk-averse technocrats running it, then apply the tough love it needs to turn around.

Yet there was a dark side to this new era of plutocracy. While the ascent of such barons seems reminiscent of the Gilded Age, today’s elite tend to favour a different business model from their entrepreneurial Victorian predecessors. Whereas the latter were profiting off the wrenching transition of agricultural societies into industrial ones by building things — in particular, railways — today’s elite appear parasitic by comparison. In many cases, what private equity delivers amounts to asset-stripping or consolidations that leave most people worse off, yet add little new output to the economy. This has been called “conspicuous destruction”.

A popular strategy is to acquire a firm using borrowed money, transfer the debt onto the firm, and then run down the firm to pay hefty dividends. Pioneered in the US airline industry after its late-Seventies deregulation, the Eighties would see Carl Icahn buy Transworld Airlines, load it with debt while paying himself hefty profits, and then gradually sell off its assets until it went bankrupt. That same decade, Frank Lorenzo would acquire Eastern Airlines, transfer its assets to another non-union airline he ran, then shut it down.

Of course, you don’t need a private equity front to do this, as any long-suffering Manchester United supporter will tell you (and Lorenzo similarly kept his companies public). But a big advantage of the private equity model is that, unlike United’s much-reviled owners, the beneficiaries remain hidden from public view. By the time the sewage from a privatised utility shows up on public beaches, or tenants are evicted from a council estate after its new owners convert it to luxury condos, the damage has been done.

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Welcome to the cashless dystopia

By Rachel O'Dwyer

As was the case in the original Gilded Age, today’s barons benefit from the collusion of politicians. The shift to a neoliberal policy regime made credit easier to access, deregulated the way businesses operated, and sold off state assets in the name of greater efficiency. A little-known fact of the era of low taxes is that governments were able to contain their spending by selling off the family jewels, then spending the proceeds. As a result, most Western governments now show a net negative worth on their balance sheets. Given that private equity has been a keen participant in this transfer of state assets to private hands, it looks like a terminal phase of Western capitalism, as public spaces are run down to line private pockets and poor people are squeezed hard to support the rich in their glamorous lifestyles.

But it’s actually more complicated than that. Although the growth of private equity has coincided with widening inequality, the latter has not been the sole driver of the industry. There’s another thing that has accompanied the rise of private equity: ageing societies.

When Margaret Thatcher and Ronald Reagan were elected, roughly a tenth of the population in developed countries were retired. Today that share has doubled. Meanwhile, improved health and nutrition have meant that people are living longer. Whereas the average life expectancy in Western countries was about 10 years past retirement in 1980, today that figure has more than doubled. Several Western societies have now crossed the threshold beyond which some people spend more time collecting a pension than they did working for it.

As a result, more and more people now have to be supported by a workforce which, in relative terms, is contracting. This would be challenging enough. What makes it even tougher for Western governments is that the growth of labour productivity, which was rising steadily throughout the post-war period, has now slowed to a crawl. So the hope that fewer workers could support more people by producing more is looking decidedly Pollyannish. Instead, more must be squeezed from the working population.

This can only go on for so long before something breaks. One obvious solution is to reform the pension system, by reducing benefits or raising retirement ages. But given that pensioners are among the most politically engaged in the population, politicians shy away from such decisions. Instead, they’ve tended to move in the opposite direction, as Britain has done by raising benefits. Western governments have funded the increased largesse with tax rises or cuts to other public services and, to bolster private pensions that get no state funding, policies that juice returns on asset markets, such as the loose monetary policies, privatisation and deregulation that have transferred assets to private equity.

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The myth of Chinese imperialism

By John Rapley

In recent years, pension funds have collectively become the biggest investors in private equity. When tenants of a London council estate organised a rebellion against their eviction, they discovered that the new landlords were a private equity firm owned by American pension funds. Canadian pension funds occupy a similar role in Britain’s privatised water utilities, which have allowed sewage to flow into seas and rivers. In effect, tenants and workers are getting squeezed in no small measure to keep retired teachers and civil servants in the style to which they’ve grown accustomed.

It always astounds people, but it’s true: the one percent don’t exist in mythology but in our neighbourhoods, dining alongside us at our favourite restaurants and bumping into us as they walk their dogs. That’s because, statistically, any homeowner with a defined-benefit pension is part of the one percent that sits atop the global economy.

Life has recently become more difficult for private equity, as central banks abandon their easy-money policies. Returns are falling and new money is drying up, but demands for cash from investors continue. As a result, private equity firms are resorting to increasingly opaque deals, such as transferring assets across their own funds, to meet investor demands for cash. Given how unregulated private equity is, it could be storing up some nasty surprises should the markets turn sharply.

Private equity is thus coming into the crosshairs of politicians and regulators. As our leaders come face to face with the pension funds that invest in private equity, they will confront tough choices. Would private equity be too big to fail? Nobody wants to be blamed for pensioners being told their monthly payments will be frozen for the foreseeable future — but the alternative, of boosting fund values with the time-worn method of easy-money policies, looks ever less likely in an environment of persistent inflation. Major problems may therefore be brewing in the pension industry.

Indeed, pension pots would be a possible target for a tax raid, as collapsing public services across developed economies are forcing politicians to fund spending rises. Before singling them out, though, it’s worth noting that while the one percent have benefited more than most of us from the neoliberal age, their gains pale in comparison to the 0.1%. If we’re to start taxing the rich more, this would be the better place to look.

Whether or not politicians want to tackle topics such as inter-generational justice or the sustainability of the pension system, events in markets may force the question of retirement’s future onto the public agenda. Higher interest rates have begun to knock down asset values and hit profits. If this continues, fund managers will eventually have to deliver the news to their clients. That may turn out to be the nastiest surprise private equity is storing up.