It starts with a closing store. [View all]

[AStern]

It starts with a closing store. Joann Fabrics, bankrupt. Hooters, shuttering locations. Retailers disappearing not because the public stopped caring, but because someone, somewhere, quietly decided there was more money to be made if these companies died slowly under a mountain of debt. And as Americans watch their favorite shops vanish and their towns hollow out, most never realize the true cause isn’t market trends or bad business decisions. It’s financial engineering, executed with surgical precision by private equity firms, and silently financed by trillion-dollar asset managers who have woven themselves into every crevice of the global economy.

The story of Joann’s and Hooters mirrors what we’ve seen in dozens of other industries. A private equity firm buys a company using borrowed money, loads that company up with the debt, extracts value through dividends, fees, and sale-leasebacks, and leaves behind a husk. Eventually, the company buckles under the weight. Chapter 11 becomes inevitable. Workers lose their jobs, towns lose their anchors, and the very firms that orchestrated the collapse walk away richer.

Coos County, Oregon, where I live, has been directly impacted by Joann Fabrics' recent closures. The loss of this store is significant for the Coos Bay community, as it served as a primary destination for crafters, quilters, and DIY enthusiasts. Residents have expressed concerns about the lack of local alternatives for purchasing fabrics and craft supplies, highlighting the store's role not just as a retailer but as a community hub.

But private equity isn't acting alone. The financing for this destructive cycle comes from the top: BlackRock, Vanguard, and State Street. Together, these asset managers control over $20 trillion in assets. That’s more than the GDP of the United States. While private equity is the scalpel, the Big Three are the blood supply. They provide the capital through pension funds, retirement accounts, and institutional clients. Your 401(k), your union's pension, your child’s college fund, these are the sources. The money fueling the collapse of Main Street isn’t coming from faraway billionaires. It’s coming from us.

And the system is designed to keep us in the dark. Asset managers claim they are passive investors. They say they don’t direct company behavior. But this is a legal fiction, one that lets them skirt regulatory scrutiny while accumulating an unimaginable amount of economic power. Through their stock holdings, they quietly vote on board members, executive compensation, and mergers. They sit behind closed doors in meetings with CEOs. They don’t need to bark orders. A nod from BlackRock is enough.

Take the fire truck crisis. In towns across America, fire departments are waiting years for new trucks. Existing vehicles sit idle because a proprietary part is backordered. Emergency response times worsen and fires spread. In California, as wildfires tore through neighborhoods, dozens of fire trucks were stuck in municipal boneyards, out of commission for months, because the parts to fix them were delayed or locked behind REV Group's proprietary repair network. These trucks weren't waiting on forest management or fuel. They were waiting on monopolized bolts and hoses. Why? Because a private equity fund rolled up nearly every major fire truck manufacturer and created a bottleneck, deliberately. They slashed production, standardized models, patented parts, and cut the workforce to juice returns. And just like with Joann’s or Hooters, they were funded by institutional money managed by BlackRock and its peers.

The revolving door with government adds another layer of insulation. BlackRock alumni advise the White House. Former central bankers sit on its payroll. Larry Fink, the company’s CEO, sought a cabinet position under Hillary Clinton and now shapes economic policy through proximity and lobbying. BlackRock isn’t just powerful. It is embedded in the very machinery of public life.

When regulators tried to classify BlackRock as systemically important after the 2008 crash, the company doubled its lobbying budget. It funded metro ads targeting policymakers. It self-certified that it didn’t pose a threat. And it worked. BlackRock evaded oversight while continuing to grow. Now, it owns 5% or more in nearly every major corporation. In Amazon it owns more than Jeff Bezos himself.

This isn’t shareholder democracy, rather it’s shareholder oligarchy. The top 1% now own over 50% of corporate equity. The bottom half of Americans? They own almost none. And yet their lives are shaped every day by decisions made by firms that answer only to profit, and only to each other.

And that’s where the illusion of competition breaks down entirely. When BlackRock owns big stakes in Nike, Adidas, Under Armour, and Lululemon, it no longer matters who wins. Competition is blunted. Prices are stabilized, high. Wages are suppressed, low. And the consumer pays more for less, all while being told the market is working.

This is extractive monopolism in a passive disguise. A system where the financiers who profit from destruction also fund the rebuilding. Where every fire truck, every shoe, every grocery aisle, every failing company is just another asset on a spreadsheet managed by a man you’ll never meet, backed by your own retirement savings.

BlackRock doesn’t own everything. But it controls just enough of everything to make sure nothing escapes. The money always flows up. And the collapse, when it comes, will be ours to clean up.

Until we recognize this system for what it is, a quiet coup of capital, we’ll keep watching the fires burn from the sidelines, waiting for a truck that may never come.

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