David Sirota, editor-at-large at Jacobin magazine, discussed how private equity companies are using low-interest federal loans to fund dividends for owners.
“It’s essentially taking a loan that could be used to invest in the company but the debt is simply used to enrich the private equity owner,” Sirota said on Hill.TV’s “Rising” Friday.
“So obviously the public policy question is, is that really what the Fed policy should be doing?”
According to the Financial Times, in September almost 24 percent of money raised in the U.S. loan market has been used to fund dividends to private equity owners, up from about 4 percent over the past two years.
“[The policy] is creating more capital for the richest people in the country, billionaire owners, to simply use to enrich themselves. What good is that for the economy?” Sirota said.
Watch the interview above.