AI (and Private Equity) are the Symptom, not the Disease

Really appreciated this interview with Megan Greenwell about her new book, Bad Company, which examines the role of PE firms in the destruction of 4 businesses across different industries, including rural hospitals and Toys R Us.

The key takeaway is that PEs are like weeds. They come in and choke the remaining life of an ecosystem where self-inflicted damage had already occurred.

the four industries I write about—housing, hospitals, retail, and local media—got themselves into trouble in the first place. In all of those cases, the problems are so fundamental. And in many of those cases, the earlier business decisions were so bone-headed that they essentially opened the door and invited private equity to walk right in. I do think private equity is a villain in terms of the way they have taken advantage of these industries for their own gain, but it is absolutely true that they did not cause the problems.

In this way, you can see how AI is acting in a similar manner to PE firms when it comes to higher education. It's extractive by nature, but it wouldn't be able to capture such a toehold if higher ed hadn't already been diminishing itself for decades by positioning themselves as offering workforce-ready degrees, skills-based credentials, etc. that diminish the value of education and reduce it to a market-ready credential.

Embracing won't save Higher Ed, but it sure may kill it off.

Recession Signs and Portents

A number of indicators of a coming recession are beginning to surface on the regular now.

Created by UMich Econ Professor Justin Wolfers from OMB data June 2025

Growth is stalling, and housing starts are plummeting.

Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,393,000. This is 2.0 percent below the revised April rate of 1,422,000 and is 1.0 percent below the May 2024 rate of 1,407,000. Single-family authorizations in May were at a rate of 898,000; this is 2.7 percent below the revised April figure of 923,000

Lowest rates since COVID. Gulp.

Charging More for Worse Technology

This is pretty much the story of AI, isn't it. Companies like Microsoft (productivity suite), Google (search), and Salesforce (CRM) all went heavily on sticking AI into their products, which became objectively worse, the companies didn't really benefit from this and so are now charging more for products that don't work as well.

Innovation, innit.