In general, the company that was bought was likely being outcompeted or soon to become outcompeted. There's a reason the PE bought it: to turn it around into something that is better than the previous owner could achieve.

You can only make money in an LBO if you meaningfully improve margins or you grow massively such that the debt portion of enterprise value becomes smaller. In both cases, the company is better off than it was before.

I do think there are limits to the value that PE can bring and there are many bottom feeders going into businesses they shouldn't, like fire trucks. But not all of PE is bad.

The better solution is to tax PE capital gains as income so they pay their fair share of taxes, making good deals harder to find, drying up some appetite for that highly saturated part of finance, and returning more value to communities when they do succeed.

I just wanted to say that you're absolutely correct on everything, but I wanted to add a point:

We have spent the last 50-ish years "legitimizing" things like PE buying up essential services and implementing cost cuts. When I say "legitimizing", I mean we keep removing the avenues for the "regular people" to legally and formally reduce the harms that this sort of business brings about. It becomes just a fact of life: people can come in and do this and you have to "deal with it".

When you have people dying, watching their streets crumble, have garbage piling up, etc., you can't just think that "regular people" (or maybe "the little people", as some businesspeople might view them) will "deal with it" forever, regardless of how much legal, financial, and political cover you provide yourself. At some point, there will be a reckoning. In that case, you'll prefer that it be through a regulation change, lawsuit, or lost election/ballot initiative.