In 2012, the iconic Twinkie nearly went away for good. But in 2013, the snack made its triumphant return. The story of how that came to be illustrates a powerful, if poorly understood, force in the US economy—one that has created "some of the greatest fortunes of the modern era" for its major players, reports the New York Times. The subject of the story? Private equity firms. In this case of Twinkies, for example, the investment firms Apollo Global Management and Metropoulos & Company scooped up some of the bakeries and brands of the floundering Hostess for $186 million. A few years later, they made a fortune by selling the newer, smaller Hostess, whose value had risen to $2.3 billion. That underscores the pros and cons of such a deal: Yes, it saved Hostess, but the company came back a much leaner version of itself, going from 8,000 jobs to 1,200.
“People understand jobs going to China,” says one economics professor. “But no one has ever heard of these private equity firms that come in and do all this financial engineering. It is much more complicated and less visible.” One thing that is crystal clear: Private equity execs are by far the highest-paid executives in the land, earning an average of $211 million last year. At the top is Stephen Schwarzman of Blackstone, who took home a staggering $800 million thanks to byzantine payout structures. The story notes that Blackstone could be considered one of the nation's top 10 employers, with Schwarzman advising President-elect Donald Trump on how to create jobs. Click for the full piece, which notes that these firms help more than the super-rich: Firefighters and teachers also benefit via their pension funds. (Read more private equity stories.)