What does the closure of a longtime manufacturing company in northern Minnesota have in common with the hapless Boston Red Sox? According to critics, private equity management ruined both, and their communities paid the price. The political reckoning may affect this year’s midterm elections.

Minnesota Twist Drill in Chisholm and Hibbing, Minn., announced its impending closure in April. By summer’s end, 77 workers will lose jobs in towns already rocked by recent mining layoffs.

At the time, company officials blamed rising tariffs on the imported Chinese steel blanks used to make drill bits, along with Canadian tariffs implemented in retaliation for U.S. tariffs. That is certainly an immediate factor, but the decision to convert to cheaper imported steel occurred five years ago as a cost-cutting measure by a new private equity owner.

“These are hardworking folks who are losing jobs because of the decisions of these large firms that are not in the state,” said Matt Parr, communications director for the Private Equity Stakeholder Project, a nonprofit watchdog organization. “(These companies are) making decisions for their financial books and their profits that have very direct effects on working Americans.”

Meantime, over Memorial Day weekend our mediocre Minnesota Twins scored their first Fenway Park sweep of the Boston Red Sox since 1994. During one of the local broadcasts, the Red Sox cable network pulled a campaign ad placed by Graham Platner, a Democratic U.S. Senate candidate in Maine. In the ad, Platner blamed private equity for destroying not only the American economy, but also the Boston Red Sox.

Apparently, losing to the Twins might be such a shocking experience for New Englanders that it could flip control of the U.S. Senate.

Platner, a controversial oysterman and former U.S. Marine, did not become a presumptive nominee because of temperate partisan platitudes. Rather, he represents a growing populist sentiment. Despite a full bag of offensive social media posts and a drunken Nazi tattoo, since covered up, Platner leads moderate Republican U.S. Sen. Susan Collins in recent polls.

Parr said there’s a growing awareness by the public that the lack of affordability in their local economy can be traced to private equity firms.

“They’re getting pushed out of being able to afford a house, their health care bills are going up, their electricity rates are going up, but I think more people are realizing that it’s these large Wall Street firms that could be the cause of their angst,” said Parr. “So, I wouldn’t be surprised if both parties try to use that this year to capitalize on some of the angst that we’re seeing with people in the current economy.”

So just what is private equity and how might it affect the 2026 midterms?

If I ran a tire shop to serve customers in my community while making a living for myself and my employees, I’d be an entrepreneur. Communities across the state need more people like that. But if I bought 100 existing tire shops with the goal of cutting their costs and keeping their profits, I’d be private equity.

Private equity firms often borrow money to expand, using high profit expectations to pay their original investors before repaying the debt. This can lead to diminished capital improvements, fewer jobs, lower-quality products and bankruptcies.

“They’re profiting while the company itself could have financial and operating problems because of the high levels of debt placed on it,” said Parr. “Sometimes bankruptcy is almost baked into the initial business model when they make their acquisition.”

These kinds of practices have grown so common that they’re reordering whole industries, from manufacturing and retail to health care and housing.

Parr said the Private Equity Stakeholders Project released a recent report showing 1 in 8 American apartment dwellers live in a unit owned by private equity. Private equity firms are buying up single-family homes as well, which drives up both prices and rents. President Donald Trump signed an executive order discouraging the practice, but it keeps happening. Even when private equity doesn’t buy your dream home or apartment, it ratchets up the market so you can’t afford it.

In 2025, the world’s largest private equity firm, BlackRock, made Minnesota history by creating an ownership group to acquire Allete, which owns Minnesota Power. The proposal drew enormous public backlash from ratepayers and large industrial concerns like mines and mills. Nevertheless, enough stakeholders assured the Public Utilities Commission that nothing bad would happen, and the deal went through.

But private equity’s involvement in public utilities is closely tied to the growth of controversial data centers to power artificial intelligence and other computing functions of the modern economy. Controlling energy means reducing costs and increasing profit in a much larger context.

Parr said that private equity firms promise investors far higher returns than the current profit rates of a utility like Minnesota Power. This means that rate increases or the expansion of consumption are the only ways companies will achieve their goals. What that does to everyone else is a secondary concern, except at the ballot box.

“I do think there’s a growing awareness among the public and a growing willingness for people who have subscribed to either major political party to do something about this,” said Parr. “But at least on the federal level, especially, there’s just a disconnect there and not a lot of willingness to really regulate the industry.”

The growth of private equity into more aspects of American life could be the most potent issue of the upcoming election, one directly tied to our current affordability crisis. Nevertheless, only outsiders in the Republican and Democratic parties appear willing to address the way private equity affects affordability.

In this climate, political insiders tempted toward the status quo may soon find themselves out of doors. Preserving an order that makes chaos in the economic lives of working Americans is no order at all.

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