What Toys 'R' Us Can Teach Us About the Republican Party's Dismantling of the Federal Government

Ann Marie Reinhart worked at Toys 'R' Us for 29 years. She got $60 when it died. The lawyers got $56 million.

"I helped build that brand, all the weekends and holidays, and we're rewarded with nothing," said Reinhart, who rose from HR manager to store supervisor over three decades. After losing her job, she faced a choice no one should make: buy her husband's $100 diabetes medication or her own $250 inhaler. She chose his.

This is the story of how Wall Street destroyed America's biggest toy store. It's also a preview of what's happening to our government right now.

Wall Street extracted $470 million from Toys 'R' Us. The workers got $2 million total. That's $60 each for 33,000 people who lost their jobs.

Meet the men who got rich destroying it. Henry Kravis of KKR is worth $13.8 billion. He extracted millions from Toys 'R' Us while it collapsed. His firm pioneered the leveraged buyout that killed the company. Today he lives in mansions in New York, Paris, and the Hamptons. He donated $100 million to Columbia Business School and they named a building after him.

Josh Bekenstein of Bain Capital is worth over $1 billion. As co-chairman, he personally oversaw Toys 'R' Us's destruction. While the company was dying, he asked CEO Dave Brandon to help him with other deals. When asked if he ever assessed whether the company could survive the bankruptcy plan, Bekenstein answered with a simple "No." Today he still runs Bain Capital.

George Roberts, who co-founded KKR with his cousin Kravis, is worth $12.2 billion. He collected fees from Toys 'R' Us until the very end. He lives in multiple California mansions worth over $100 million. All three men are still running their firms. Still destroying companies. Still getting richer.

Here's the contract that says everything. The private equity firms' agreement with Toys 'R' Us stated they would collect millions in fees "regardless of whether or not the Company requests an Advisor to provide any such services." Read that again. They got paid whether they helped or not. The contract also said "no minimum number of hours is required" for their $185 million in "advisory fees." This wasn't business. It was legal theft.

In 2005, three Wall Street firms bought Toys 'R' Us for $6.6 billion. But they only used $1.6 billion of their own money. They forced Toys 'R' Us to borrow the other $5 billion to pay for its own purchase. Think about that. It's like someone buying your house, then making you pay the mortgage while they collect rent.

The company's debt jumped from $2.3 billion to $7.6 billion overnight. Every year, Toys 'R' Us had to pay $400-450 million just in interest. That's twice what the company could actually afford. While drowning the company in debt, the Wall Street firms paid themselves $185 million in "advisory fees" for advice nobody asked for, $128 million in "transaction fees," and $81 million just for arranging the debt that would kill the company. From 2014 to 2017 alone, while stores were failing, they took another $17.9 million. That's more money than the first five Marvel movies made combined.

Sandra Lopez worked her way up from part-time to manager over 22 years as a single mother. She missed countless family events for the company. "Please," she begged California's pension board, "make sure you're not investing in companies that are all about corporate greed instead of workers' needs."

Sarah Woodhams was in the hospital delivering her stillborn son when the company announced it was closing. She needed the severance to pay her $1,700 ambulance bill. She got nothing. She had to start a GoFundMe to pay for her son's memorial.

Michelle Perez, a single mom with two kids, worked there four years. About her $60 check: "That'll pay my phone bill."

Giovanna De La Rosa watched the destruction from inside. Right after the buyout, "they started making all kinds of cuts that weren't needed." Birthday gifts canceled. Holiday parties gone. Stores got dirty. Computers broke. Seventy percent of workers became part-time at minimum wage.

Meanwhile, executives paid themselves bonuses as the ship sank. CEO Dave Brandon made $12.5 million a year while losing money for five straight years. Executives gave themselves $8 million in "retention bonuses" days before bankruptcy, then another $16 million in "performance bonuses" while firing everyone. Brandon alone allegedly paid himself $2.8 million right before filing bankruptcy.

The same people are now destroying our government. Glenn Youngkin spent 25 years at Carlyle Group destroying companies. He made $300 million. Now he's Governor of Virginia. Wilbur Ross, the "King of Bankruptcy," made $2.9 billion destroying companies. Trump made him Commerce Secretary. Rick Scott owns $68.2 million in private equity investments. He's now a U.S. Senator making laws that help private equity. Pat Toomey protected private equity's tax loopholes for years as Senator. The day he retired, Apollo hired him for $750,000. The revolving door is spinning so fast it could power a small city.

They're using the exact same playbook on America. Look at what happens when private companies take over public services. Private water companies charge 59% more than public systems. In Pittsburgh, they let lead poison kids to save money. The mayor explained: "They actually paid them more for cutting costs. So where do you save money? You lay off people."

Texas privatized its power grid. In 2021, it failed. Two hundred forty people died. The disaster cost $195 billion. But companies kept prices at $9,000 per megawatt-hour, 180 times normal. People got bills up to $16,752 for one week.

Private prison companies get $2.4 billion of our tax money yearly. They pay immigrant detainees $1 a day to clean. Their contracts require 80-100% occupancy. Yes, they have government contracts requiring that the government keep their facility filled.

Since 2001, military contractors have wasted or stolen $31-60 billion of our money. That's $12 million every single day for two decades. Blackwater billed us for prostitute parties, then they changed their name and got their contracts back.

Medicare Advantage companies steal $43-75 billion every year in fake charges. They've taken $592 billion since 2007. Meanwhile, they deny more care every year. United Healthcare doubled their rejection rate.

Then there’s that 900-page plan called Project 2025. The Heritage Foundation spent $22 million writing it. It explains exactly how to destroy the federal government and sell it for parts. Fire 500,000 federal workers. Replace them with political loyalists. Privatize Social Security. Hand Medicare to insurance companies. Sell off national parks. Eliminate weather forecasting. Turn the VA into vouchers. This isn't a conspiracy theory. You can read it yourself. It's public.

Private equity firms are only 6.5% of our economy. But they caused 56% of the biggest bankruptcies in 2024. They caused 65,850 layoffs last year alone. They destroyed 1.3 million retail jobs in the last decade. They destroy eight jobs for every one they create.

Meanwhile, the private equity tax loophole costs us $12-18 billion every year. That's enough to give every teacher in America a $4,000 raise. Or fix the pipes in Flint 1,000 times over. Or fund free school lunch for every kid for three years.

The most insane part? Your pension is probably invested in these firms. Public workers' retirement money goes to private equity. Private equity then destroys public sector jobs. Florida's governor moved $1 billion of state worker pensions to PE firms. Those firms donated millions back to his campaign. The workers lost $10 billion.

While you read this, private equity is buying nursing homes that are 60% more likely to kill patients. They're buying hospitals and closing emergency rooms across America. They're buying trailer parks and doubling rent on fixed-income seniors. They're buying newspapers and firing all the journalists. They're buying veterinary clinics and now your dog's surgery costs three times more. Seven percent of all American workers now work for private equity companies. Your doctor, your kid's teacher, your local news, your water system, they're all being bought.

Federal prosecutor Brendan Ballou wrote: "Private equity surrounds you. When you visit a doctor or pay a student loan, buy life insurance or rent an apartment, pump gas or fill a prescription, you may be supporting a private equity firm." But he also said this: "To believe that our condition is inevitable is exactly what the most privileged among us want you to believe."

Toys 'R' Us didn't fail. It was murdered. The company would have been fine without the debt. It still had 20% of the toy market when it died.

Congressman Bill Pascrell called it "a sin." Senator Bob Menendez said the company was "run into the ground by corporate raiders." Alexandria Ocasio-Cortez said private equity has "destroyed jobs and eroded people's quality of life." Even Mitt Romney, who founded Bain Capital, admitted: "Sometimes the investors make money but the companies fail."

What can you do right now? Call your pension administrator and ask what percentage is invested in private equity. Demand they divest if they do. Call your Senator at (202) 224-3121. Tell them to close the carried interest loophole and oppose Project 2025. Google your company name with "private equity owner." If they're PE-owned, start looking for a new job. Support the Private Equity Stakeholder Project, Americans for Financial Reform, and United for Respect. The same vultures who destroyed our favorite toy store are now in charge of our government.

The question isn't whether they'll try to destroy our government like they destroyed Toys 'R' Us. They're already doing it. The question is: Will we stop them?