Andrew Milgram

If they do have professional management teams, oftentimes these are not management teams that went through the GE training program.

As a consequence, they're making intuition-based decisions or pattern recognition-based decisions.

They're not relying on what you and I might think of as data-driven decision-making.

I think market power.

So the middle market companies typically don't serve the end consumer.

They typically serve the larger public company.

So those larger public companies, which have pricing power with their customer, who tends to be the end consumer, also have pricing power over their supply chain.

So they're pushing costs.

They're pushing financing down onto those middle market companies while taking that margin.

It's like a corporate class system.

It is.

I mean, there's no other way to understand it in that the rich are getting richer and the poor are getting poorer.

Again, I go back to we see this expressing itself in the political sphere because people are looking for some kind of outlet, some sort of expression of this frustration because they feel it in their everyday lives and their businesses and how they go about work.

So these companies just have fewer resources.

They have less to stand on.

And so they have less bargaining power.

There's a few different ways this can resolve itself, but it probably will resolve itself with a bang in some way.

Now, that bang can be a long drawn out, something that looks like, say, the early 2000s, where we had just years of persistent restructuring across large portions of the economy.

It could also look like the late 80s, early 90s, where we had a real credit contraction as people dealt with over leverage from the direct lending crisis.

Some people call it the S&L crisis of the late 80s, early 90s.