As long as Team Obama is willing to misrepresent Mitt Romney’s private equity record, others have to be equally willing (at least) to tell the truth about it. Kudos to Jeremy Siegel for stepping up:
On balance, academic research shows that private equity produces stronger and more-resilient companies. Although the employment growth generated by private equity is generally not as strong as Romney claims, most firms sold by private equity have lower default rates, invest capital more efficiently and turn in a better operating performance than comparable firms. That’s partly because private-equity firms can negotiate lower borrowing costs, and the equity partners are able to share their expertise with the firm’s management.
To be sure, as Siegel points out, there can be problems with the private equity model, but the same can be said regarding just about any business model. The takeaway point, however, is that private equity is not the rapacious plunderer of business that Mitt Romney’s opponents like to claim it is. More media outlets need to point out this very basic truth, and shame the Obama campaign and its allies into halting their misrepresentations.