Why Private Equity Is Profitable

Mitt Romney recently attacked Newt Gingrich for working as a lobbyist in Washington. The public being naturally suspicious of politicians who make money off of public service, Gingrich must offer slippery explanations of his lobbying income. Rick Santorum has the same problem.

Romney seems to stand apart, having made his $250 million fortune in the private sector. But Americans sense that his fortune is unlike those of Henry Ford and Steve Jobs, visionaries who created something from nothing. Corporate raiders may deserve remuneration for reallocating resources to their best use — but hundreds of millions? It is the scale that grates, and correctly so, for it was not value creation but government policy that made the industry so lucrative.

Keep reading this post . . .