How Is A Private Equity Firm Like A Bank, And What Does That Have To Do With Romney?

Since Mitt Romney may become our next president, and because he made his fortune in private equity, a lot of people want to learn more about the private equity business. This article succinctly describes the basic elements of the business. Private equity firms can add value, or they can subtract value. A description of each outcome is provided. Consequently, it is only possible to understand whether Romney's firm added or subtracted value by looking at the details of each deal that it made. There is nothing inherently good or bad about making a fortune in private equity. Therefore, we should evaluate Romney as a presidential candidate based upon his current political positions, but also by the fact that he changed most of the positions that he held as the effective Governor of Massachusetts to those more acceptable to the current GOP base. That basically describes my reaction to Romney as well. He lacks personal integrity, and if he is elected, he will be constrained to appease a GOP base that has been transformed into the most politically reactionary element in America. His connection with a private equity firm, and the fortune that he made, is less relevant to the issue of how he would govern.