I’ve received some (understandable) pushback on yesterday’s article The Magic of Private Equity from folks with firsthand experience… Clearly, not every private equity project has evolved into a lasting great American enterprise… Depending on the source, you’ll find Bain’s (for example) success rate reported to be as high as 92% and as low as 50%… I suspect reality lies somewhere in between…

For the person who might still feel (success stories notwithstanding) that private equity firms have utterly no social utility, that they represent nothing more than the greedy rich getting richer, I’ve amended a couple paragraphs (in red below) from yesterday’s post to drive home an important point… Understand that if all private equity firms exist to turn their victims into anorexic, debt-ridden, entities, we have little to worry about going forward… For they’ll fail their ultimate objective (selling at a huge profit, after levering up the company) miserably… Make no mistake, the bankers who would fund those special dividends, and the would-be buyer (and the would-be buyer’s bank) will perform their due diligence (thoroughly) before making the private equity executive “obscenely” richer… If indeed the examples presented to me, and others I’ve (since yesterday) Googled are the rules rather than the exceptions, well then, again, we’ve nothing to worry about – the market will sooner-than-later purge itself of these abusers, I assure you…

Now here’s my warning to those of you who believe private equity firms exist only to make their partners mega-rich at the expense of businesses, their employees and the overall economy: Under no circumstances are you to ask Uncle Sam to fix it through regulation… Let the market handle it… For if politicians step in (alas, I understand they’re already building their case), well, let’s just say if you hate greed, you ain’t seen nuthin yet…

You see biggovernment is THE playground of greedy corporate executives… I.e., the more government influences industry the more incentive industry has to influence government – and make no mistake, it will… Regs will indeed be written, but their authors will leave nicely paved paths for their benefactors (campaign contributors, etc.) to stroll right through…

Uh-oh!! Now that I think about it, one politician has indeed been raking in the contributions from the private equity industry… In fact, at the rate of $35,800 a plate during a recent fund raiser hosted by none other than Tony James, the president of private equity firm Blackstone Group… Here’s an excerpt from last week’s Fortune article At Obama fundraiser, no one mentions private equity:

Obama raises money from private equity, hours after bashing the industry.

FORTUNE — At a Democratic Party fundraiser, I guess it’s inappropriate to mention the elephant in the room.

President Obama last night spent time at the Park Avenue apartment of Blackstone Group (BX) president Tony James, to press the Wall Street flesh and collect $35,800 per plate. It came just hours after his campaign launched its first formal attack on Mitt Romney’s record running Bain Capital — a private equity firm not terribly dissimilar from Blackstone. Talk about awkward! Click here for entire article…

As for whether Romney would accept a little assistance from private equity, given his background, there’s no need to go looking, it would make perfect sense…

Here are the amended paragraphs from yesterday’s article…

Step Six: If they do their job well, the company is