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Private equity: Choose your own adventure

May 23, 2012: 12:24 PM ET

What is the average American to think of private equity?

The industry, which used to never get mentioned in the pages of political rags or on talk shows, is well on its way to becoming a campaign touchstone.

Just this week, President Obama declared private equity a legitimate campaign target. His campaign released a two minute ad focused on Bain Capital's takeover of Kansas City-based GST Steel. Vice President Joe Biden added that working in private equity "no more qualifies you to be president than being a plumber." Bain, of course, is the firm that was once led by Republican presidential contender Mitt Romney.

For the uninitiated, the emphasis on private equity is bound to spark confusion. Private equity deals are complicated, and the results difficult to quantify. The discussion thus far has been lacking proper context, to say the least.

Just take a look at the Obama ad below, and then watch the second video, which is from the Private Equity Growth Capital Council, an industry group.

Both videos feature comments from employees of companies involved in private equity deals. In one, a private equity company is described as "a vampire" that "came in and sucked the life out of us." In the other, the industry is called "the last bastion of hope" for a struggling firm.

Rorschach test, anyone?

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