Romney fallout? Public turns on private equity

Mar 13, 2012

Private equity has a bad reputation.

Bloomberg today is out with a new poll that shows most Americans have a dim view of private equity, with 52% saying that private equity practices are "mostly bad" for the economy. Another 27% took the other side, while 21% had no opinion.

Beyond that, however, it's a bit difficult to draw conclusions.

My gut reaction is to say that the 52% figure is related to Mitt Romney's presidential campaign, and attacks on his business background by GOP rivals like Newt Gingrich. The only problem is that Bloomberg has never asked such questions in the past, so we do not have a pre-Romney control poll against which we can compare.

Likewise, it also would seem that the negative sentiment is primarily among Democrats and independents, as a separate question to self-identified Republicans found that 64% believe that Romney's private equity experience makes him better prepared than other GOP candidates to create jobs. Unfortunately, that language limiting the comparison to Romney's rivals does not let us know how many respondents believe Romney's resume makes him better-prepared than President Obama to create jobs, or better-prepared than any other businessman or better-prepared than any other private equity executive. In other words, is "private equity" the determining factor, or Romney's specific track record?

Bloomberg's final private equity question was about the tax treatment of carried interest, with 68% saying that the current system is "unreasonable." Only 17% called it "reasonable," while the remaining 15% were unsure. This one is fairly straight-forward from a policy perspective, although I'm sure that PE advocates will bristle a bit at hedge fund managers also being included in the question language.

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