A recent column about Buffets confirmed some people's worst perceptions of private equity. "Vulture capitalists" was a common refrain in the comments and emails that poured in following the column's appearance.

So, here's a counter-take on private equity that goes 180 degrees in the other direction. In this world, private equity is a purifying agent that makes the American economy stronger. To justify that position, author Reihan Salam trots out the sainted Steve Jobs:

And yet when Jobs returned to Apple in 1997, he returned as an angel of destruction. He fired over 3,000 employees, a move that helped swing Apple from a $1.05 billion annual loss to a $309 million profit. He shut down Apple’s manufacturing facilities and outsourced almost every aspect of production. He swung the axe pitilessly, since he was convinced that survival requires leanness. And in the 14 years after Jobs returned, employment levels at Apple soared. Apple’s manufacturing work force was eventually replaced by engineers, support staff, and — in a move that would have surprised many in 1997 — a vast army of retail employees. The destruction was a prerequisite for the creation, and for the transformation of a wounded technology firm into one of the world’s most valuable public companies.

Here's the problem with that analogy: Jobs was in it for the long run. He didn't take a salary, just stock options. He didn't pay himself a series of special dividends that drained the company of cash even as he piled on debt, payments that either caused or hastened his company's insolvency.

That was a central allegation in the lawsuit that Buffets' bankruptcy trustee's filed against Caxton-Isema. It's probably the reason why the firm agreed to cough up almost $23 million to settle the case.

I don't think anyone begrudges an investor who takes a risk on a failing company, fixes it and flips it for a huge profit. And there are many private equity firms, local and national, that operate this way.

But we've seen other examples like Buffets, where a private equity firm walks away with big profits after mismanaging a healthy firm, or a private equity firm reaps big profits even as it fails to fix around a firm that it bought.

Venture capitalists lose money when they invest in startups that fail. Private equity investors have figured out ways to make money whether or not a company fails.