"Private-equity investment has exploded in the past 20 years for a lot of reasons, but one is the fraying of investor confidence" in the big public companies traded on stock exchanges, he told me.
Sure, "the public model still works for raising money and giving individuals the chance to buy into many companies," such as the Facebook share sale announced this week.
But more often, Greenberg said, the whole 20th-century idea of "shareholder democracy" - with "accountability enforced by research-analyst reports, public accounting firms, annual share- holder meetings, and proxy votes - just doesn't work anymore."
The stock market's been a loser since the dot.com blow-up more than a decade ago, despite (or partly because of?) government and securities-industry efforts to force publicly traded companies to behave better.
State and corporate pension funds, nonprofit foundations, and insurers - even labor unions that back Romney opponents - have moved billions out of public securities and into private-equity firms such as Romney's Bain Capital, because that's where they now expect to find profit.
Letting go
At what cost? "It isn't the job of private business investors to generate jobs," Greenberg said.
Investors may prefer not to have to cut people "when they take over a company. But their own job is to create value for their investors by creating more efficient, stable businesses," even when that means shutting facilities, combining offices, firing workers.
What about the "social contract," the idea that elected governments grant corporations and firms property rights and market protections precisely because the public expects them to create jobs, and help pay for public services?
