Is private equity crony capitalism with tax breaks instead of kickbacks?

I’m tempted to put David Waldman’s post on yesterday’s Daily Kos up for the Onion Award for headlines that say it all:

“Mitt Romney is a ‘businessman’ like the Hamburglar is a rancher.”

Another line in the piece is almost as good: “[F]orget running government like a business. Romney doesn’t even really know how to run a business like a business.”

But reducing the post to the quips would be a shame. For one thing, it contains some good analysis (as well as some language whose absence would have made the post stronger). For another, it contains a link to this neat little video by Robert Reich:

This video seems particularly compelling because of what it doesn’t assume: that the companies bought by private-equity firms always go bust. Some survive and some even prosper: we know that. But the point is that the whole enterprise is only profitable, on average, because the investors are gaming the tax code (deducting interest payments for debts unrelated to investment, counting what’s effectively ordinary income, not based on profits from an equity stake, as capital gains) and socializing costs through the unemployment system—and, Reich might have added, the pension insurance system, and soon the health-care subsidies built into the Affordable Care Act.  (Without the ACA, laid-off workers would either become poor enough to qualify for Medicaid, or have no insurance at all. That’s a cost too.)

I can’t think of a good rebuttal. Any takers? Or has private equity been a form of crony capitalism all along, without anybody having the guts to come out and say so?