For private equity is not at core about creating value through innovation and investment. That would need private equity owners to take another risk (the results from innovation are uncertain) on top of the leverage risk, hardly the point of the deal. Instead, the overriding requirement is to fatten up the company so it can be resold on the public markets to deliver great capital profits, just as Obama says.

Bain Capital is part of the problem, not the solution. The private equity recipe has ripped the heart out of innovative US while leaving its banks encumbered by massive non-performing debts. The business model is now broken and the US has to start to ask questions about whether the Bain type of allegedly individualist capitalism really delivers growth and jobs. As the answer is: no, what does?

Obama has begun the counter-argument. Innovation is necessarily about taking risks and unless there are mechanisms to share them between the private and public sectors, the risks and innovation are necessarily not undertaken. "The internet didn't get invented on its own," Obama argued. "Government research created the internet so that all the companies could make money off the internet."