The ubiquity of private industry in our everyday lives is a relatively new phenomenon, one that’s largely occurred in the course of the past decade. During the credit bubble, the private equity model of debt financing grew to astronomical heights. By some estimates, the assets of private equity firms — the value of the companies they own plus cash ready to be deployed — is around $3 trillion.

In the accompanying video, I discuss the state of the industry with Jason Kelly, a Bloomberg reporter and author of The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything.

Thanks to Mitt Romney’s run for the White House, private equity has come under intense scrutiny. Kelly says the industry’s track record is much more complicated than is commonly portrayed.

“Romney made it very much about jobs,” but most private equity firms “never set out to be about jobs,” Kelly says. “Private equity guys say ‘we do sometimes [create jobs], sometimes we don’t. It’s not really what we set out to do.'”

What is clear is that when private equity firms get involved “it does tend to have an impact on workers,” he says. “Things are going to change if a private equity company buys the firm you work for. They don’t tend to do nothing.”

Sometimes that “something” means layoffs or even shutting companies down; but it can also mean expansion and more jobs created. Kelly says it’s “maddening” but there’s no definitive data on the industry’s track record when it comes to jobs. Many private equity firms don’t even keep track of the jobs created or lost by their investments, he notes.

In addition, he notes the industry’s biggest investors are public pensions and university endowments, meaning private equity is not (just) the playground of super-wealthy individuals. So while many individuals, including Mitt Romney, have amassed incredible wealth (and sheltered income from taxes), the public sector has also benefited from the growth of private equity.

“To call [private equity] a tax shelter for the wealthy is insufficient,” he says. “The scope of the industry makes it a lot more than that. “

Given the industry’s sheer size — Kelly calls it “ginormity” — and now public status of Blackstone and Carlyle Group, private equity is a “fundamentally different business vs. when Mitt Romney was running Bain. Going forward, he expects industry returns to trend down while taxes are likely to go up. Perhaps in anticipation of such trends, today’s biggest private equity firms are increasingly diversifying into other areas like real estate.

In other words, chasing returns and going were capital is treated best — just as it’s always done.