Sarcastically calling private equity firms "everything other than Mother Teresa," CNBC's Jim Cramer took PE firms to task on Friday. "I'm done taking heat by saying that private equity is not as good as real equity," argued Cramer. "There I said it. I'm a throwback."
Pointing to companies like Starbucks that create jobs, he said he wishes "private equity would start a lot of companies rather than just reinvent them."
Billionaire David Rubenstein, co-founder of PE-powerhouse The Carlyle Group, was listening on the "Squawk Box" set to Cramer's criticism and defended his industry. He also stood by his earlier statement that the venture capital "feeding frenzy" is good for America. Venture capital, which is a form of private equity, has started a lot of great companies, Rubenstein said.
(Read more: VC 'feeding frenzy' good for US: David Rubenstein)
"We create a lot money for our investors who are often public pension funds. So the industry doesn't need to be defended. ... It's done a very good job for people. It employees a lot of people," he argued, but admitted, "I wish we were better at getting our message across.
"Private equity is a great industry for the United States," Rubenstein concluded.
—By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.