The President Isn’t A CEO

Jan 17 2012 @ 11:00am

Last week, Josh Barro pointed out that "understanding how a private firm should interact with the economy is different from understanding how the government should interact with the economy": 

Romney is right to insist that it is not the job of business leaders to hold workers harmless—it is to make profits for shareholders. But while the human effects of these economic shifts are not properly the concern of business executives, they are the concern of government officials, and Romney wants to be president. The question he should be asked, then, is what policy implications arise from the economic shifts of the last few decades, driven (in small part) by private equity.

Does rising income inequality mean that fiscal policy should be more redistributive? Does a reduction in job security call for a stronger safety net? Do new workforce needs mean we need a shift in education and training policies? It’s worth noting that, as Governor of Massachusetts, Romney’s signature policy achievement was a universal health care program—that is, a safety net program that reduces the cost of job loss or income loss. 

Matt Steinglass is more focused on how out tax system encourages Bain-style takeovers:

[Maybe] private equity really is overwhelmingly creating new efficiencies and generating value in the economy, rather than exploiting a tax feature that delivers money to owners while depriving the government of revenue and making otherwise healthy firms more vulnerable to bankruptcy. But this is certainly a debate we should be having. Because for many people, it's clear that "capitalism" as represented by post-1980s Wall Street is a different beast than capitalism as represented by 1950s Detroit.