Newspaper article The Christian Science Monitor
After New Hampshire Primary: Will Voters 'Fire' Romney?
Mitt Romney's comment on firing people only helps open a debate about 'traditional' economics. Even economists are torn - after being humbled by the Great Recession. Can politics fill the void?
Does Mitt Romney really enjoy "firing people"?
Probably not if he doesn't need to. Few people would relish hurting others. Still, his poor choice of words during the New Hampshire GOP primary was insensitive, especially at a time of high unemployment.
In context, however, the former venture capitalist was stating a basic point of standard economics: People must have the freedom to drop a service, such as health insurance, if it doesn't measure up. Personal choices drive markets, either up or down. Layoffs are often necessary. An economy can't remain static.
Not so fast, say Mr. Romney's opponents, including a few Republican presidential candidates. Closing a company and laying off its workers while also making a profit from the transaction is unethical, they say.
"If somebody comes in, takes all the money out of your company, and then leaves you bankrupt while they go off with millions, that's not traditional capitalism," Newt Gingrich said.
Romney's former private-equity firm, Bain Capital, is indeed a master at investing in companies, even if nearly a quarter of the firms during Romney's time there filed for bankruptcy or closed their doors, according to a Wall Street Journal probe. Overall, Bain ended up creating jobs by pushing efficiency and results, claims both the company and Romney.
The 2012 presidential race may hinge on which candidate is viewed as the best "job creator." But even economists are divided over how to nurture a sluggish economy back to health and what is "traditional" capitalism.
Economists were humbled after the 2008 financial crash. Their mathematical models for assessing risk only pushed financial firms to make false assumptions - especially about the value of home mortgages. Few economists predicted the Wall Street meltdown and the Great Recession.
The "dismal science" is focused mainly on the study of markets, although many economists also offer policy advice. This week, the profession offered up its first ethical code, calling on members whose articles are published by the American Economic Association to disclose potential conflicts of interest. …