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Republican presidential candidate Jon Huntsman formally exited the race Monday, leaving just five candidates to battle for the nomination. Mitt Romney leads the pack and a new poll shows the GOP front-running with a double-digit edge in South Carolina, which holds its primary in five days.
The attacks against Romney's tenure at private equity firm Bain Capital continue to dominate the GOP debates. Even satirist Stephen Colbert took a swing against Romney, running a television ad in South Carolina over the weekend that was paid for by Colbert's "Definitely Not Coordinating With Stephen Colbert Super PAC" Super PAC. Paul Krugman points out in a recent New York Times editorial that Romney's job creation record remains murky, and notes that Romney's campaign has not released documents proving the former CEO at Bain created 100,000 jobs, as claimed.
As Romney defends himself against allegations that he's a "jobs killing vulture capitalist," the whole concept of capitalism has come under greater scrutiny, and many financial insiders are expressing concerns about the economic model.
"America worships the idea of capitalism but there have been many fundamental paradoxes and contradictions in terms of how it's actually practiced," says Gillian Tett, U.S. managing editor of The Financial Times. The 2008 crisis "has forced us to rethink a lot of our assumptions, not just about Wall Street but much more broadly about how we run the economies."
The Financial Times just launched a series of editorials written by leading experts called "Capitalism in Crisis," that aims to broaden the debate. Contributors such as Larry Summers, Vikram Pandit, Mahathir Mohamed and Alan Greenspan raise important questions about capitalism's connection to rising income inequality and its place in a world where Asian economies are booming and Western economies are flailing, especially in Europe. (See: Europe's Debt Crisis Is Going to End Soon...For Better or Worse, FT's Tett Says )
The Occupy Wall Street movement may have brought the issue of income inequality to the nation's attention, but Republicans and conservatives have embraced it and GOP presidential contenders increasingly sound like liberals in their denunciations of Wall Street and globalization.
Tett says apprehension over income inequality exists in Europe, but not to the degree it does in the U.S. She gives the example of Germany, Europe's dominant economy. The country's unemployment rate fell to its lowest level since 1991 in December and its export market rivals China's, which has a population of 1.3 billion vs. Germany's 82 million. What separates Germany from its European counterparts is not its affinity for austerity but the close partnership between the public and private sectors. German workers are appointed to German corporate boards and government funded research institutes help fuel innovation.
In his "Capitalism in Crisis" commentary, Larry Summers writes that the capitalistic part of society, such as the trade goods sector, has experienced the greatest jobs loss while the U.S. healthcare industry has grown, partly because of government support and intervention.
Income inequality will not go away after the November election and debates on the merits of capitalism will continue to linger in the national narrative. Tett says Americans may have to address wealth distribution as a means of improving the economy, a concept widely ridiculed conservatives.
"Many people support the American dream in terms of meritocracy..if there's a feeling that everyone can buy into it," Tett tells Aaron and Henry. But "what's happened to Wall Street in the past decade has really left people questioning whether it is a meritocracy."
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