My erstwhile co-blogger Josh Barro, a senior fellow at the Manhattan Institute, has an excellent new blog at Forbes. I highly recommend his post on “the discussion we should behaving about Bain“:

Returns to capital have risen relative to returns to labor. Downsized workers are likely to have to take pay cuts to find new work (or, in the current economic slump, may face long-term unemployment). Workers in certain fields hold human capital that has declined sharply in value.

Romney is right to insist that it is not the job of business leaders to hold these 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.

Romney is fond of saying that we need a president who has business experience and understands how the economy works. But understanding how a private firm should interact with the economy is different from understanding how the government should interact with the economy. Bain provides a useful case study to ask Romney to discuss the difference—if the candidates can take a break from cheap point-scoring.

Josh’s blog is already well worth reading.