(CNN) – Mitt Romney took his Democratic rival to task Thursday, saying a remark from President Barack Obama's stump speech revealed a fundamental misunderstanding of the term "productivity."
President Barack Obama made the quip at a campaign event in Denver, where he was campaigning Wednesday after speaking at the commencement ceremony of the U.S. Air Force Academy.
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"There was a woman in Iowa who shared her story of financial struggles, and [Romney] gave her an answer right out of an economic textbook," Obama said Wednesday. "He said, 'Our productivity equals our income.' And the notion was that somehow the reason people can't pay their bills is because they're not working hard enough. If they got more productive, suddenly their incomes would go up."
Obama was referencing remarks Romney made in Iowa ahead of the state's GOP presidential caucuses. Speaking in Mason City in December, Romney was answering a question from a woman who had lost her job in Utah and moved to Iowa for work.
In his response, Romney extolled the hardworking nature of Americans while explaining how competition between states could lower costs and create jobs.
"What happens with competition is we find ways to do the same thing at lower cost, with better quality, and we can produce more and more things. The term is called 'productivity," Romney explained.
He continued, "America has the highest output per person in the world. We make more stuff and service per person than anywhere else in the world, and that's a good thing. Because, by the way, our productivity equals our income. If you don't make very much stuff, you don't get much income. We have the highest income per person in the world."
Obama, in his campaign speech, said that answer underscored Romney's detachment from hard working Americans.
"Those of us who've spent time in the real world know that the problem isn't that the American people aren't productive enough - you've been working harder than ever," Obama told the crowd in Denver.
In his interview Thursday, Romney said that quip revealed a fundamental misunderstanding of economics on the president's part.
"Well, I'm afraid he doesn't understand what the word productivity means," Romney said on "Fox and Friends." "Gosh, this is quite a revelation if you have the president of the United States that doesn't understand the productivity is a measure of output per person in the nation as a whole and is driven by such things as the level of automation in the society, the extent to which government encourages output and production."
Romney went on to assert that Americans worked harder than workers in other developed counties, including Germany and Japan.
"We're a hard working people," Romney said. "I'm amazed he doesn't understand what productivity means!"
Asked if he agreed with a statement conservative radio host Rush Limbaugh made yesterday that Obama is going to run a campaign against capitalism, Romney said he did.
"It certainly sounds like that's what he's doing," Romney said. "There's no question but that he's attacking capitalism, in part because I think he doesn't understand how the free economy works. He's never had job in the free economy – neither has Vice President Biden. They've spent their lives as either community organizers or member of the political class and frankly the American people understand that free economy and free enterprise is tough – it's hard work."
Romney went on to defend his time as a private equity executive, saying Democratic attacks on Bain Capital for bankrupting companies and laying off workers ignored the company's successes.
"If all the president wants to do is talk about the failures, why he's misrepresenting the nature of free enterprise," Romney said.
CNN's Rachel Streitfeld contributed to this report.