Smith Faculty Opinion Article

By Dr. Peter Morici, Professor of International Business E-MAIL WEB SITE

April 4, 2012

Giving Mitt Romney the Long Look

With the Republican nomination virtually cinched, Mitt Romney must convince Americans he can more effectively moderate their cultural wars than President Obama, and get the economy going on all cylinders again.

Conservatives and liberals have rhetorically impaled him for excessive flexibility on health care and social issues.

Mr. Romney is an adult, and too much of the national debate is led by over aged adolescents who cast the world in black and white—tenured academics supported by taxpayer dollars and endowments, and pundits often catering to ideologically narrow audiences. They embrace unbending views of a perfect America, but none have to win votes and govern for ordinary folk making moral choices and earning a living in much tougher environments.

Fundamentally, he is a center-right politician, but as Governor of Massachusetts he worked with a very liberal legislature to fashion policies for health care and other hot button issues.

As president, he would do what editorial writers at the New York Times and the Manchester Union Leader are hardly compelled to do: compromise to get something done. However, the Congress would be more moderate than the Massachusetts legislature.

Americans can expect center-right solutions, in tune with the majority of voter sensibilities, and Supreme Court appointees like Justices Kennedy and Roberts, who actually listen to the arguments and weigh the facts in major constitutional cases, as opposed to reliably voting the liberal line as do Clinton and Obama appointees.

As an economist, it is clear to me that Mitt Romney deserves a long hard look from working Americans who want a better shot at good jobs and opportunities for their children.

Campaigning in 2008, Barack Obama promised to get Americans working again by getting tough with China’s export subsidies but as president, he has blocked action against its most lethal weapon—currency manipulation.

The trade deficit with China is slicing $500 billion off U.S. GDP and costing five million jobs, and Mr. Romney promises to go where Mr. Obama fears to tread.

Candidate Obama chastised President Bush for permitting gasoline to reach $4 a gallon, but as president he says there is nothing he can do. He has continued bans on drilling in the eastern half of the Gulf, off the Atlantic and Pacific coasts, and the richest fields in Alaska, and threw up onerous regulatory barriers where drilling is still legal. Mr. Romney promises to unleash this potential, which could halve oil imports and increase GDP by another $250 billion and create 2.5 million jobs.

On the budget deficit, Mr. Obama’s Millionaires Tax may be good politics, but it would hardly dent the $1.3 trillion budget deficit. That requires taming runaway Medicare and Medicaid costs, but ObamaCare merely throws more federal dollars at a broken system, and compels private employers to buy more overpriced insurance—its cost controls will be easily gamed by private providers and prove just an additional expense.

Republican solutions, crafted by Congressman Paul Ryan, would give the elderly vouchers to purchase private insurance and block grants to the states to limit federal commitments. Those would only shift burdens rather than solving the fundamental problem—health care is too expensive in America.

Thanks to ineffective rationing—all systems ration health care and every other economic good—and higher costs for everything from ambulance services to administration, Americans pay about $8000 per person for health care, while the Germans and Dutch, also with private insurance systems, pay only $4000.

Voters should require Mr. Romney to explain how he will improve on Mr. Ryan’s solutions before donning an “I’m for Mitt” button.

Mr. Obama’s financial reforms have instigated the concentration of a record 60 percent of all saving and checking deposits among a handful of Wall Street banks. Those aren’t writing enough loans to finance new homes and small businesses, greatly handicapping those historically powerful engines of jobs creation.

Mr. Romney’s deep financial experience much better qualifies him to tame Wall Street—but he has told us little about what he will do other than reform Mr. Obama’s reforms.

The contrast with President Obama should require Americans to give Mr. Romney a good look, but he owes us more specifics on many tough issues if he is to deserve the top job.

Peter Morici is a professor at the University of Maryland School of Business and former Chief Economist at the U.S. International Trade Commission.