Friday, August 26, 2011

Mitt Romney’s Credibility Problem with the Business Community – The Problem: He Doesn’t Have Any

Gee Wonder Why That Is?

Earlier this month, despite the opposition by the major Republican Presidential candidates including Mitt Romney the debt ceiling/deficit reduction package was passed by a bi-partisan vote in the Congress and signed into law by President Obama.  The legislation prevented a U. S. default on its debt, and while no one knows exactly what that would have meant, it would probably not have been a good thing.

In fact, as the Financial Times has noted, even the prospect of a default was upsetting to the business community.

The business community, and particularly Wall Street banks, may have been spooked this summer by how close the US veered to a default in large part because of the intransigence of Republicans in the House of Representatives, who have said they are intent on shrinking the size of government above any other priority.

So has this cooled the romance between Wall Street and the Republicans.  Of course not.

there is little evidence to suggest that the debacle is causing business to hold back their support for the Grand Old Party or any of the slate of Republican contenders who are tripping over themselves in a rush to appease the most radical elements of their par

Why not, well the Republicans, headed by the perennial flip flopper Mitt Romney simply are not believed.

Take Two of These for Romneyitis
and Call the Doctor in the Morning

the pro-Republican business community knows that the candidates have to bluff in order to gain headway in the gruelling nomination contest and that comments that seem radical, including Mr Romney’s apparent willingness to allow the nation to default, are taken with a grain of salt.

Translation:  We know you are lying Mr. Romney in order to get the nomination.  We trust you will come back to sanity if you are elected.

Why exactly the business community would want to support someone whose verbal integrity is so lacking was not explained.

The interesting thing is how naive the business community is.  They do not understand that many, maybe a large majority of Republicans believe the anti-government rethoric they are spouting.  If Mr. Romney or Mr. Perry takes office, they may want to reverse their positions to more reasonable ones, but they will have lost control of the Congress.

If a Republican is elected, at first the removal of government regulations will spur the economy, and give the false aurora of success.  But over time the economy will degenerate to what Mark Twain termed "the gilded age". 

The lesson that was learned in the late 19th and early 20th centuries is that unregulated capitalism is one of the worst, most destructive social-political-economic systems every invented, but that regulated capitalism is the best.  Business, along with many voters may have to learn this lesson all over again.

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