The political gods
spared, or at least postponed America ’s tragic meeting of
Republican governance and economic reality (see what's going on in North Carolina if there are any doubts about the disaster of Republican rule.).
But in a recent issue of the great British news mag, The Economist,
their American columnist Lexington
speculates (with help from the Romney transition team) what might have
happened had Mr. Romney prevailed last November. The writing is a mixture of falsehoods and
delusions.
For example, there
is this.
Michael Leavitt, the former Utah governor who chaired Mr
Romney’s transition team, describes plans to deliver a “jolt of confidence” by
showing seriousness in a few big areas. He would simplify America ’s
spaghetti-spill of a tax code. He would grapple with the deficit; expand
domestic energy production; and reduce the role of government in health care by
hollowing out “Obamacare” reforms. Success was to be measured by bosses
releasing cash they were hoarding when Mr Obama was president, and rushing to
join a Romney-led American revival.
Much of that wishful thinking revolves around what
Paul Krugman derisively and correctly dubbed the “Confidence Fairy”, that
business investment would be stimulated not by increased demand for goods and
services but by ‘confidence’ in the national goavernance.
Here how this might be accomplished, according to the
fabulists of a would be Romney administration.
Team Romney’s 200-day plans included immediate, 5% cuts to public
spending excluding security and social payments (though more money for defence),
a weakening of the rules that Republicans say favour trade unions, a squeeze on
public-sector jobs and pay, and a global push for free trade. Mr Romney would
also have proposed lower income- and corporate-tax rates, offset by closing
loopholes. Abolishing the Environmental Protection Agency, a conservative
dream, was not on the cards. But “personnel is policy”, notes Glenn Hubbard, Mr
Romney’s chief economic adviser. Those chosen to regulate energy and tackle
climate change would have weighed costs against benefits minutely. A long-term
squeeze on welfare and health spending was a priority: wholesale immigration
reform was not.
Okay, let’ see.
Cutting domestic spending by 5% would result in massive harm to
millions of people and retard rather than stimulate growth. Changing rules on labor unions is
useless. Labor unions have not been a factor
in the economy for decades, their risk to the economy exists only in the minds
of people like Mitt Romney whose collective consciousness resides in the 1950’s
and 1960’s. Lower and flatter tax rates
would have reversed the reduction in the budget deficit now being achieved by
the Obama administration. How that would
stimulate a Confidence Fairy is unknown because it would not. Lower spending on welfare and health care
would have accelerated the division of America into two groups, a small
one with massive wealth and a large one living lives of quiet economic
desperation.
Still don’t believe Mr. Romney and his team were
living on Fantasy
Island . How about this.
Romney aides wince at the comparison, but their 200-day plans
sound like a Bain turn-around for America ’s economy: a co-ordinated
series of shocks aimed at impressing investors, but likely to startle and anger
many ordinary folk. Democrats would have scorned it as a wish-list for bosses
and billionaires. But Mr Romney believed his reforms would work, and work fast.
Benefits would follow swiftly, in the form of private investment and job
creation: persuading the wider public to trust in President Romney’s
competence, if not to love him.
In truth the Romney plan has already been tried in Britain and Europe . It has been an umitigated disaster. Britain, France, Italy, Greece, Spain,
Portugal etc all provide evidence that cutting government spending and
believing in the Confidence Fairy results in stagnant economies at best, and
massive unemployment at worse.
That is the future that a Romney administration would
have brought, and that is a future that has been hopefully eliminated but
probably just postponed.