InReality It Would Have Been Fantasy, Delusion and Catastrophe
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
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
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. America
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
Still don’t believe Mr. Romney and his team were living on
. How about this. Fantasy
Romney aides wince at the comparison, but their 200-day plans sound like a Bain turn-around for
’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. America
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.