Romney’s Right Agenda
by Donald Devine
Issue 209 – August 15, 2012
Republicans are thrilled that the Mitt Romney campaign has found its voice – and everyone agrees that President Barack Obama has no one to blame but himself.
President Obama’s campaign against “wealthy, successful Americans” who “attribute their wealth and success to their own intelligence and hard work” has backfired with a vengeance. “If you have a business you didn’t build that. Somebody else made that happen.” His intent was clear. The whole idea of hard work, risk-taking, ingenuity, entrepreneurship and success is secondary to government. Obama’s American Dream was not limited government, individual effort and responsibility but big government.
While Mr. Obama hit a hasty retreat claiming he was taken out of context, supported by an outrageously protective media, his record belies the lame excuse. Obamacare socialized one-sixth of the economy by placing it under microscopic government regulation and restrictions. His highest-ever $800 billion stimulus plan was directed mostly to government-favored firms or to government itself. He promised 4 million “sustainable” new jobs from it while the best estimate is that only 57,000 temporary jobs were delivered, at the cost of millions of dollars each. His investment policy was into “green” technology firms such as Solyndra, Abound Solar, Beacon Power, Fisker Automotive electric cars, and 28 others, none of which produced many jobs or are very profitable while most simply went bankrupt.
On Romney’s side of the equation, the former Bain Capital founder was more successful capitalizing one firm, Staples, with 91,000 employees, more than everything in the Obama stimulus. Romney’s supposed Bain sin was “outsourcing jobs.” Unfortunately, his consultants’ nitpicked that he was “retroactively in retirement” at the time and that Mr. Obama had outsourced jobs too by supporting green energy. Fortunately, candidate Romney himself was more on point by responding that he would “not apologize for being a successful businessman.” He has a good story to tell. In fact, Bain-supported companies have grown twice as fast as the Standard & Poor’s and the U.S. economy generally, have increased their revenues by $80 billion in the U.S., and have added 5,000 new stores and facilities to the economy.
But facts will not be enough. Candidate Romney has begun to put them together into a theme that average Americans can understand. It starts with President Obama. He sincerely tried but he simply does not understand the economy, having minimal experience there. His party had control of Congress and he was able to implement his philosophy of government – but we see the results are economic stagnation, with unemployment higher now than he promised his stimulus would avoid. “I understand how the economy works and have been successful in it” is Mr. Romney’s response. Now he must go further and conduct a serious discussion with the American people in order to close the deal.
Presidential nomination speeches are often perfunctory but Governor Romney’s presents a unique opportunity for him to fully explain what the election is all about. His vice presidential pick was a great start. The Convention audience will be the largest he will face where he can set the agenda and speak directly to voters over the heads of the mainstream media. He not only needs to convince undecided independents but to invigorate his supporters. While politics is often simply fancy phrases, sound bites and emotions, in these stressful times critical segments of the audience will be looking for substance. If he is to be president, Mr. Romney will have to deliver.
Gov. Romney’s acceptance speech must be the most serious of his life, thoughtful in tone but logical, comprehensive and even philosophical. While other key issues should receive some attention, the great majority of the speech must be a fundamental defense of capitalism. It will be his best opportunity so he must be fully prepared, giving this speech the time it deserves, taking time off from the campaign trail, where most such appearances will have little real effect anyway. Ronald Reagan would often take a week or more composing and refining a single speech.
The speech should start by asking, “Why has the economy been stagnant for so long? The answer is that our nation’s leaders do not understand how a free economy is supposed to work. President Obama and many others think the government creates jobs. As a person who never worked in business, how could he know and few of his appointees have such experience either? In fact, government-created jobs must be paid for by taxes or borrowing from someone else who could otherwise be creating real permanent jobs that increase productivity and economic growth. Government is essential for certain functions but is not known for creativity nor can it predict which businesses will be productive and generate more jobs and wealth, as proved by the failure of the trillions of subsidy dollars wasted over the last few years. We were promised that if we passed the $800 billion stimulus, we could keep unemployment from going as high as 8 percent but it has exceeded that rate ever since.
“Private investment is different because people are supposed to risk their own funds not other peoples’ money. Who would be more careful investing funds: government bureaucrats in lifetime jobs or someone who could lose his own savings? And when poor investments are made should innocent taxpayers pay the price or should those who would have shared in the profits? Yet, the government’s policy has been to rescue private investors and hire more bureaucrats. Such crony capitalism must stop and I will stop it, including ending government contracts to politically-favored friends and trendy business that should sink or swim under real market competition. Productivity is the secret to success but output per worker digging holes and filing them up does not increase wealth. What is real job creation? Best-selling investment author Andy Kessler puts it well.
“First a new technology is developed to do something never achievable before so its creator must hire people to produce and sell the good or service to gain a reward for his efforts. An efficient ATM may displace tellers but it also attracts customers to numerous locations that all need machines created by many new manufacturing, engineering and sales employees. Second, a new technology allows things previously economical only to a very few to be made more available to many. Adobe software made typesetting and the jobs it created for a few big firms obsolete but it allowed millions to become independent publishers. Finally, a new less costly product allows the savings to be used to invest in other areas that will produce additional jobs. A $500 iPad tablet replaces a $5,000 computer and allows a customer to spend the saved $4500 somewhere else that produces new jobs or to invest it in another business that will need new employees to produce some other good or service.
“That is what Bain Capital did and how I helped to produce so many new jobs. Not only does Mr. Obama not understand this process, his desire to control capital leads him to over-regulate those who do understand and could have created more jobs. When government regulates so minutely, potential entrepreneurs are afraid to take risks for fear they will not dot the I’s and cross the T’s to satisfy the bureaucrats. Obama Administration regulators are great creating rules but not ones employers can understand and comply with. In good times, no one notices over-regulation but in bad ones bankers are afraid to lend for new housing, manufacturing and mining for fear that minute amounts of pollution will land them in trouble with the law. A new Keystone XL pipeline that could increase energy independence and produce thousands of jobs is killed by too-restrictive environmental regulation. A small business service provider cannot afford a Washington lawyer to fight his way through the thousands of rules.
“As far as outsourcing jobs, yes that does happen when it is the only way for a business to survive. Would it be better if an American company should fall to foreign competition completely and lose all of its employees? Some people seem to think so. Or is it better to have mechanical U.S. robots replace American workers rather than foreign workers so a U.S. firm can compete? Often that is the only choice in an increasingly cutthroat world economy. The U.S. must be ready to compete against them all. The American worker can—if the government will let them.
“Making scapegoats of the wealthy may be clever politically but it is counterproductive especially in the prolonged economic stagnation we are suffering as one result. It may or may not be “fair” in some sense but has anyone ever been hired by a person without capital? The uncomfortable fact is that rich people have funds to invest and will do so if they are not put at risk by the government. That is how the free market is supposed to work and I will do everything in my power to restore its vitality. I will put a freeze on new regulations and will review all regulations that hamper production before assuming the office of president. When these are not essential to safety I will put them on hold so we can start producing jobs once again – starting on day one of my presidency.
The bottom line fact is that economic growth has been anemic and is getting worse. GDP did go up to 4 percent in 2009 but that was temporary, dropping to and leveling off at 2.2 percent in 2010 and then dipped again to only 1.9 percent in the first quarter of this year and an even worse 1.5 percent in the last quarter. While jobs were growing 250,000 per month at the beginning of the year – but still not enough to offset our increase in population – they have now sunk to a mere 150,000. That will not do. The nation demands a robust growth so all Americans can get back to work. That is what I will do.”
Job growth cannot be achieved with good intentions. A president must understand how the economy works if he is to improve it. The nomination acceptance speech is the opportunity to do so. If Gov. Romney can convince most Americans that he does understand and that this will allow him to restore a vigorous prosperity, he will be the next president.
Donald Devine, the editor of ConservativeBattleline On Line, was the director of the U.S. Office of Personnel Management from 1981-1985 under Ronald Reagan and is Senior Scholar at The Fund for American Studies.