Romney somersaults on to the middle ground
Do you recall just seven months ago when Romney campaign aide Eric Fehrnstrom let slip that having won the Republican primaries, his candidate would “shake it up and restart it all over again” as if wiping clean an Etch-a-Sketch screen? Romney did just that last night. From a standing start Romney executed a perfect backward somersault, landing with both feet slap-bang in front of a bemused president, who appeared quite taken aback that his rival should plant his feet firmly in the middle ground where elections are won and lost.
Take Romney’s view of regulating the market. In his personal manifesto No Apology, Romney trod a careful path, suggesting that, like his primary opponents who unwaveringly support the untrammeled free market, he was wary of overregulating business. “Excessive regulation slows the creation of new businesses and the expansion of existing businesses,” he wrote. On his website, he promises to “act swiftly to tear down the vast edifice of regulations the Obama administration has imposed on the economy.”
But in Denver last night, Romney changed his tune, suggesting that he had always been in favor of regulation, whatever impression he may have given in the past. “Regulation is essential,” he declared. “You can’t have a free market work if you don’t have regulation … Every free economy has good regulation.”
Last August, Romney told a roomful of Wall Streeters: “The extent of regulation in the banking industry has become extraordinarily burdensome following Dodd-Frank,” and said, “I’d like to repeal Dodd-Frank,” a carefully worded half-promise to remove regulations imposed on Wall Street in the aftermath of the 2008 collapse. Last night he amended his pledge. “There’s some parts of the Dodd-Frank that make all the sense in the world,” he said, and that rather than repeal it outright, he would “repeal it and replace it” with similar curbs on reckless business practices. Paul Ryan, who cites as an inspiration Ayn Rand, who thought all constraints on business were next to communism, must have been a little surprised at Romney’s brazen about-face.
Romney also wriggled on cutting taxes for the rich. In the primary debate in Rochester, Michigan, in November 2011, he was adamant he wanted to retain the Bush tax cuts, including tax breaks for the super-wealthy. Explaining that he didn’t want to raise taxes on anyone in the middle of a recession, he said: “That’s one of the reasons why we fought so hard to make sure the Bush tax cuts weren’t taken away by President Obama.” It was a refrain he had been repeating since running against John McCain in 2008. At a primary debate in Boca Raton in January 2008, he announced: “I support the Bush tax cuts … One way to [create more jobs] is by holding down taxes and making those tax cuts permanent.”
Last night there was no mention of the Bush tax cuts – indeed, no mention of George W. Bush at all, by Romney. “I do want to reduce the burden being paid by middle-income Americans,” Romney said. “And I – and to do that that also means that I cannot reduce the burden paid by high-income Americans,” a sure indication that Romney’s pollsters have found that loading taxes on the rich is popular.
In a debate ostensibly about economic policy, there was no mention of either John Maynard Keynes, whose ideas about stimulating the economy continue to guide Obama’s Treasury team, or Friedrich Hayek, another Ryan hero and the champion of pro-austerity “Austrian economics.” But though he dare not speak his name, Romney’s proposal last night for reducing the deficit was pure Keynes: Don’t cut too much too soon to tip the economy back into recession, but put everyone back to work so they can afford to pay taxes. Or, as he put it: “There are three ways that you can cut a deficit. One, of course, is to raise taxes. Number two is to cut spending. And number three is to grow the economy, because if more people work in a growing economy they’re paying taxes and you can get the job done that way.” By backing the third option, Romney rejected the tough-love policies urged on him by his primary rivals and instead has prioritized growing the economy.
Romney displayed a nimble ability to turn on a dime, emerging with a raft of proposals that sounded reasonable and cogent. The mystery is not why Romney refashioned himself as a moderate whose competence set him apart from the president, but why Obama did not see it coming. Romney’s agile and eloquent performance was a brilliant example of political dexterity, while Obama was left stuttering and stammering into the lectern. Whatever verdict the polls deliver in the next few days, Obama now enters the second debate as the underdog. If the president doesn’t ditch his charmless demeanor and hangdog look and sharpen up his rhetoric, Romney will steal the middle ground from under his nose.
Nicholas Wapshott’s Keynes Hayek: The Clash That Defined Modern Economics has just been published in paperback by W.W. Norton. Read extracts here.
PHOTO: Republican presidential nominee Mitt Romney and his wife, Ann, stand onstage after the first presidential debate in Denver, October 3, 2012. REUTERS/Jim Urquhart