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“It’s More Than Romney Promised”: What Would Republicans Say If Mitt Romney Were President And The Economy Was This Strong?

Imagine if Mitt Romney were president right now.

Imagine if, 722 days after winning the election, President Romney were presiding over an economy growing at five percent a year, an unemployment rate dipping beneath six percent, and gasoline that was less than $2-a-gallon.

This is, after all, what Romney promised. Hell, it’s more than Romney promised.

“I can tell you that over a period of four years, by virtue of the policies that we’d put in place, we’d get the unemployment rate down to six percent, and perhaps a little lower,” he told Time during the campaign. December’s tumble to 5.6 percent unemployment is, thus, two years ahead of schedule.

As for the five percent growth rate and the sub-$2 gas — that’s more than Romney dared ask the electorate to expect. Tim Pawlenty — remember him? — promised to nudge growth to five percent and was roundly mocked for his troubles. And to find anyone promising $2-a-gallon gas, you need to dig up Michelle Bachmann’s campaign lit (even Newt Gingrich didn’t dare predict gas under $2.50, and he wanted to use space mirrors to light highways).

If Mitt Romney were president right now, he would be seen as the second coming of Ronald Reagan. There would be parades in the streets. The kids would have “severely conservative” tattoos. Men would be saying “gosh.”

This is the problem with how Washington — Democrats and Republicans alike — interpret economic news. If Mitt Romney was president right now the economic numbers would be seen as proof that he was a remarkable success. They would appear to show that his agenda — repealing Obamacare, cutting taxes, deregulating the economy, greenlighting the Keystone XL pipeline — was precisely what had been needed to unleash the awesome growth engine that is the American economy. Conservatism would be ascendant. Liberalism would be discredited.

But Barack Obama won the election. The Affordable Care Act hasn’t been repealed. Taxes were raised in 2013. Regulation has proceeded apace. The Keystone XL pipeline is no closer to being built. And yet the economy is roaring. The ambitious economic promises the GOP field made for their conservative policies have been achieved despite the continuation of liberal policies.

There is an easy liberal interpretation here: President Barack Obama is great. Liberalism is great. And it’s simply entrenched media narratives and the GOP’s relentless resistance to giving Obama credit for anything that has left his approval rating stuck at 44 percent.

But I come not to praise President Obama. I come to bury the lazy economic thinking that infects American politics and, particularly, political campaigns.

Washington tends to think of itself as the cause and everything that subsequently happens in the world as the result. A booming economy is proof that Bill Clinton is a genius, or that Ronald Reagan is a genius. A crappy economy is proof that Barack Obama is a naif, or that George H. W. Bush can’t govern. It’s a view of causality usually found in five-year-olds, but it is pervasive in American politics. It is also false.

Policy matters, of course. And, particularly in 2008, 2009, and 2010, it was, arguably, the driver of our economic fortunes. But, for the most part, the economy is driven by much beyond what happens in the White House and the Congress (caveat: the Federal Reserve is an immensely powerful actor, but come campaign time, politicians tend to pretend it doesn’t exist).

It’ll be some time yet before we know whether the economy is truly beginning to roar or the engine is about to sputter out. But the $2 gas that’s left economists so optimistic isn’t the fault of anyone in Washington; it’s a mixture of technological innovation leading to more supply, falling global demand leading to yet lower prices for that supply, and Saudi Arabia refusing to slow production because it wants to choke America’s nascent shale-gas industry (Brad Plumer has an excellent look at the causes behind the cheap gas here).

The reasons unemployment has fallen below six percent are varied, and some of them are problematic (like the reduction in labor-force participation). Government policy has played a role, and my read of the evidence is that premature austerity, particularly at the state and local government level, did a lot to slow the recovery. Nevertheless, anyone suggesting that the job gains over the last two years are the clear result of anything Congress did, or didn’t do, is fooling themselves.

It’s an unhappy fact of political life that the direction of the economy tends to decide elections even though it isn’t actually driven by political decisions. Politicians tend to get around that by pretending otherwise: they take more credit than they deserve when the labor market is doing well, and they receive more blame than they deserve when it’s flagging.

By the normal rules of politics — the rules we would be playing under if Mitt Romney had won the election — the recent economic news proves Barack Obama is a magnificent leader and liberal policies an economic boon. But the normal rules of politics, at least when it comes to interpreting the economy, are dumb.

 

By: Ezra Klein, Vox, January 12, 2015

January 14, 2015 Posted by | Economy, GOP, Mitt Romney | , , , , , , , | Leave a comment

“Doesn’t Even Rise To The Level Of Pitiful”: Sorry, Republicans; The Keystone XL Pipeline Is Not A Jobs Agenda

In the new Congress, Republicans will have the majority in both the Senate and the House for the first time in eight years. As they get ready to take power, their rhetorical focus is clear: jobs, the economy, and more jobs.

So far, there are two main proposals on deck for the GOP. First, the Hire More Heroes Act, which would make it easier for small businesses that hire veterans to deny health care to their employees. Second, they want to immediately build the Keystone XL pipeline, a project that would transport oil from Canada to the Gulf Coast.

On their own, these are both extremely small-bore policies. But as a jobs agenda, this doesn’t even rise to the level of pitiful. It’s the latest evidence that Republicans continue to struggle with basic macroeconomics — and it does not bode well for the nation should they win the White House in 2016.

Let’s examine the Hire More Heroes Act first. ObamaCare requires that all businesses that have over 50 full-time employees provide health-insurance benefits. This law would exempt veterans from counting toward that cap, thus making it easier to expand a business over 50 employees if you hire veterans.

On its face, this might not even be a terrible idea. Health-care policy experts have long argued that funneling American health care through employer subsidies is bad, locking people into jobs they don’t like for fear of losing coverage, and increasing health-care spending. Rolling that system back very slightly might be a good thing. My problem is that there’s no reason to direct general social spending to veterans so preferentially.

But make no mistake, this is a tiny, tiny policy involving a relative handful of people and jobs.

Keystone XL is bigger in one respect. Generous estimates predict that the pipeline would create around 42,000 temporary jobs — about 2,000 construction jobs and the rest in supplying goods and services.

How many long-term jobs? Fifty. That’s right, 50 whole long-term jobs. (One more, and the pipeline would have to get health insurance for them! Unless they hired veterans, I suppose.)

Furthermore, the argument that Keystone XL would help by lowering gas prices just had the legs kicked out from under it, with the price of oil plummeting toward $50 per barrel with no sign of stopping. This was always a bogus argument, since the pipeline is a drop in the bucket compared with world supply, but now it makes even less sense.

To get a sense of the bigger picture, the U.S. economy pumped out probably close to 3 million jobs total last year. The GOP’s proposals, if enacted, will fail to make more than a small ripple in the job market.

The problem with the American economy is the same problem we’ve had since 2007: a lack of demand. With factories idle and workers unemployed, there’s not enough spending and not enough investment. Nations have two options for attacking this problem. First, spend money, through government investment in things like infrastructure, or handouts to citizens in the form of checks or tax cuts (fiscal policy). Second, use control of the money supply to ease credit and stimulate lending (monetary policy).

Republicans used to accept this framework, proposing a $713 billion government stimulus bill as recently as 2009. But they’ve since regressed intellectually to the pre–Great Depression era. The economic policy of the GOP today is almost indistinguishable from the days of Herbert Hoover and Andrew Mellon. Their platform is muddled on fiscal policy, proposing massive spending-side cuts coupled with large tax cuts for the rich — which in macro terms would cancel each other out. On monetary policy, they propose tighter money and reexamining the gold standard — which would slow the economy and throw people out of work. At best, it’s a large net negative for workers.

After the colossal failure of Hoover, when the Republican Party was largely locked out of national politics for a generation, they learned that parties ignore the lessons of Keynes at their peril. But it seems they will have to learn them again — and if they win full power in 2016, it will be at everyone’s expense.

 

By: Ryan Cooper, The Week, January 6, 2014

January 7, 2015 Posted by | Jobs, Keystone XL, Republicans | , , , , , , | Leave a comment

“Speculators Wagging The Election Year Dog”: Blame The GOP For $4 Gas

Gas prices continue to rise, which is finally giving Republicans an issue. Mitt Romney is demanding the president open up more domestic drilling; the super PAC behind Rick Santorum just released a new ad in Louisiana blasting the president on gas prices; and the GOP is attacking the White House on the Keystone XL Pipeline.

But the rise in gas prices has almost nothing to do with energy policy. It has everything to do with America’s continuing failure to adequately regulate Wall Street. But don’t hold your breath waiting for Republicans to tell the truth.

As I’ve noted before, oil supplies aren’t being squeezed. Over 80 percent of America’s energy needs are now being satisfied by domestic supplies. In fact, we’re starting to become an energy exporter. Demand for oil isn’t rising in any event. Demand is down in the U.S. compared to last year at this time, and global demand is still moderate given the economic slowdowns in Europe and China.

But Wall Street is betting on higher oil prices in the future — and that betting is causing prices to rise. The Street is laying odds that unrest in Syria will spill over into other countries or that tensions with Iran will affect the Persian Gulf, and that global demand will pick up as American consumers bounce back to life.

These bets are pushing up oil prices because Wall Street firms and other big financial players now dominate oil trading.

Financial speculators historically accounted for about 30 percent of oil contracts, producers and end users for about 70 percent. But today speculators account for 64 percent of all contracts.

Bart Chilton, a commissioner at the Commodity Futures Trading Commission — the federal agency that regulates trading in oil futures, among other commodities — warns that too few financial players control too much of the oil market. This allows them to push oil prices higher and higher — not only on the basis of their expectations about the future but also expectations about how high other speculators will drive the price.

In other words, a relatively few players with very deep pockets are placing huge bets on oil — and you’re paying.

Chilton estimates that drivers of small cars like Honda Civics are paying an extra $7.30 every time they fill up — and that money is going into the pockets of Wall Street speculators. Drivers of larger vehicles like the Ford Explorer are paying speculators $10.41 when they fill up.

Funny, but I don’t hear Republicans rail against Wall Street speculators. Could this have anything to do with the fact that hedge funds and money managers are bankrolling the GOP as never before?

Wall Street isn’t bankrolling Democrats nearly as much this time around because the Street is still smarting from the Dodd-Frank Wall Street reform law pushed by the Democrats, and from the president’s offhand remark in 2010 calling the denizens of the Street “fat cats.”

The Commodity Futures Trading Commission is trying to limit how much speculators can bet in oil futures — a power it was given by Dodd-Frank. It issued a rule in October, but it won’t take effect for another year.

Meanwhile, Wall Street has gone to court to stop the rule. It’s already won a stay.

As rising gas prices start wagging the election-year dog, the president should let America know what’s really causing prices to rise.

 

By: Robert Reich, From The Robert Reich Blog, Published in Salon, March 15, 2012

April 2, 2012 Posted by | Energy, Wall Street | , , , , , , , | Leave a comment

Mitt Romney Supported Everything The GOP Hates About Energy, And Then Some

Stop me if you’ve heard this attack: There’s a presidential candidate out there who wants high gas prices to force the government to finally increase regulations on cars, persuade Americans to stop driving those beastly SUVs, nudge people toward clean electric cars — all with the goal of combating climate change. And don’t even think about lowering gas taxes to help car owners out at the pump: That’s just a gimmick. Take a moment and guess which politician is behind these positions.

If you guessed Mitt Romney, you are correct. And his long history of enviro-friendly rhetoric during past surges in gas prices is proving awkward as he slams the White House for taking similar positions today.

The best example yet is probably an audio clip dug up by Buzzfeed’s Andrew Kaczynski, purportedly from a 2007 town hall, that contains in just two minutes just about everything Republicans hate about Democrats on energy.

In it, Romney is asked how he feels about requiring higher fuel-efficiency standards from car companies. He says he would consider them, explaining that the government has not required high enough efficiency standards in recent years and that loopholes encourage people to drive SUVs. Not only that, he’s rooting for high gas prices to help get the job done.

“The CAFE requirements have not worked terribly well over the last 20 years in part because they haven’t applied to trucks, so America has moved more and more to trucks and SUVs,” Romney said. “So the average fuel economy over the last, I think it’s 20 years, has been almost flat. I’m hopeful that with $3 gasoline being charged by Hugo Chavez and Ahmadinejad and Putin and others that you’re going to see Americans slowly but surely move to vehicles that are far more fuel efficient and you’ll see our manufacturers start competing on the basis of fuel efficiency.”

Today Romney proudly touts his opposition to fuel efficiency standards on his website, telling one conservative radio host that car companies’ woes came after “the government put in place CAFE requirements that were disadvantageous for domestic manufacturers.”

There’s more from that town hall. Romney specifically praised hybrid cars and electric car technology — now widely mocked on the right — as a potential solution. Romney himself has called the plug-in Chevy Volt “an idea whose time has not come” on the campaign trail and joked this month that “you can’t drive a car with a windmill on it.”

But back in 2007: “I sure hope that you’re going to see more and more hybrids and much better fuel economy,” Romney said. “Plug-in cars, electric cars with better battery technology, might be a way of reducing our emissions.”

This was in line with other past Romney statements that surfaced this week in which he urged Americans to channel the reality of high gas prices into support for alternative energy and conservation. The New Republic noted that Romney specifically opposed cutting the gas tax in his state in 2006 during a spike in oil prices for that very reason.

“I don’t think that now is the time, and I’m not sure there will be the right time, for us to encourage the use of more gasoline,” Romney said then. “I’m very much in favor of people recognizing that these high gasoline prices are probably here to stay.”

Today Romney insists that gas prices are the White House’s fault, even as the overwhelming consensus among experts is that it’s out of the government’s hands, and says that more drilling will help fix the problem. And he wants Obama to fire anyone in his administration who thinks that there are benefits to higher gas prices.

“This ‘gas-hike trio’ has been doing the job over the last three and a half years and gas prices are up,” Romney said last week, referring to Cabinet members Energy Secretary Steven Chu, Interior Secretary Ken Salazar and Environmental Protection Agency Administrator Lisa Jackson. “The right course is they ought to be fired.”

Even Romney’s own energy advisers are reluctant to back him up on his claims this week. Two of them, Glenn Hubbard and Greg Mankiw, have supported taxing energy in order to decrease emissions that contribute to climate change. In other words: increasing gas prices for the sake of the environment. That’s to the left of the Obama administration.

Romney surrogate John Sununu defended Romney’s 2006 and 2007 positions to TPM on Monday, suggesting that the governor was merely putting an optimistic spin on a lousy time for gas prices.

“I think if you look at those interviews what he was saying is we ought to take advantage of the terrible situation,” he said. He added that Romney, then and now, supports both “the production side of energy, where the governor is absolutely committed, and the conservation side” as part of the solution to America’s energy problems.

But add it all up, and Romney and his advisers are on record minimizing the government’s ability to influence gas prices and supporting many of the same goals and policies espoused by Democrats to help promote energy efficiency and combat climate change. Just as his health care bill’s similarities to the Affordable Care Act have made him vulnerable to attacks, Romney’s latest energy offensive might open him up to more of the same charges he’s faced throughout his campaign — that he’ll say and do anything to get elected.

 

By: Benjy Sarlin, Talking Points Memo, March 26, 2012

March 28, 2012 Posted by | Energy | , , , , , , , , | Leave a comment

“The Gas-Price Conspiracy Theory”: Republican Paranoia Strikes Deeper

Stop, hey, what’s that sound? Actually, it’s the noise a great political party makes when it loses what’s left of its mind. And it happened — where else? — on Fox News on Sunday, when Mitt Romney bought fully into the claim that gas prices are high thanks to an Obama administration plot.

This claim isn’t just nuts; it’s a sort of craziness triple play — a lie wrapped in an absurdity swaddled in paranoia. It’s the sort of thing you used to hear only from people who also believed that fluoridated water was a Communist plot. But now the gas-price conspiracy theory has been formally endorsed by the likely Republican presidential nominee.

Before we get to the larger implications of this endorsement, let’s get the facts on gas prices straight.

First, the lie: No, President Obama did not say, as many Republicans now claim, that he wanted higher gasoline prices. He did once say that a cap-and-trade system for carbon emissions would cause electricity prices to “skyrocket” — an unfortunate word choice. But saying that such a system would raise energy prices was just a factual statement, not a declaration of intent to punish American consumers. The claim that Mr. Obama wanted higher prices is a lie, pure and simple.

And it’s a lie wrapped in an absurdity, because the president of the United States doesn’t control gasoline prices, or even have much influence over those prices. Oil prices are set in a world market, and America, which accounts for only about a tenth of world production, can’t move those prices much. Indeed, the recent rise in gas prices has taken place despite rising U.S. oil production and falling imports.

Finally, there’s the paranoia, the belief that liberals in general, and Obama administration officials in particular, are trying to make driving unaffordable as part of a nefarious plot against the American way of life. And, no, I’m not exaggerating. This is what you hear even from thoroughly mainstream conservatives.

For example, last year George Will declared that the Obama administration’s support for train travel had nothing to do with relieving congestion and reducing environmental impacts. No, he insisted, “the real reason for progressives’ passion for trains is their goal of diminishing Americans’ individualism in order to make them more amenable to collectivism.” Who knew that Dagny Taggart, the railroad executive heroine of “Atlas Shrugged,” was a Commie?

O.K., this is all kind of funny. But it’s also deeply scary.

As Richard Hofstadter pointed out in his classic 1964 essay “The Paranoid Style in American Politics,” crazy conspiracy theories have been an American tradition ever since clergymen began warning that Thomas Jefferson was an agent of the Bavarian Illuminati. But it’s one thing to have a paranoid fringe playing a marginal role in a nation’s political life; it’s something quite different when that fringe takes over a whole party, to the point where candidates must share, or pretend to share, that fringe’s paranoia to receive the party’s presidential nod.

And it’s not just gas prices, of course. In fact, the conspiracy theories are proliferating so fast it’s hard to keep up. Thus, large numbers of Republicans — and we’re talking about important political figures, not random supporters — firmly believe that global warming is a gigantic hoax perpetrated by a global conspiracy involving thousands of scientists, not one of whom has broken the code of omertà. Meanwhile, others are attributing the recent improvement in economic news to a dastardly plot to withhold stimulus funds, releasing them just before the 2012 election. And let’s not even get into health reform.

Why is this happening? At least part of the answer must lie in the way right-wing media create an alternate reality. For example, did you hear about how the cost of Obamacare just doubled? It didn’t, but millions of Fox-viewers and Rush-listeners believe that it did. Naturally, people who constantly hear about the evil that liberals do are ready and willing to believe that everything bad is the result of a dastardly liberal plot. And these are the people who vote in Republican primaries.

But what about the broader electorate?

If and when he wins the nomination, Mr. Romney will try, as a hapless adviser put it, to shake his Etch A Sketch — that is, to erase the record of his pandering to the crazy right and convince voters that he’s actually a moderate. And maybe he can pull it off.

But let’s hope that he can’t, because the kind of pandering he has engaged in during his quest for the nomination matters. Whatever Mr. Romney may personally believe, the fact is that by endorsing the right’s paranoid fantasies, he is helping to further a dangerous trend in America’s political life. And he should be held accountable for his actions.

 

By: Paul Krugman, Op-Ed Columnist, The New York Times, March 22, 2012

March 23, 2012 Posted by | Election 2012, Energy | , , , , , , , | Leave a comment

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