Back in January, I endorsed Mitt Romney for President. As a problem solver, I was looking for someone whom is best able to measure up to the demands of the position in the current context: we are dealing with a slow-growth economy, chronically underfunded entitlements, and ongoing operations where the federal government is spending at or near record levels to GDP. Government continues to expand its dominance over industries like health care and banking (mortgages, student loans, etc.); businesses struggle to cope as the government shifts the ground under their feet, adding to an excessive regulatory burden with compliance costs and paperwork, employee and other mandates, and globally high tax bracket rates, while the President and Congress spar over payroll and income taxes.
We have massive duplication across government, earmarks and other spending tied to politically powerful Congressmen not even wanted by the Department of Defense or other agencies.
Romney has for nearly 30 years dealt with new businesses and turnaround stories; he took a leadership role in turning around a failing host Winter Olympics. He even turned around his parent company Bain & Company; he became governor of Massachusetts when the state was losing jobs and billions in deficits. We have had few candidates for President with both public and private sector executive experience capable of reingineering the massive federal government. I recently quoted Paul Nathan whom has made similar points:
It's up to the next President to restructure government. What we need is a technocrat, a practical person to take on the bureaucracy of Washington and reduce it. We need to reverse spending, reverse the deficit, and put the government back on a path toward a balanced budget. We need to restructure not only the unnecessary areas of government but even the most important and necessary areas of government. We need to end duplication and we need to reduce government wages and benefits to levels closer to that of the private sector. America needs a tax system that is fairer and a regulatory system that is simpler.Differences with Libertarians
That’s why we need someone who can take a failing, dysfunctional institution, and set it on a path of solvency and efficiency, while at the same time instituting time tested principles that will lead to success and prosperity within the economy. Someone who knows how to take a failing situation and turn it profitable? This is what Mitt Romney does! This is who he is.
We also no longer need a President to tell us how to turn the economy around. We know how. We need a President that can do it. Romney is a “nuts and bolts” guy who has been preparing all of his life for this. Those that criticize Romney for his years at Bain Capital totally miss the point. Bain is a company that specializes in turning failing companies into successful ones. And that is exactly what needs to be done to our government today.
I ask you not to judge Romney on the consistency of his ideas when it comes to the academic principles of freedom and free enterprise, judge him instead on his expertise in applying those principles as a manager. We need a President that will assemble an all-star team, roll up his sleeves, and go to work repairing our damaged economic and political system.
Brian LeSorsa identifies a number of issues Libertarians have with Romney:
- Drug prohibition. Romney doesn't favor decriminalization. He sees marijuana as a gateway to more serious drugs. Whereas I personally oppose illicit drugs, I'm more concerned about our justice system imprisoning a disproportionately high number of people on victimless crimes like drugs and immigration. If Romney wants to control our expensive prison costs, he needs to address serious prison reform, including imprisonment on related charges.
- The Federal Reserve. Libertarians have tended to be from the monetarist (Friedman) or Austrian Schools (Von Mises, Hayek), both highly critical of the Fed; Friedman thought the Fed could he replaced with a rule replacement for money supply. Both schools have worried about the Fed gambling with inflation. The Austrian School dislikes manipulation of interest rates and points out that artificially low interest rates rob savers and promotes malinvestment, including asset bubbles. Romney at times has been supportive of the Fed and/or TARP, in terms or price stability and/or liquidity. However, since LeSorsa's post (no connection implied), Romney has sounded a more critical note, saying he would not reappoint Bernanke, warned the Fed against a QE before the election (which has been done). He has also been supportive of audit the Fed. His running mate Paul Ryan has been a strong Fed critic, including its dual mandate of price stability and full employment; wanting the bank to stick to the original first mandate.
- Military and War. I think that Romney attributed his 2008 loss of the nomination to McCain's dominance among military and law-and-order conservatives. and he is particularly focused on retaining this section of the traditional base. In fact, I think he's pushing on a string; Special Operations for America put out a tough anti-Obama ad. There are Youtube videos of families whom feel that Obama has politically exploited their sons' deaths, and not only has the Obama campaign used the UBL operation for political reasons, in an election ploy that is more like a schoolboy taunt, they have attempted to suggest Romney doesn't have the stones to make an obvious decision to take out UBL if and when he would have had the opportunity.Romney has responded with pledges to rebuild the military and has engaged in tough talk on Iran and China trade. There is little doubt that Romney doesn't share my concerns about being the world's policeman, outspending the next few countries put together, despite chronic budget deficits, nor does he seem to share Eisenhower's distrust of the military-industrial complex or the Founding Fathers' fear of international entanglements.
Some differences I have in tactics or strategy include:
- posturing vs. Bush/Obama
I have argued that there are a lot of similarities between Bush and Obama in terms of domestic and foreign policies. We have seen huge spending under both Bush and Obama and very little austerity. McMaken makes an interesting argument that Bush was the most spendthrift President in decades, with federal outlays up nearly 75% in nominal terms. I have some differences with McMaken over his methodology. [For instance, the GOP controlled both chambers of Congress only for 2003-2006, and McMaken arbitrarily makes Bush responsible for most FY2009 spending; the fact is the Dems controlled the Congess and did not pass the Bush budget but passed continuing resolutions.] Also, Bush experienced bookend recessions caused by two major asset bubble crashes, aggravating the deficit with weaker tax revenues and increased social spending.
But clearly Bush had a spending problem,and it isn't hard to find fiscal hawk critics, like Richard Viguerie, one of the Reagan Revolution architects. Inflation-adjusted federal expenditures in Bush's first term rose by just over 19%, 4 or more times larger than under either Clinton term. Discretionary domestic spending growth percentages were higher than under LBJ, Carter, and Clinton; up through 2006, Bush failed to exercise a single veto on any budgetary matter, while LBJ and Carter vetoed at least 30 bills each passed by a Democratic-controlled Congress. And just in case anyone forgets, Bush also allowed spikes in six-figure compensation (including bonuses) for large numbers of upper-level federal employers.
I think Romney needs to contrast his approach versus the Bush/Obama high spending record and approach, including across-the-board cuts, aggressive use of his veto authority, getting entitlements under control and on sustainable path, and government reorganization, eliminating redundancy across government. I also think that Romney should attack the Bush/Obama approach as fundamentally unbalanced, with biases for consumption versus saving and investment and inadequate focus on globally competitive, simpler, broad-based tax policies; we need an end to Bush/Obama market intervention and mercantilist policies (e.g., steel or ethanol tariffs, buy American products, etc.) and more of a dedication to free market principles, not playing winners and losers in the marketplace. The government needs to get out of the banking and health care industries, privatize operations and/or delegate funding and responsibility for services to states and municipalities and sell or lease assets.
Anthony Gregory (see figures below) makes the intriguing claim that Obama was been worse on the wars than Bush (particularly with respect to Afghanistan). What I want to hear from Romney is what we have learned from nation building and need to be more prudent when and where we invest American blood and treasure: the Defense Department is just like any other inefficient federal bureaucracy and must learn to operate more efficiently under budgetary constraints. We need to scale back on open-ended alliance commitments and/or interventions.
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| Figure 1 American Fatal Casualties Iraq / Afghanistan Courtesy of Anthony Gregory / Mises.org |
- posturing against failed, unsustainable progressive government. Trillions in deficit spending even with unrealistic assumptions of an improved economy. Unpaid for entitlements (social security and Medicare), chronically under invested infrastructure, increasing government scope creep, unprecedented interventions in the economy (home lending, college lending, health and retirement services, etc.)
- a more positive, conservative, old-fashioned values campaign. We need a government which privatizes or outsources non-core functionality, which lives within its means and limits its obligations internally and externally, which encourages individual responsibility and accountability, and which rejects undue dependence on government.
- a more focused campaign with a simpler pro-growth message. Avoid culture war issues, focus on more balanced tax policy (meaning consumption, and lower, simpler income tax policies, real, across-the-board spending cuts, slashing of business/competition killing regulations, licensing, etc., means-testing of entitlements, federal employee benefit reforms, etc.
I want to see fundamental reforms restoring individual liberty and dignity (e.g., Patriot Act, TSA, etc.), more federalist/decentralized power sharing and authority at the state and local levels, and reforms addressing the underground economy, including reforms on the prosecution and sentencing of victimless crime.
