On Tuesday, presidential candidate Mitt Romney laid out his jobs plan. Romney deserves credit for laying out a relatively clear and detailed roadmap for economic policy in a prospective Romney administration. It's easily accessible and intelligible. But the plan is less than comprehensive, and there's much less than meets the eye. Remember That 70s' Show? This is more like That 00s show.
The Romney plan is, first and foremost, a political document, and should be read as such. There's a jobs chart showing the "Obama recovery 2007-2009." Huh? It labels the stimulus as $775 billion in government spending, when a big chunk of it was tax cuts and credits. And he continues the long-running talking point about the vast expansion of government employment. "President Obama has continued to expand the size of government. While the private sector has shed 1.8 million jobs since he took office, the federal workforce has grown by 142,500, or 6.9 percent." That's just not true. BLS shows that in August 2011, there were 2.822 million federal employees, compared with 2.792 million in January 2009. That's an increase of 30,000. As we've long noted, over the past two years, the private sector has been adding jobs, while the public sector — state, federal, and local — has been shedding them. Romney spends good chunks of space railing against organized labor. But in the private sector, only 6.9 percent of workers are unionized. There are many factors holding back demand and jobs growth in the U.S. — outsourcing, uncertainty, credit contraction, an obsession with higher profits and more cash reserves. It's hard to argue that private-sector unions should rank in the top ten.
While the union-bashing may be red meat for the Republican base, Romney tacks to the center in other areas. He doesn't go in for the full-on dismantling of Social Security or Medicare, nods briefly at income inequality (he proposes eliminating capital gains taxes for people making under $200,000), and shows some ambivalence about free trade with China. (For these reasons, the Wall Street Journal editorial page has criticized the plan.)
Still, there are some odd omissions. The phrase "health insurance" appears only once in the 160-page document (and that's when he notes that President Obama is changing it.) Expanding health insurance was Romney's signature achievement in public life. And the lack of health insurance, its rising cost, the anxiety surrounding it, isn't just a major source of concern — it's a major economic issue. Lots of people end up bankrupt, or stuck in subprime loans, or in dire financial straits because of inadequate insurance. And yet there's no mention of his record in Massachusetts, and very little talk of what should be done after Obamacare is repealed. Search for the word "poor," and you'll find adjectives describing policies and a few mentions of Standard & Poor's. But there's little about the vast legions of poor, including the working poor. You would think that a centimillionaire would make some nods, out of noblesse oblige. (Mitt Romney's world is one in which somebody who makes $200,000 is middle-class.)
Romney has plenty of his own ideas, and this document is very much pitched to a 2012 audience. But the overarching sensation reading through the plan is one of déjà vu. The foreword is by Glenn Hubbard, dean of Columbia Business School and frequent Daily Ticker guest, and economist N. Gregory Mankiw of Harvard has signed on to advise Romney. This dynamic duo, it should be recalled, lent their academic credentials and expertise to the Bush White House, where they served, successively, as chairman of Bush's Council of Economic Advisers in the first term. These are the folks who helped bring us sharply higher federal spending, an unfunded Medicare prescription drug benefit, and massive spending on wars — all unsupported by revenues.
Just so, Romney's prescription is something of a Bush-era retread: even-lower taxes on investment, light regulation of the financial sector, hostility to unions, a blasé attitude toward the health insurance crisis, essentially ignoring the travails of the vast majority of people on the lower end of the wage scale. If that worked so well, the period from 2001-2009 would have been an age of prosperity and rising wages rather than a lost decade.
With this plan, Romney is banking on one of two things. Either the American public has a very short memory. Or things have been — and will remain — so bad that the mistakes of the past decade have already been forgotten.
Daniel Gross is economics editor at Yahoo! Finance
Email him at grossdaniel11@yahoo.com; follow him on Twitter @grossdm
His most recent book is Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation
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