Wednesday, January 16, 2008

On Romney

Alex and G.B.  have raised some points about Romney and his strengths and weaknesses relative to the other candidates.  I was going to respond in the comments section of the appropriate post, but considering Romney's win in Michigan and the continuing nature of my concerns about him I'll do so here instead.

Romney greatly frustrates me.  I really do want to like him.  I'm no fan of Huckabee, McCain, or Fred (good on policy, but he's run his campaign like an arrogant ass who expects the nomination to just be handed to him).  Rudy is my favorite (still), but his chances are rather slim at this point, even with the new chaos in the race.  Thus, I want to believe that Romney would be a relatively meritorious alternative should Rudy fall out of the running.  Moreover, it's obvious that Romney has some very appealing (to me), policy-wonk-like qualities.  Alas, Romney constantly gives me (and a good proportion of the GOP electorate generally) more reasons not to support him. 

Romney's Michigan campaign provides a case in point.  With his business background, no one in GOP race was better qualified to diagnose Michigan's economic woes and propose solutions based on sound free-market principles.  What did Romney do instead?

He proposed a $20 billion corporate welfare and central-planning package for the auto industry.  As Byron York reported from Michigan for NRO:

His plan is to make the United States government a virtual partner of Ford, GM, and Chrysler. “If I’m president of this country, I will roll up my sleeves in the first 100 days I’m in office, and I will personally bring together industry, labor, Congressional and state leaders and together we will develop a plan to rebuild America’s automotive leadership,” Romney tells the Economic Club. “It will be a plan that works for Michigan and that works for the American taxpayer.”
The plan would involve easier-to-reach mileage standards, increased funding and extended tax breaks for research and development [there's the $20 billion -- B.A.], worker health care reforms, and more. “Detroit can only thrive if Washington is an engaged partner, not a disinterested observer,” Romney says. “I am not open to a bail out, but I am open to a work out. Washington should not be a benefactor, but it can and must be a partner.”

Could any economic conservative believe that Romney's European-style bailout (let's call it what it is) is consistent with conservative economic principles?  As one wit put it, Romney won Michigan with "a Kruschev-style five year plan for Detroit."

I really do want to believe that Romney is not just a crass opportunist (even by the standards of a presidential candidate) who will say whatever he thinks will help in any given race.  But the evidence otherwise is growing rather than diminishing.


P.S. As for Alex's shot at Rudy, I'll answer that later.


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Tom O'Neill said...

How, precisely, does a commitment to spend $20B on R&D sink to the level of Soviet central planning?

Brian said...

Obviously, the observer's "five-year plan" comment is something of an exaggeration. However, Romney's auto industry program is distinctly oriented toward government central-planning. In particular, Romney's idea of making the federal government a "partner" of GM, Ford, and Chrysler would give it a role in the business planning of those companies that is very uncommon, and perhaps unmatched, in the modern U.S. industry environment. As I alluded to in my post, this aspect of Romney's plan seems more appropriate to a system that employs quasi-socialist industrial planning than a system that largely allows markets to determine the fates of companies.
The "partnership" aspect is the most concerning part of Romney's plan for me, but there are other portions that deserve criticism as well. His pledges to change health care policy are vague, but it seems that he wants government to bail the Big Three out for their previous decisions to cave into labor unions on health benefits. Additionally, his promised $20 billion R & D expenditure wouldn't actually do much to address the problems that have got the U.S. companies where they are now; GM, Ford, and Chrysler are in trouble because they aren't designing products that are responsive to the market, not because there is a large technological gap between them and foreign-headquartered automakers.

By the way, I've heard that Romney will be making a stop at the WV GOP convention in Charleston on Feb. 5. I wonder if he'd be willing to take a side trip to the Toyota plant in Putnam County and explain to the workers there why their federal government should come to the aid of poorly-run competitors of their company. That would be an interesting event.


Hancock.Tom said...

The Toyota plant doesn't need Romney - they have Joe Manchin. Every piece of equipment in the plant is owned by the state of WV who leases it back to toyota. This scheme is set up to avoid WV's oppressive B&O tax.

Brian said...

Tom (H.):

Didn't know that specific fact about the equipment-lease scheme, though I knew generally that the plant receives favorable tax treatment from the state, of course. West Virginia, like many states, has chosen the tact of offering individual incentives to large employers in lieu of rationalizing the broad tax and regulatory policies that impact businesses of all sizes.

But it's not like small and medium-sized businesses are important to the health of a state economy. Only large employers matter. That's the a key economic principle behind our state's current incredible prosperity.

(By the way, I took your post as pointing out a fact about the Toyota plant, rather than as a criticism of the argument I made in responding to Tom's question. If it was indeed intended to be a criticism, let me know and I'll respond.)