On the issue areas that I actually know something about, he looks to be a very bad penny indeed:
Since at least 1825 economists have understood that there are two sources of high unemployment: structural unemployment, when the salaries which workers expect to get are greater than the salaries that businesses expect to pay; and cyclical unemployment, when the households, businesses, and governments in the economy are collectively all planning to spend less than they take in. Two different diseases. With different cures.
Romney has a plan for dealing with structural unemployment--a bad plan. But he has no plan at all for dealing with cyclical unemployment. America does not (yet) have the structural-unemployment disease. (But if things go on as they have been, we will, we will.) Right now America has the cyclical unemployment disease.
The Washington Post’s Greg Sargent complained that when asked how he would deal with cyclical unemployment Romney came out with six policies to deal with structural unemployment: 1. opening more international markets to American trade, 2. balancing the budget over the long term, 3. subsidizing drilling for oil and gas, 4. “revamping” the National Labor Relations Board, 5. lowering tax rates for businesses, and 6. repealing ObamaCare.
I don’t think these are particularly good policies with the exception of opening markets and balancing the budget--and anybody looking at Republicans Reagan and the Bushes on the one hand and Democrats Clinton and Obama on the other knows that one and only one political party has stepped up to the plate and worked to try to balance the budget, and Romney's next breath is about how he wants to lower taxes. Everybody not bought and paid for by the oil companies knows by now that clean energy is a better and in the long run much cheaper place to invest government money than carbon energy. The National Labor Relations Board’s teeth have already been pulled so that it has no effect on the economy for ill or good. And ObamaCare--well, back when it was called RomneyCare and Governor Romney was its biggest booster, he was not scared that it would cost jobs. Indeed, RomneyCare has not cost jobs in Massachusetts: the fact that businesses and households can purchase insurance through the Health Exchange has made Massachusetts a more attractive place for households to move to and businesses to locate in.
But let that pass. These are at least policies.
Our big problem is that the crisis facing the American economy today is a cyclical employment crisis. It requires different cures. You cure structural unemployment by bringing the salaries workers expect to receive into line with the salaries businesses plan to pay. You cure cyclical unemployment by bringing the total of net planned spending by households, businesses, and governments back into balance with their incomes.
One of our two parties is about to nominate a candidate for the office of President of the United States who has no plans at all for even attempting to solve our cyclical unemployment crisis.
This is a huge problem for us.
If 2012 were a normal year, as far as the business cycle were concerned, 63% of American adults would have jobs. Instead, only 58.6% of American adults have jobs. That’s six million Americans who ought to be working who are not. At least three out of four Americans now are or have a close relative who ought to be working and would be working in normal times but is now jobless because they are cyclically unemployed.
Admittedly, 58.6% is better than the 58.2% who had jobs late in 2009, when the emergency stabilization policies--the Bush administration’s TARP bank bailout and the Obama administration’s Recovery Act and bank stress test recapitalizations--brought the decline to a halt. And 58.6% is better than the 53.0% that would be employed according to Alan Blinder and Mark Zandi's calculations had we not done the TARP, the stress tests, and the Recovery Act.
But to go from 58.2% to 58.6% when you ought to be getting to 63% is not good enough.
President Obama has a plan for dealing with our cyclical unemployment crisis: the American Jobs Act--payroll tax holidays, investment incentives, employing more people (not, as Governor Romney wants to do, fewer) as cops, firefighters, and teachers, mortgage refinancing, reforming the unemployment insurance system.
Romney has no such plan.
If the Democrats and Republicans in Congress had passed Romney's plans last year, right now employment in the U.S. would be exactly where it is.
If the Republicans in Congress had not blocked it last year, this year employment in the U.S. would be between one and three million higher. That would have gotten us to 60% of American adults at work--not the 63% we ought to have, but better than the 58.6% we have now.
From my perspective, President Obama’s plans offer us a glass that is half full--and if the American Jobs Act had passed last year, there would surely be a follow-up this year to try to fill the glass a little more.
Romney offers us no glass at all.