The Romney Conundrum: Jekyll and Hyde: Expect Mitt Romney’s economic and political advisers to struggle over his soul if he wins the presidency. As president, would Mitt Romney follow his all-star economic advisers—or the promises he has made to the Republican base?
Mitt Romney pitches himself as the sort of guy who surrounds himself with the smartest people he can find. He’s the consummate corporate executive: He listens to smart people and puts their best ideas into play. Sure enough, in his presidential campaign, Romney has assembled a team of conservative economists whose smarts and star power, academically and politically, outshine that of any of his Republican rivals. Last year, Romney’s economic advisers advocated policies that, if a candidate were to package them together, would amount to the most creative jobs plan in the GOP field….
Romney issued a 59-point economic plan with fanfare last September. The platform contradicts landmark findings on monetary and housing policies published in 2011 by his top two economic advisers: Glenn Hubbard, the dean of Columbia University’s business school; and N. Gregory Mankiw…. Mankiw and a coauthor called last spring for the Federal Reserve Board to goose consumer demand by easing monetary policy…. Hubbard and two collaborators argued for reducing the interest rates on 30 million home mortgages….
But in both cases, Romney has vowed to pursue the opposite course. He has said he would replace Federal Reserve Board Chairman Ben Bernanke with someone who would tighten monetary policy… let the housing market stabilize on its own….
This, then, is the Romney Conundrum—for conservatives, liberals, and everyone else. Even on the economy, Romney’s signature issue, it’s hard to know where his heart lies—and how he would govern in the White House. Would the former Massachusetts governor listen to his best and brightest? Or to his party base?…
Romney, if elected, would join a parade of recent presidents who struggled to reconcile campaign promises with political and economic reality. George H.W. Bush violated his “read-my-lips” vow not to raise taxes and lost reelection. Bill Clinton ran on a middle-class tax cut…. George W. Bush broke his pledge to concentrate his tax cuts on low- and middle-income Americans and to pay down the national debt. Barack Obama still hasn’t renegotiated the North American Free Trade Agreement, as he promised during his 2008 campaign….
What you get from piecing together the recent work of Romney’s advisers is a coherent, data-driven story of what is wrong with the U.S. economy and how it ought to be fixed…. [T]he story that the candidate’s economic advisers like to tell about the housing market and monetary policy is one that the candidate’s plan sidesteps…. Economists who have advised presidents and would-be presidents concede that it would be delusional to expect Romney, or any candidate, to parrot his advisers on every economic issue….
“Those guys make me feel better about Romney,” said Jared Bernstein, who served as Vice President Joe Biden’s chief economist and has returned to the liberal Center on Budget and Policy Priorities….
“As a general proposition, you trust what the candidate says, not what academic advisers believe,” said Robert Shapiro, a former campaign and White House adviser to President Clinton….
Mankiw, for one, has openly pondered a version of the Romney Conundrum. In a 2006 op-ed in The Wall Street Journal that called for raising the gas tax, he wrote, “Is it conceivable that the policy wonks will ever win the battle with the campaign consultants?” Well, consider this: Romney, too, went on to embrace a form of gas tax. In his book No Apology: The Case for American Greatness, he called for a gasoline or carbon-emissions tax that would be fully offset by reduced payroll taxes. “Higher energy prices would encourage energy efficiency across the full array of American business and citizens,” Romney wrote. “It would provide industries of all kinds with a predictable outlook for energy costs, allowing them to confidently invest in growth.” It’s a plan that Mankiw might well have written himself. And then in the heat of this presidential campaign, Romney abandoned it.
Katy O’Donnell contributed.
My view is that the balance of the probabilities is that the Romney we would get would be 90% the Romney currently running for President and 10% the Romney advised by Mankiw and Hubbard and company. In part, I think, this reflects a difference between Democratic and Republican administrations. There are, in the academic community, numbers of stories of academic economic advisors during Democratic administrations--Obama, Clinton, Carter--waging intellectual and bureaucratic wars within the corridors of power against interest groups, political advisors, bureaucratic process guys, and the president himself in an attempt to convince the president and his inner circle that their policies were destructive. They lost, usually, but their adversaries knew that they had been in a fight.
There is only one such significant story about academic economic advisors during Republican administrations: Martin Feldstein in 1982-1984.
I remember one senior sub-cabinet Democratic official muttering to me and to their other spear-carriers as we crossed the parking lot from the OEOB to the West Wing:
I could go back to my house. I wouldn't have to live in this [WASHINGTON NEIGHBORHOOD] dump. I could go back to my life!
Today would be a good day to get fired.
It's not Thašuka Witko: "Hóka-héy! Today is a good day to die!" (Although it is as close as we economists can get.) But it is an attitude you need in your advisors if you are going to have a chance of rational technocratic policies. And for reasons I don't understand, the Democratics today seem to have more of it…