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Mitt Romney's got a plan

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The first few paragraphs of Mitt Romney's job-creation proposal read like the introduction to a particularly boring segment on the Hannity show ("Almost every action the president has taken has deepened and lengthened the downturn"). But get past them, and Romney does something that most Republicans have shied from lately: He's outlines an actual economic agenda.

Here it is:

To give an immediate boost to jobs and investment, permit businesses to write off in 2010 and 2011 the capital investments made in those years rather than over time. Aggressively negotiate and sign trade agreements with other nations to promote American exports. Adopt an energy policy that will actually eliminate our dependence on OPEC and hostile states. Preserve our balanced labor-management rules and regulators. Rather than raising the tax on investment dividends, eliminate it and the tax on capital gains and interest for all households earning less than $250,000 a year.

Reshape government programs to ultimately put spending in balance with revenues. Restructure entitlements to make them fiscally sustainable, honoring our commitments to seniors. Rather than opening the door to ever-increasing demands from states for bail-outs, take action to enable the states to solve their unfunded pension obligations. And tame the growth of government by limiting the political power of public employee unions.

You can separate this into a few buckets: mostly regressive tax cuts that might spur economic growth; massive legislation with huge implications but no details or obvious paths to passage (trade agreements, entitlement reform, energy bill); and cuts to public-sector jobs that will raise the unemployment rate. But you know what? Good for Romney. This is actually an agenda, which means we can actually talk about it.

And one thing I'd note is that this seems certain to hugely increase uncertainty. A new energy bill? Uncertainty, both during the legislative process and the regulatory definitions process. New tax proposals? Uncertainty during the long legislative process; you don't want to make capital gains decisions if you the capital gains tax rate might change pretty soon. Forcing deep budget reforms on the state level? Uncertainty, as businesses don't know what the cuts will mean for demand or infrastructure.

Now, that may all be acceptable: I'm not a big believer in the uncertainty argument, and if good policy requires a period of uncertainty, then fine. But since Romney says that the private sector is currently "paralyzed by the uncertainty," it's not clear to me how pushing a lot more uncertainty into the mix would help. All that said, I appreciate Romney's tentative specificity. Actually saying what you would like to do to help the American economy is, well, presidential.

By Ezra Klein  |  August 18, 2010; 4:31 PM ET
 
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Comments

"But since Romney says that the private sector is currently "paralyzed by the uncertainty," it's not clear to me how pushing a lot more uncertainty into the mix would help. "

Because SHUT UP THAT'S WHY.

Posted by: lol-lol | August 18, 2010 5:01 PM | Report abuse

It's not real uncertainty, in which things could go your way, or go against you.

It's a special kind of uncertainty where you know things could go your way, or really go your way.

Romney's key constituency -- his owners/shareholders, as every Republican presidential campaign is basically an IPO -- can guarantee it will go their way. It's the rest of us who will get boned.

Posted by: davis_x_machina | August 18, 2010 5:14 PM | Report abuse

And tame the growth of government by limiting the political power of public employee unions.

------------------------


where do i campaign for this guy???

Posted by: visionbrkr | August 18, 2010 5:20 PM | Report abuse

Accelerating deductions of capital spending might have merit. It would give an incentive for companies to spend sooner rather than later. It's also revenue-neutral over time, because it's just trading current tax revenue for future tax revenue.

Posted by: tl_houston | August 18, 2010 5:48 PM | Report abuse

visionbrkr,

The only "power" that public employee unions enjoy is the power ceded to them by the employers.

When labor and management enter into a collective bargaining agreement, neither side has a gun to their head, and each party to the agreement enjoys limited leverage in the bargaining that yields the final agreement.

So it is easy for Romney to say that there should be "limits" on the power of unions. But what ~exactly~ does that mean? Passing right to work laws? Outlawing strikes by public employees?

Those sorts of measures exist in some states, but in order to get there the citizenry of any particular state (for example: New Jersey) which does not currently have such measures will have have to form a new consensus, and express that consensus in the voting booth and through their elected representatives, after hearing arguments pro and con about the proper rights of organized labor in the government sphere.

This sort of vague generality from a national politician means absolutely nothing.

On the broader topic: GREAT catch, Ezra, about the complete silliness of blaming economic stagnation on uncertainty about future policy, while at the same time proposing significant policy change.

Posted by: Patrick_M | August 18, 2010 6:51 PM | Report abuse

I don't mind the accelerated write off of capital spending although I'd keep it to the 3rd and 4th quarters of 2010 (we'll see if 2011 needs help).

I'd couple it with a fat subsidy for hiring the unemployed into new positions. I realize that it's indirect and inefficient and subject to a fair amount of cheating but I don't mind bribing employers right now. Boosting consumer confidence is crucial.

Posted by: Jamesaust | August 18, 2010 8:37 PM | Report abuse

Patrick,

I'm from NJ. The only poltician I like more than Romney now is Christie. He DID put the public unions in their place and State Senator Sweeney said as much and he's the leader of the Democrats. They have at least slowed the rate of public unions bankrupting our state. He is beloved in NJ for a Republican. If he ran again today he'd win in a landslide.

http://www.pollster.com/polls/nj/jobapproval-govchristie.php

And as you know NJ has already voted for that change. NJ actually does have change I can believe in.


"This sort of vague generality from a national politician means absolutely nothing."

Kind of like "hope and change" from some guy running for President in 2008? Is there anything MORE vague? To Christie's credit he's actually changed NJ a lot more than Obama has changed American although I'd admit its much easier to change a single state than a country.

In NJ we're kind of sick and tired of bloated government workers taking pensions at the age of 50 after having worked 20+ years and making $300k for the next 30 years after that. We're fed up and we're not going to take it anymore and we showed it in who we voted for this past November for Governor in an extremely blue state.

Posted by: visionbrkr | August 18, 2010 8:47 PM | Report abuse

"In NJ we're kind of sick and tired of bloated government workers taking pensions at the age of 50 after having worked 20+ years and making $300k for the next 30 years after that. We're fed up and we're not going to take it anymore and we showed it in who we voted for this past November for Governor in an extremely blue state."

I get all of that, visionbrkr, but I also think that if a politician wants to campaign on making unions less powerful, that's great, but it means nothing to me until that politician explains what concrete steps he or she will take in order to achieve that objective. Saying you want to make unions less powerful (without saying how) is a bit like saying you have a secret plan to win a war, or that you will achieve savings to balance the budget without saying how.

As for "hope and change" those were the thematic buzzwwords, but the campaign that used them had a rather detailed platform, and has made efforts in office to achieve most of the agenda items in that platform. In the likely event that Romney is a candidate in 2012, we'll hopefully hear the details, but so far it seems like a hollow crowd pleaser rather than any actual plan, and the same can be said for the rest of the items on the list (negotiate treaties that boost American exports! ... yes that would be good, but how exactly do we strike deals to get people to buy more of our stuff without us buying more of theirs?).

Read the entire (short) boston.com piece that Romney wrote. It is a nice wish list; it certainly is not a plan

Posted by: Patrick_M | August 18, 2010 9:12 PM | Report abuse

"I get all of that, visionbrkr, but I also think that if a politician wants to campaign on making unions less powerful, that's great, but it means nothing to me until that politician explains what concrete steps he or she will take in order to achieve that objective."


You know its funny because Christie was mocked during his campaign for not having valid ideas. Then all he did was go out during his first 9 months and do the below. I wish Ezra would do a story on him or at least speak to him. He's not a very good speaker from what I can tell but he sure as heck gets the job done. Here's just a couple of news items where Christie shows how politically savvy he is. I guess its not tough if you're being compared to Jon Corzine (about as tough when you're compared to GWB.)

http://www.nj.com/news/index.ssf/2010/07/gov_christie_tackles_nj_gaming.html

http://www.nj.com/news/index.ssf/2010/08/nj_gov_chris_chrities_tackles.html

Posted by: visionbrkr | August 18, 2010 10:32 PM | Report abuse

--"When labor and management enter into a collective bargaining agreement, neither side has a gun to their head"--

You're lying, Patrick (and it's "its head".)

The government points its gun at the employer's head and says, "You are required to deal with these people who are holding your business hostage."

Posted by: msoja | August 18, 2010 10:41 PM | Report abuse

Romney's plan is a good proposal for the long-term. Actually, it is closer to what Democrats propose than the vocal nuts in the Republican party propose. The devil is in the details, but that is the bread and butter of politics.

I would like to know what Romney proposes for the short-term, however. Nothing he proposes will do much for a couple of years after it's enacted (except for the investment depreciation in 2011 - let's face it, 2010 is almost gone). I'd rather see a flat-out tax credit for every permanent job created in the US.

Posted by: AMviennaVA | August 19, 2010 8:29 AM | Report abuse

'I get all of that, visionbrkr, but I also think that if a politician wants to campaign on making unions less powerful, that's great, but it means nothing to me until that politician explains what concrete steps he or she will take in order to achieve that objective. Saying you want to make unions less powerful (without saying how) is a bit like saying you have a secret plan to win a war, or that you will achieve savings to balance the budget without saying how. '

What should happen is their immediate dissolution and then public sector unions should be outlawed. There's simply too much conflict of interest otherwise.

The problem is simple. The public can vote out a man like Jon Corzine, and we did. Unfortunately his sweetheart deals for the unions remain.

Combine this with the fact that politicians can enact future liabiilities at a heavily discounted 8%+ rate, minimizing current costs.

Combine this with the fact that the state can engage in SEC fraud without financial penalty.

Or combine this with the fact that is illegal by the state constitution to borrow for operating expenses, but a previous politican was allowed to do it anyway.

Posted by: krazen1211 | August 19, 2010 9:46 AM | Report abuse

krazen1211,

well in poor Jon's defense its hard to be tough with unions when you're in bed with them, LITERALLY.

http://www.nj.com/news/index.ssf/2010/08/former_nj_gov_jon_corzine_carl.html


As I've said before its not tough at all to be a better leader than Corzine. How in God's name did this joker run Goldman Sachs? Oh i forgot he was our senator for a while too. Pathetic.

Posted by: visionbrkr | August 19, 2010 10:17 AM | Report abuse

Public sector unions simply need to be eliminated by legislation.

There is simply too much conflict of interest.

Posted by: krazen1211 | August 19, 2010 10:50 AM | Report abuse

"A new energy bill? Uncertainty, both during the legislative process and the regulatory definitions process."

Unlikely to be THAT kind of energy bill. More likely to be a Palin-esque "drill, baby, spill". Oops, I meant don't spill.

Posted by: staticvars | August 19, 2010 10:54 AM | Report abuse

"But you know what? Good for Romney. This is actually an agenda, which means we can actually talk about it."

As a Democrat, I've viewed Romney as the Republican candidate with potentially the best odds of defeating Obama in 2012. His ability to speak to policy issues in a direct, actionable manner seems most likely to pull in independents and disgruntled centrist Democrats.

Thankfully, however, he'll never make it through the GOP primary due to a hazy past with regards to the right wing social issues, Romneycare, and the fact that he is Mormon.

Posted by: ahduth | August 20, 2010 8:14 AM | Report abuse

If you want to limit the political power of public employee unions (or private sector unions) you simply do one thing. Pass legislation which allows any employer (in the case of public employees it would be taxpayers) to fire workers who unionize. Collective bargaining (especially in public employee unions) is ruining state budgets.

Posted by: kingstu01 | August 20, 2010 12:53 PM | Report abuse

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