ONTD Political

The Keynesian Case for Romney

4:17 pm - 06/04/2012
Even if you disagree with every one of Mitt Romney’s policies, there’s a chance he’s still the best candidate to lift the economy in 2013.

That’s not because he has business experience. His work in private equity surely taught him important lessons, but his agenda is indistinguishable from that of career politician Paul Ryan. Nor is it because he’s demonstrated some special knowledge of what it takes to create jobs. Job growth in Massachusetts was notably slow under Romney’s tenure. It’s because if Romney is elected, Republicans won’t choose to crash the economy in 2013.

The Congressional Budget Office estimates that if Congress gridlocks this year — if it simply gets nothing done — the economy will take a $607 billion hit in 2013 as the Bush tax cuts expire, the payroll tax cut expires and assorted spending cuts kick in. Falling off that “fiscal cliff,” they predict, will throw us back into recession.

But it’s worse even than that: Speaker John Boehner has said that he will “welcome” the 2013 debt ceiling as an “action forcing event.” Translation: He wants another debt-ceiling showdown. According to Gallup, the last one led consumer confidence to fall by even more than it did after the collapse of Lehman Brothers. This debt-ceiling fight would be on top of the economic chaos Congress caused by pushing us over the fiscal cliff. It would be a Lehman-like event.

Miles Nadal, CEO of the marketing and communications firm MDC Partners, says that at a recent event with executives of more than 100 companies, the business leaders were panicked about this possibility and clear on the best outcome for the economy: “a Republican landslide.” Why? “Because anything that breaks the logjam is positive,” he says. “The quality of the leader is less relevant than the ability to break gridlock.”

There’s no reason to believe Romney could “break” gridlock. But there’s reason to believe he wouldn’t face it in the first place. Republicans control the House. They’re three seats from controlling the Senate — and, because this Senate election follows 2006, which was a wave election for Democrats, Republicans are defending 10 seats while Democrats are defending 23. It’s difficult to imagine a scenario in which Romney wins the White House and Republicans don’t control the House and Senate. On the other side, while it’s not impossible to imagine President Obama winning the White House and Democrats taking back the House, it’s unlikely.

Even if Romney and the Republicans exceed expectations, they’re not likely to reach 60 seats in the Senate. But they won’t need them. The major issues on the table are budgetary. That means they can be considered using the budget reconciliation process, which can’t be filibustered. So if Republicans can maintain party unity — and they usually can — they’ll be able to govern effectively. And there’s no way that they’ll permit the Bush tax cuts to expire or the debt ceiling to lapse. Investors, knowing that, would likely stop worrying about the debt ceiling the moment a Romney win became clear — and they’d be right to do so.

Now, Republicans could still push the economy into recession if they pass an immediate austerity budget that slashed spending in 2013. And, given Republican rhetoric about how slashing the size of government will lead to more growth because the confidence fairy will come out and persuade businesses to spend more, you might think that’s exactly what they’ll do.

But Romney, though he often buys into that sort of nonsense while criticizing Obama, knows better. Time magazine asked him about cutting spending in 2013. “If you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent,” Romney said. “That is by definition throwing us into recession or depression. So I’m not going to do that, of course.” You couldn’t have gotten a clearer definition of Keynesian budgeting from Obama.

There’s a good chance that a Romney administration would extend both Bush and Obama’s tax cuts and delay the scheduled spending cuts. Congress would raise the debt ceiling after Romney promised congressional Republicans that he’d sign some variant of Paul Ryan’s budget as soon as it’s sent to him. Somewhere along the way, Romney would pass both more short-term tax cuts and a long-term transportation bill — something Republicans have been blocking under Obama — that doubles as an infrastructure package and includes, to secure Republican support, the Keystone XL oil pipeline.

Nor is it clear that this will come at the cost of harsh deficit reduction in coming years. There will almost certainly be deep spending cuts if Romney is president, but both the Romney and Ryan proposals include trillions of dollars in unpaid-for tax cuts and defense spending. If Republicans decide to assume that deep tax cuts will lead, through supply-side magic, to larger revenues, their deficit-reduction plans might well end up increasing the deficit over the next few years, even if it does so in a regressive way. Remember, wrote Business Insider’s Joe Weisenthal, “Republicans were pro-deficit, and pro-entitlement expansion under Bush and Reagan. Deficit cutting only became part of the party’s ideology under Obama.”

Compared to anything Obama is likely to get from a Republican House, that is, at least in the short term, a much more expansionary, Keynesian approach. But it’s also an awful precedent. In a sense, Republicans are holding a gun to the economy’s head and saying, “vote for us or the recovery gets it.”

That might well prove an effective political strategy: The more they say that they’re willing to let the debt ceiling expire and the economy run over the fiscal cliff, the more businesses will pull back and households will stop spending in order to make sure they have enough cash on hand to ride out another crisis. That will further depress the economy this year, making it more likely that Romney wins, and that Republicans embrace the smooth Keynesian glide path that they’re denying Obama.

We are seeing the logical conclusion of a system biased toward gridlock: The out-party benefits when the public feels that Washington is failing and it often has the power to make Washington fail. Which, arguably, leads to another unusual formulation: Even if you agree with Romney’s policies, it may be that voting for Obama, and delivering a clear verdict against the GOP’s economic brinksmanship, is the only way to break the cycle of gridlock going forward.

So which are you more worried about? The fiscal cliff and the debt ceiling? Or the political system?


OP: Of course, what isn't stated here is that a Romney administration in the hands of a full blown GOP House and Senate would also send our country, morally and socially speaking, back to the Dark Ages. Our country is *already* filled with theocrats, misogynists, bigots, luddites, and homophobes, nearly all of whom are Republican. Putting them into complete power would be a disaster for our country, to say the least.
kishmet 4th-Jun-2012 09:57 pm (UTC)
Your comment pretty much sums up my (horrified) thoughts, OP

Aside from 'WHAT THE FUCK HAPPENED TO BY THE PEOPLE, FOR THE PEOPLE' God fucking dammit, Repubs, get out of politics if you won't do your goddamn jobs
zhiva_the_mage 5th-Jun-2012 06:13 am (UTC)
I think their definition of "people" is narrower than yours.
pennylane101 5th-Jun-2012 03:10 pm (UTC)
i approve
meran_flash 4th-Jun-2012 10:35 pm (UTC)
Welcome to the Reagan administration.

Edited at 2012-06-04 10:40 pm (UTC)
amyura 5th-Jun-2012 02:19 am (UTC)
brucelynn 4th-Jun-2012 10:50 pm (UTC)


This cannot happen, I pray pray that my country is not this stupid!!!!

Romney is such a scumbag btw
cyranothe2nd 4th-Jun-2012 10:57 pm (UTC)
Dammit, now I watch to watch all the Jizz episodes again...
mollywobbles867 5th-Jun-2012 12:15 am (UTC)
magus_69 5th-Jun-2012 02:01 am (UTC)
This GIF is truly outrageous, truly truly truly outrageous.
dustbunny105 5th-Jun-2012 07:02 am (UTC)
cyranothe2nd 4th-Jun-2012 10:54 pm (UTC)
I love how the author acts like the "fiscal cliff and debt ceiling" and the "political system" are somehow separate entities, instead of completely entwined. The economy is embedded in social and political systems, asshole. Read some Karl Polanyi and GTFO with your right-wing, Keynesian nonsense.
lone_concertina 4th-Jun-2012 11:25 pm (UTC)
If you knew anything about Ezra Klein, you'd know how far he is from "right-wing, Keynesian nonsense." But okay.
bees_beads 5th-Jun-2012 03:53 am (UTC)
Also, modern American conservatism is pretty much incompatible with the majority of Keynesian thought...
lovefifteen 6th-Jun-2012 03:55 am (UTC)
yeah, wtf, Keynesian economics advocate government intervention or am I missing something here...??
nesmith 4th-Jun-2012 11:16 pm (UTC)
That's what I got as well, which is definitely one of the shittiest justifications for voting for Romney.
skellington1 5th-Jun-2012 01:13 am (UTC)
Slightly more specific -- "Pick Romney, because his party will hold the country hostage otherwise" is more accurate.
effervescent 5th-Jun-2012 01:42 am (UTC)
Kinda, until you get to the very last paragraph where they then say that it's either that or Obama needs to win by a landslide.

Idk. The US political system scares the crap out of me atm.
hinoema 5th-Jun-2012 05:08 am (UTC)
Which is essentially the excuse of bullies and abusers. Do what we want and we won't have to hurt you.
sakuraberries 4th-Jun-2012 11:16 pm (UTC)
the economy will take a $607 billion hit in 2013 as the Bush tax cuts expire

Okay, so, bearing in mind that I am absolute crap at econ (could never fully wrap my brain around the concepts of it) why would the economy take a hit as the tax cuts expire? Wouldn't the economy, in fact, improve as folks (especially the 1%, the ones who benefited more from the tax cuts in the first place) began to pay more taxes?
moonbrightnites 5th-Jun-2012 12:15 am (UTC)
This was my question as well.
anolinde 5th-Jun-2012 12:18 am (UTC)
I'd assume the idea is that people would have less disposable income, and therefore less money to spend, so businesses, etc. would theoretically take a hit.
awfulbliss 5th-Jun-2012 01:31 am (UTC)
What would that improve about our economy?
sakuraberries 5th-Jun-2012 01:50 am (UTC)
Well...the government rakes in more money, no? Is that not the basic idea? >.>

probably nothing in econ is as simple as I'm making it out to be; I seriously need to get an Econ for Dummies book or something
mutive 4th-Jun-2012 11:16 pm (UTC)
You know, The Economist stated a while back (as is during the McCain/Obama election) that it may actually be *good* to have two different parties in power, the idea being that while they could gridlock each other, at least they both had someone who could stop them from doing incredibly stupid stuff. (I'm paraphrasing, but that was the general gist.) As such, it would make a fair amount of sense to say, "If the House and Senate are going to be Republican, make sure that Obama wins just so that the Republican party can't do something incredibly stupid (like outlaw birth control)."
sakuraberries 4th-Jun-2012 11:22 pm (UTC)
But doesn't that also mean that nothing ever really gets done, since these two opposing factions keep blocking each others' every move?
lone_concertina 4th-Jun-2012 11:27 pm (UTC)
Yes. The only reason anything of note passed in the first half of Obama's term was because all three were D-controlled. And the only reason we have constant gridlock now is because Dems lost the house and almost lost the senate.
mutive 5th-Jun-2012 01:51 am (UTC)
Well, not necessarily. The idea proposed in the article by The Economist is that stuff *does* get done if there's overwhelming public approval or disapproval one way or another. (i.e. if the vast majority of the country thinks something needs to happen, the sides will find a way to work together) But it does take a struggle or compromise. (Which both sides need to be willing to accept.)

It's good and bad. But that's part of being a Republic. (Totalitarian systems actually have certain advantages in this way - they can say "look, the world would be better if we, say, taxed people who drove during rush hour to reduce traffic during peak periods" and put the system into place even if it's wildly unpopular - see Singapore. But they're also more prone to *bad* knee jerk decisions, too - such as outlawing Majong or temporarily banning various publications.)
romp 5th-Jun-2012 05:30 am (UTC)
people complain about that when there is no majority in Ottawa but it's a hell of a lot better than one party being in the majority if they're intent on blocking human rights and selling natural resources
skellington1 5th-Jun-2012 01:28 am (UTC)
IIRC, that's actually the whole idea of the Senate. The founders saw the house as a place where a lot of new legislation comes up, and the senate as the place where most of it was stopped.

And while I don't find it ideal, I totally agree -- keep some balance so we don't end up regressing back to the dark ages.
mutive 5th-Jun-2012 01:48 am (UTC)
Yeah. I mean, there are challenges to that system. (Like that change happens slowly, if it happens at all - there are certain advantages to a system where someone can say, "Look, this is silly" and have it be done. But those systems also tend to be totalitarian.) But it *does* tend to mean that crazy, knee jerk stuff is *less* likely to happen than it would be in a one party system. (Or a system without similar checks.) So...yeah, I'm probably going to come down on the side against this article...
skellington1 5th-Jun-2012 02:03 am (UTC)
Yeah, it's not perfect, but... no one's found a system that IS. And I'm going to stay on the side of "Not going to hell in a handbasket" even when it frustrates the hell out of me that we could be doing so much more.
mollywobbles867 5th-Jun-2012 12:20 am (UTC)
So...the logic here is to ensure free reign to a party that plans on purposely doing things to fuck up the economy even more if they don't get their way? So, basically proof that Republicans are bullies?

celtic_thistle 5th-Jun-2012 03:59 am (UTC)
mte, Cersei.
anyone625 5th-Jun-2012 12:55 am (UTC)
So Ezra is saying Republicans are terrorists and America should capitulate to them? It's hilarious, disturbing, and telling that this is apparently a sincere pro-Romney article in the Washington Post. LOLWTF
aviv_b 5th-Jun-2012 12:57 am (UTC)
So basically, he's saying we should reward bad behavior, because if we don't, the Republicans will behave even worse.

astridmyrna 5th-Jun-2012 01:27 am (UTC)
Even if you disagree with every one of Mitt Romney’s policies, there’s a chance he’s still the best candidate to lift the economy in 2013...It’s because if Romney is elected, Republicans won’t choose to crash the economy in 2013.

That is seriously the stupidest fucking excuse to vote for Romney I've ever fucking read in my entire life. Excuse me as I wash each one of my brain cells with Oxyclean, bleach them with Clorox 2, throw them in the dryer, and then repeat the process until every last speck of this inane clusterfuck of fail has is out of my brain and on its way to the sewers.

Edited at 2012-06-05 01:30 am (UTC)
keestone 5th-Jun-2012 06:53 pm (UTC)
Particularly since it isn't, "because if Romney is elected, Republicans won't choose to crash the economy in 2013", it's "If Romney is elected, Republicans will crash the economy any way they choose instead of just being obstructionist about everything the Democrats try to do in 2013".
effervescent 5th-Jun-2012 01:45 am (UTC)
This is so bloody ridiculous. Basically, vote for the Repubs or they'll throw a temper tantrum and not let Obama get anything done? I don't understand why more people aren't furious as them for the crap they've pulled.
furrygreen 5th-Jun-2012 02:08 am (UTC)
It’s because if Romney is elected, Republicans won’t choose to crash the economy in 2013.

Yeah. You know... I'm kind of speechless. How does this sort of statement get put into an article as a plus? I mean, how can you say this (which is treason, in my eyes) and not have an angry mob around your office and another around the people doing this?

It's utter BS. Can you imagine this philosophy in any other situation? "Oh, I took my BF hostage for a million dollars. Yeah, I let him go after I got the unmarked bills. The feds said no problem-o. We're all cool here."
hinoema 5th-Jun-2012 05:12 am (UTC)
Yeah, they seem to overlook the people whose lives owuld be ruined if they do that.
amyura 5th-Jun-2012 02:22 am (UTC)
Wow, that sounds like everything that, as a parent, I'm told by everyone NOT to do. Your kid's being a little shit and demanding you give in? Well, you better do it, because the tantrum she'll throw if you don't would REALLY suck.

nightfury 5th-Jun-2012 02:42 am (UTC)
I'm almost confused by this article because the author's premise is to convince voters why Romney is the best candidate to lift the economy, but the reasoning presented is so backwards and ridiculous that it's hard to believe this isn't sarcasm.
hinoema 5th-Jun-2012 05:04 am (UTC)
It's because if Romney is elected, Republicans won't choose to crash the economy in 2013.

That's not a case for Romney, aside from the possibly analogous "Youse gives me some money and your pretty shop won't have a sudden axidental fire" sort.

No, it's a perfect reason to eradicate the rabid weasels causing this situation in the first place.
romp 5th-Jun-2012 05:59 am (UTC)
The Repubs wouldn't aim to crash the economy as they sold off the US. The fact that rising costs would impoverish most everyone is just a bonus.
apostle_of_eris 5th-Jun-2012 09:59 pm (UTC)
if Romney is elected, Republicans won’t choose to crash the economy in 2013
No, they'll be too busy eating the seed corn to "choose" anything.
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