If there is one blessing in the Republican presidential contest
so far, it is that no one serious candidate has been eliminated.
That means a longer debate with more emphasis on issues that matter
to John and Jennifer Q. Voter. Like, say, the economy.
In no state is the economy more important than in that snowy
Mitten, Michigan, which has a primary coming up tomorrow.
Fortunately, one expatriate from the state, Massachusetts’s Mitt
Romney, still has enough capital, both venture and political, to
lead the charge for the kind of economic changes that would play
well there and across the country.
Why? Because globalization is going to be a serious issue in
this election, with claims that China and other low wage countries
are stealing everything from our jobs to our firstborn children.
For the first time, this is not just a fringy Democratic issue,
championed by class warfarists like John Edwards. Mike Huckabee,
for one, argues that the world trading system is tilted unfairly
away from the United States. Many rank-and-file Republicans, and
even a few old party hands, nod their heads in vigorous
agreement.
The issue isn’t as simple as a binary choice between free trade
and protectionism. Recent research suggests that workers do not
swiftly reallocate between industries. This is a problem that,
fortunately, can be addressed in a number of ways. Most candidates
have come around to backing some sort of increased income and
training assistance for workers who’ve been displaced by
international competition, but those measures are only a salve.
Mitt Romney and John McCain both advocate innovation and
research and development credits to supplement their defense of
free trade. This seems sensible. Foreigners will buy American
products only when we create the best products available at the
right cost.
Given the high wages we pay to our well-educated workforce, this
will only occur if America is on the cutting edge. One needs look
no further than Boeing to see how this works. The company
innovated, big time, and is currently backlogged with orders until
2015.
Encouraging innovation and research is a far cry from more
left-leaning solutions, whether vigorously espoused by the son of a
North Carolina mill worker, or slowly approached by that bass
thumpin’ Baptist minister. Increased trade protections, even minor
ones, will only delay necessary innovation.
The current state of the U.S. Steel Industry shows how temporary
protectionist measures, also known as “safeguards,” have done
next-to-nothing to expedite adaptation to globalization. Duties and
tariffs will do nothing to bring back firms and jobs that have
already vamoosed. And more serious measures, like canceling or
rewriting NAFTA, would be utterly disastrous.
Superficially, McCain and Romney take similar approaches to
these issues, but Romney is much more likely to actually follow
through. He has made a fortune for himself by taking over
organizations in financial trouble that have fallen out of favor
with consumers. The U.S. comes eerily close to this
description.
Innovation is Romney’s motivation and his mantra. Unlike our
current CEO-in-chief, he actually craves information, not opinion;
analysis, not conjecture. More often than not, he has succeeded.
And one Romney virtue that often goes unmentioned is that he
actually admits to making mistakes and learns from them.
Mitt also has a long and credible history of improving the
efficiency of organizations, and is the only candidate that
intelligently advocates streamlining of government agencies and
services. He advocates tax cuts, most of which are targeted at
middle income and other ready to spend Americans. This is
characteristically spun as an attempt to “starve” government
services. The charge assumes that the process itself can’t be made
more efficient, and ignores basic incentives that are the catalyst
for more efficient organizations. It’s possible that we could
provide the same or greater services subject to a lower tax burden,
with the right leader to spur that change.
McCain has no background in business and tends to bridge
economic issues with other issues. He recently invoked
“Judeo-Christian values” as the motivation for helping struggling
workers. The speech was given in the strongly religious
western-half of Michigan, but it’s unclear what religious values
have to do with the economy. Maybe he wants to follow unemployment
all the way to the gates of hell.
That approach might work for other issues, or in states in which
the economy is not suffering. But will it sell in a state that
demands serious solutions, against an opponent who can back up his
talk with experience and proven results?
