Mitt Romney's Break With GOP Leaders On Economics Only Lasts A Minute
Republican legislative leaders have achieved a remarkable message discipline in their caucus. Almost no one in the GOP acknowledges the lack of demand — that is, the lack of customers for businesses small and large — as the primary obstacle to job growth. They point instead to economic uncertainty as the driving force behind slow hiring.
At least, Republicans in Congress do. Yesterday morning one of the party's front-running presidential candidates contradicted that orthodoxy. Asked to explain his critique of President Obama's economic views on MSNBC yesterday, Mitt Romney alleged that "he doesn't understand how the private sector works." What in particular does the president not understand? Demand!
ROMNEY: The president thinks that if you have cash on your balance sheet that means you're gonna go hire people. No, you hire people if you have customers. The president doesn't understand what makes the American economy go. I do.
Of course, President Obama's entire approach to the economy has focused on creating more customers so that businesses will have reason to hire. As an attack on the president, this is silly. But it puts some daylight between Romney and his party, which has misdiagnosed the problems with our economy today despite overwhelming evidence from economic experts and business owners alike that weak demand is the single biggest drag on hiring today.
However, despite the different diagnoses, Romney shares one thing with GOP legislators: His prescription doesn't make much sense. Where congressional Republicans have failed to explain how lower taxes and fewer regulations will spur hiring, Romney told the MSNBC crew that the answer to our demand problem is to attack it from the supply side. "You say, alright, we're going to make sure our employer tax rates are competitive globally," Romney said, adding that we need "regulators and regulations [to] encourage the private sector rather than crush it."
Pat Garofalo of ThinkProgress explained yesterday why this is foolish:
Corporations are already sitting on hoards of cash, and it's unclear how receiving more cash via tax breaks translates into more customers. It also terribly unclear how fewer regulations — which at the consumer level give people confidence that the products they're buying won't harm them or make them sick — translates into more purchasing power.
When Washington Republicans suggest these things, they're at least being consistent with their own misdiagnosis of the problem. When Romney says it just moments after correctly identifying demand as the problem, it sounds a lot like pandering.