02.13.2013 0

Romney never won on the economy

Mitt RomneyBy Robert Romano — As a part of the fallout of Obama’s successful reelection in 2012, many in the Republican establishment and conservative circles have been engaged in a thorough soul-searching over Mitt Romney’s defeat and the GOP’s failure to recapture the Senate, some of which is legitimate and thoughtful, and some of which is not.

Some linear-minded approaches focus on, for example, expanding Hispanic outreach, and advocate a more open-ended immigration policy, favoring amnesty for illegal immigrants. Others have focused on the left’s successfully waged “Republican war on women” campaign as a leading cause of defeat.

Perhaps a better question might be why, with historically high unemployment, slow economic growth, skyrocketing debt, and no specter of coming out of the depression the GOP managed to lose, despite the economy being the central theme of their standard bearer’s campaign. For, there is a lesson to be learned, and it’s not on how to get off message from the real issues facing this nation.

For Obama’s part, his challenge in 2012 was to find enough voters on the margins who cared more about targeted wedge issues — basically, everything except the economy — that might drive people to the polls. Ads were then driven into particular markets to find those voters.

For example, anecdotally, the “war on women” played heavily in Northern Virginia, an area with a strong younger female adult demographic, where this author resides, but Virginians never really saw an effective television ad response by the Romney campaign driven at the female audience in those same timeslots. Did Team Romney simply have nothing to say to those people?

Perhaps that was part of the problem.

Say something. In Romney’s case, he simply never responded to repeated attacks except to make personal testimonials a feature in his convention that never penetrated any of the markets described above. By the time he got around to responding, the damage had already been done, and nobody was paying attention.

The “war on women” and other allegations such as being a Wall Street insider all became charges unanswered, claiming the territory of truth in the minds of voters.

As for the weak economy, Romney’s vital campaign theme, it is hard to make the case that he ever won the essential messaging war anyway. Whether true or not, Obama’s central claim was that he would not go back to the same policies that got us into this mess.

Romney had no effective counter to that message. He supported bailouts and never really denounced the easy credit policies at government institutions Fannie Mae, Freddie Mac, and the Federal Reserve that helped caused the crisis. Obama fell into the same camp ideologically, but burdened by a candidate who seemingly agreed with the Administration on the most important economic issue, Republicans couldn’t hold Obama accountable for his stance.

In addition, Romney was successfully portrayed without much response with the Wall Street stereotype that helped create the crisis. Taking a contrary view on bank bailouts could have shown him to be independent, a real capitalist who would no longer socialize losses.

Here is where some of that aforementioned soul-searching would have come in handy.

Because, in 2010, the tea party helped Republicans develop a successful counter to the charge they had caused the crisis — by purging as many establishment Republicans who were perceived as being a part of the problem as possible from the ballot through the primary process, thereby remaking the party in the eyes of voters. They promised that this time would be different if Republicans retook Congress.

In short, the bailouts and the government policies that created the credit crisis were renounced. Or, so we thought.

Romney never adopted that mantle, nor did he really take on the tea party’s associated set of issues in 2012 when he ran. He couldn’t reform his own views on bailouts and our credit card economy, so how could he reform the government that perpetuated that system?

In the process, Romney never presented an agenda that actually addressed what ails the economy. Hardly a mention of the housing bubble.

To hear Romney tell it, oil drilling restrictions and Obamacare (which was not even fully implemented) were the cause of high unemployment.

Certainly those things didn’t help, but as a career investor, Romney should have been able to answer the question of how the financial crisis and then recession happened in short order: A government-created credit bubble that when it popped, took trillions of wealth with it. Nor did he explain what steps might be taken to prevent another crisis.

Romney missed every opportunity to take advantage of a weak incumbent who had offered more of the same — more government credit pushed at housing, education, and health care — as the prescription to curing a credit crisis.

The problem was, like the individual health care mandate, again, Romney supported the bailouts. Because of that failing, he never mentioned how the Federal Reserve under the Obama Administration bought overall $1.25 trillion of mortgage-backed securities with printed money, including $442 billion that was given to foreign banks as a gift.

Romney made little to no case on how Dodd-Frank failed to address the primary causes of the government credit-driven crisis, causes which he, again, failed to identify on the campaign trail.

The point is the financial crisis, being central to the current state of the current economy, should have been central to Romney’s economic message in the campaign. It wasn’t and so the campaign itself was devoid of reality. This was no minor detail. Failed financial and monetary policy wrecked the economy. What was Romney going to do about it? Apparently nothing.

This aided the Obama campaign’s claim that it wasn’t his fault the economy had tanked, it was his predecessor’s. In the end, voters did blame Bush, and it is hard to argue that Romney gave them enough reason not to.

A true leader could have and would have overcome this challenge. Sen. Marco Rubio certainly had no problem with this in his response to Obama’s State of the Union Address.

At point-blank range, Rubio was able to succinctly identify how we got here: “This idea — that our problems were caused by a government that was too small — it’s just not true. In fact, a major cause of our recent downturn was a housing crisis created by reckless government policies.”

Was that so hard?

By ignoring debt dynamics, Romney failed to explain the true state of the economy to voters.  In that sense, Republicans are not appealing to the center by educating them — to say nothing of communicating well with their own base, who are well aware of the government’s role in the credit crisis.

Now, the Republican establishment is engaging in a wholesale rejection of the worldview that helped them win in 2010. To date, it has not addressed our deteriorating fiscal situation with any great effect. How do we know?

The $16.5 trillion national debt, now larger than the entire economy, continues to grow practically unabated, despite the fact that all appropriations constitutionally must originate in the House of Representatives, which Republicans control.

Notwithstanding the plunder that occurred in the bailouts as revealed by an audit of the Fed’s activities during the crisis, precious little oversight has been applied in light of the findings.

No legislation has been introduced that would prevent the Fed from engaging in more bailouts by buying another $480 billion of mortgage securities a year left over from the financial crisis, or from further monetizing the national debt with $540 billion of new treasuries purchases every year.

At this point, it might be instructive to go back and watch the CNBC Rick Santelli rant that inspired millions of eventual tea partiers to protest. It wasn’t about stimulus. Or Obamacare. Popular tea party issues to be certain, but not the immediate cause for the uprising.

Santelli’s rant was about the idea that Americans who were up to date on their bills would be forced to subsidize their profligate neighbors via foreclosure prevention programs.

For all the attempts to channel tea party enthusiasm, almost no effort was made in dealing with that overall sense of national outrage over the bailouts. Bush accepted the bailouts. McCain accepted the bailouts. Romney accepted the bailouts. And of course, Obama accepted the bailouts.

As a political issue on Capitol Hill, bailouts were neutralized almost from inception through bipartisan support. Which probably explains why the tea party came into being (and Occupy Wall Street for that matter), and why to date it still exists as the only form of opposition against incumbent congressional Republicans who wander off the reservation. The American people still lack a leader to stand against this ongoing plunder of public resources.

That is a shame because the tea party was and is merely an expression of that public outrage, not the extent of it, which cuts across party lines.

Instead, based on a lot of the conventional wisdom out there, we’re led to believe that targeting demographics such as Hispanics and women that have trended historically Democrat with messaging and policies Republicans do not even support is somehow the solution to the party’s doldrums.

It is not. Republicans will not build a lasting majority by abandoning their base, but by embracing it. Not by ignoring the true causes of the current economic state of affairs, but by adapting to them. The Republican establishment is trying to throw the tea party under the bus. It should be following their lead.

Robert Romano is the Senior Editor of Americans for Limited Government.

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