Puff The Magic Romney

Well what a week that was. Mitt Romney has not yet lost the election, but he has come perilously close. If he pulls out a win, which is now looking like a long odds bet, it will not be because of his economic plan. This is because he doesn’t have one. Or, rather, that his plan is vacuous, vague, incoherent, and lacking in anything we can reasonably call a plan.

Or perhaps I just misunderstand what a plan is.

In my lexicon a plan is something with concrete steps – causes – that have some semblance of connection with a desired results – effects. Cause and effect. I realize in this uncertain world that plans have to have some latitude so that the unexpected can be accommodated nicely within the overall goal, but the entire plan ought not to consist of latitude. There’s such a thing as being too loose.

And Romney’s plan is loose in ways that make it impossible to understand.

The main thrust of it is that simply by ousting Obama things will look up. That is to say that our business leaders are so in a funk over Obama’s supposed anti-business rhetoric and policies that once he is swept away they will stop cowering and sulking and come roaring to life. They will repatriate all their off shore bank accounts. They will unleash the hounds of investment. They will build new factories, buy new equipment, open up the throttle and drive us happily out of the doldrums.

This is stupid. And it’s not a plan. But it is exactly what Romney appears to believe. In which case he is an incompetent dolt, and an ignoramus to boot.

Which he is not.

So why the stupid plan?

Because he is strapped into the cockpit of the Republican party’s economic aircraft, which, dodo-like, cannot fly. Ever.

The rickety contraption called  Republican economic policy is riven through with massive contradictions. It is a kluged together mash-up of  elements each of which is designed to appease a different part of the whacky coalition we know as the Republican party. And since that coalition is full of disparate and often contradictory pieces, so too is its economic platform.

So continued tax cutting sits uncomfortably beside budget austerity without any attempt to reconcile the yawning gap between them. On the one hand the Republican party’s rabid Tea Party base wants lower taxes – especially for the ‘job creators’ – and on the other it’s ultra conservative fiscal hawks want to balance the Federal budget. Without cutting defense spending of course. This is simply not plausible without gutting Federal entitlement programs, which the libertarian part of the GOP salivate at, but nowhere does Romney mention abolishing those entitlement programs. Instead he talks about ‘reform’ of insufficient scale to close the budget gap his proposed tax cut would open up. Worse, he attacks Obama for having cut those entitlements – wrongly as it turns out.

If part of the Republican plan to balance the budget they will cause first to make worse is by slashing entitlements, then criticizing Obama for slashing entitlements is not a very clear way of articulating what they plan. In fact it is lying.

But at least they are lying with some clarity.

The rest of the plan is foggy to say the least.

It really can be summed up as a confidence trick. It relies entirely on the boost in confidence that business will get – presumably – from ditching Obama and his socialist ways.

It takes a very complex mind to take the current economy, in which business investment is growing decently, where profits are strong, and where banks are knee deep in resources awaiting lending, and make the lack of investment, profit opportunity, and loans the source of all our problems.

Maybe complex is the wrong word. Perhaps deluded is better.

The problem the Republicans have is that they have become the poster child for one trick ponies. They have precisely one economic policy. Cut taxes. They remind me of Samuel Beckett when he talked about failure as being worthy if we learn from it. His saying was: “Try again. Fail again. Fail better.” The Republicans have turned this into “Try again. Fail again. Fail again. Fail again …”. They forgot the better part. They forgot to learn. So they are stuck with a self-contradictory policy that we know, a priori, will fail. It has failed in the past. Re-branding it the ‘Ryan Plan’ doesn’t alter its rottenness. Call it ‘supply side’. Call it ‘trickle down’. Call it what you will. It still won’t work.

The deeper issue for the Republicans then becomes clear. They cannot solve our problems because they are ideologically committed to the course of action that created those problems. So they are boxed in. The facts don’t fit their narrative, so they are forced to invent facts. Hence the slurs against Obama. Hence his demonization as being anti-business, when in fact he is nothing of the sort.

This is not to argue that confidence and expectations are not part of economics. They are. But business expectations are far more pragmatically based than right wing economists and politicians like to believe. They are based on hard-headed estimates of demand. Absent the prospect of strong demand and any sensible business leader will avoid the risks associated with new investment. Instead they will try to squeeze every last drop of profit from their existing operations. They will cut costs, lengthen the work week for existing employees, use older equipment beyond its original expected life, and otherwise coax cash out from the corners they would normally ignore.

This pragmatic picture fits well with the data. It is exactly what we would expect to see were demand the driver of activity. It is exactly what we find when we examine the facts. We do not live in a supply driven economy. We live in a demand driven economy. One where the Republican economic ideology does not fit. Which is why, ever since Reagan first foisted it upon us, it has failed – repeatedly – to deliver the nirvana we were told it would. Instead it has delivered huge inequality, social regression, and hardship for everyday workers. We got the unintended consequences – and I am being polite – without any of the intended consequences.

In face of these facts it is hardly surprising that Romney cannot articulate an economic plan worthy of being called a plan. He couldn’t. It isn’t possible. So he is condemned to being vague, vacuous, and incoherent. He doesn’t look comfortable with his situation. He is far too much of a control freak to feel at ease with the mess that is Republican economics.

But that’s his problem, not mine. So I don’t care about that.

It also means he’s being dishonest. And that I care about.

He deserves the mess he’s in.