Romney's Stimulus Plan

I detailed some shortcomings of Obama's economic plan last week. Now let's talk about what should be done instead. Mitt Romney wrote a column last week, detailing his prescription for our economy, and most of it is pretty agreeable. The basic difference between Obama and Romney on the economy boils down to government spending vs. tax cuts (Keynesian vs. supply side economics).

Romney cites empirical research that indicates that a $1 increase in government spending (i.e. a stimulus check) will increase GDP by between $1 and $1.40. $1 in tax cuts, on the other hand, increases GDP by $3. This is a major blow to the Keynesian model.

Why do tax multipliers exceed spending multipliers? Here's the basic idea: tax cuts give people more money to spend, which stimulates demand (the essence of Keynesian prescriptions) but unlike increased government spending (which increases demand in the same way), lower taxes encourage investment, which generates jobs and more production. For example, let's say Obama lowered payroll taxes, effectively lowering the cost of employing people. Using our basic supply/demand curve, we know that lower labor costs will increase demand for labor. Workers will take home more of their pay, which they will spend, driving up demand for goods and services, and companies will hire more people.

Romney agrees that infrastructure projects should be a high priority, but notes that the economic benefits of these projects are no where near immediate because these projects take a while to complete. Romney warns against excessive regulation and the Employee Free Choice Act that would "virtually impose unions on small business by eliminating the right of workers to vote by secret ballot in the workplace. This 'card check' payback for the AFL-CIO’s support of the Democrats would devastate business formation and employment".

Romney does support government spending on "basic research" for technologies that will make us more energy dependent. I maintain my basic argument on this subject: while the impact on global warming is debatable and energy independence would be great, this government spending is not likely to help the economy in the long term and definitely won't help in the short term.

All choices in government require trade-offs:

There is a danger that new spending and deficits will lead to runaway inflation, flight from the dollar, and another economic crisis. It is essential, therefore, that Congress and the president commit to reform entitlement spending as soon as the economy recovers. With the footing of our long term economy at risk, with entitlements already reaching 60 percent of federal spending and with baby boomers nearing retirement, this can be delayed no longer.

Unfortunately, elections have consequences and Obama is likely to choose ideology over sound economics.

McCain's VP

Conan O'Brien: "John McCain invited Louisiana's governor, Florida's governor and Mitt Romney to a barbecue at his home in Arizona because he wants to choose one of them to be his running mate. McCain says he got the idea to choose his running mate this way by watching 'Flavor of Love.'"

I'm guessing Minnesota Governor Tim Pawlenty is still in the mix as well, but he has a wedding to attend this weekend. So we have a 50/50 chance of getting a conservative on the ticket. Pawlenty and Florida Gov. Charlie Crist are McCain Republicans while Romney and Bobby Jindal have good full-spectrum conservative credentials. Jindal is generating a lot of excitement, but is only 36 and is serving his first term as Louisiana Gov. Having a young, energetic minority on the ticket could counter Obama and it's not like the Obama camp can challenge him on lack of experience. However, I think Romney is the best choice (I'm sure you're all shocked). Romney's business experience will play well as the economy becomes one of the top issues in the campaign. It's possible that McCain will only serve one term, so his VP would be set up nicely for 2012. Hopefully McCain will reject the centrist Republicans and finally reach out to the base by giving a rose to Romney or Jindal.

Ugh

The liberal wing of the Republican Party has won; John McCain will be the Republican nominee. Many Republicans want to take the party toward the center, saying that we must be more inclusive, more liberal, in order to win. The Arnold Schwartzenegger's, Charlie Crist's, and McCain's have rejected Ronald Reagan's vision for America, as well as his strategy. Reagan brought people into the tent by convincing them that conservative principles were best for America, not by sacrificing our principles to pick off a few liberals.

What went wrong? I think Mitt Romney would be a great president (he still may win, in 2012), but he failed to unite conservatives. His support among conservatives was slow to develop as they waited for Thompson to generate some excitement. Then Huckabee came out of nowhere to capture the evangelical vote (aided in large part by evangelicals' mistrust of the Mormon faith). Once Thompson was gone, Mitt was the only one left favoring conservatism in economics, social issues, and national defense. However, McCain won with independents in New Hampshire, and with Huckabee continuing to take the evangelical vote, the wave of support for Romney, triggered by conservative leaders and their opposition to McCain just wasn't enough.

Although I am disappointed that a candidate as liberal as McCain has won the nomination, there are at least three important reasons it's important for him to win in November.

1. National Defense - McCain will aggressively fight the war on terrorism. Oh, and who do you want in the White House if the Iran gets the bomb?
   
2. Preventing the biggest tax increase in US history - which both Shrillary and Obama have planned.
   
3. The next president will probably appoint a Supreme Court justice. Do we want another Alito or another Ginsberg? Do we want a Supreme Court that upholds the Constitution, or one that makes it up as they go?
   

Bottom line, don't sit this one out.

Mitt Live and Close Up

Mitt Romney was in Glen Ellyn (10 minutes west of my house) this afternoon and Sarah, Rudi and I were there to cheer his conservative message (economic, immigration, and foreign policy for those McCain supporters). Former Speaker of the House Denny Hastert introduced Romney to a packed house. Mitt gave us a campaign update: he won Saturday's Maine caucus 52% to McCain's 21% (despite McCain endorsements by the governor and both senators) and is now leading by 3 points in delegate-rich California. Mitt spoke for about 15 minutes about his plans for America: lower taxes, a strong national defense, pro-growth and pro-family policies, less regulation and more border security.

Mitt makes it clear that there is only one candidate left who stands for the core principles of the Republican Party: "I'm afraid it's going to be real hard to win the White House if there's not much difference between our nominee and theirs, and that's why I'm going to make sure that we stand for Republican ideals."

Don't forget to vote on Tuesday!

Getting Off the Straight Talk Express

John McCain is now the front runner for the Republican primary. He won a close Florida primary over Romney, getting a bump just before the election thanks to Governor Crist's endorsement and his lies about Romney on Meet the Press. McCain has been roundly criticized by the media for his claims that Romney supported the Democrats' demand for a timetable for withdrawing our troops from Iraq. McCain made the charge on Sunday to Tim Russert, twisting a Romney quote regarding secret timetables that President Bush and the Iraqi government should have to measure progress. Very Clintonian. I'm so upset, I could find a group of like-minded citizens and run an ad letting the American people know about this distortion. Oh wait, McCain-Feingold made that illegal.

Romney has his work cut out for him, especially since Huckabee hasn't gotten the hint that he should drop out, which hurts Romney in the South. However, based on CNN's exit polls of the Florida primary, Romney won the pro-lifers, the Protestants, the pro-Bush voters, those identifying terrorism, immigration, or taxes as their most important issue, and those identifying themselves as conservative or very conservative. Romney was the second choice of most Giuliani supporters. In short, Romney won with Republicans, but McCain won the primary because of independents that register as Republicans.

Why They Hate Mitt

The American Thinker has a great summary of why the other Republican candidates have such a distaste for Mitt Romney: it's not just the hair.

Primary Update

Last week we had five viable candidates for the Republican nomination. Romney's win in Nevada, McCain's win in South Carolina, and the current polling data in Florida seem to have narrowed the field down to two. Giuliani's "the first six primaries/caucuses don't matter" strategery has backfired. He needs a miracle to win Florida and resurrect his campaign. The latest poll has Romney at 25%, McCain 20%, and Giuliani 19%. This was before Thompson pulled out, and most of those votes will probably go to Romney. Whoever wins Florida will be the unquestioned front runner going into super Tuesday. 

A McCain/Romney match up (I would have preferred a Romney/Giuliani contest) will be about fundamental differences in opinion. Will the Republican party continue to stand for the free market, pro-growth policies and the rule of law? Or will we nominate a candidate that uses class warfare to oppose tax cuts, bashes big business, favors amnesty for illegal immigrants, and wants to destroy our economy with massive global warming taxes?

Note to Democrats: our race is actually about issues. Yours is about one thing: race. 

Romney Wins On Economic Message

Romney trounced McCain in Michigan tonight for his second primary win. Romney has 42 delegates, double anyone else. He's the only candidate that's been competitive in each state. Exit polls showed that Romney cleaned up with voters who listed the economy as their biggest concern. With the war in Iraq improving so much it's off the front page, the shaky economy is likely to be the biggest issue in the general election. Romney's economic message resonated with Michigan voters. The economy may be his big advantage over McCain and Huckabee.

Romney has great business experience - he founded Bain Capital, a hugely successful venture capital firm that made Staples, Brookstone, the Sports Authority, and many other great companies household names, producing thousands of jobs and boosting the economy. He was tapped to take over the 2002 Salt Lake City Olympics after it racked up a $379 million operating deficit and was mired in scandal and controversy. Despite these problems and the security challenges (only a few months after 9/11), the Olympics ended up a huge success. Washington overspends - mortaging our future with budget deficits to buy votes today and over taxes - slowing our economy and punishing achievement. Romney inherited a huge deficit as governor of Massachusetts, yet he balanced the budget each year without raising taxes. Romney and his free market ideas are the change this country needs - not more entitlements, taxes, and regulation.

Do Delegates Matter?

I understand that momentum is important in primaries and that winning gives you momentum. However, what actually counts at convention is how many delegates you have. McCain won New Hampshire, but only picked up 7 delegates. And now he's the front runner? Romney is actually the leader in delegates with 30, after coming in second in Iowa (12), first in Wyoming (8), second in NH (4) and his 6 Superdelegates. Huckabee is in second with 21. Michigan is really important for Romney, but the Republican race is much different than the Democrat race, which is essentially down to two candidates. The Republicans still have at least four with a realistic chance at the nomination (Romney, McCain, Giuliani, and Huckabee).
Romney has some strengths going into Michigan - it's his home state, his dad was a popular governor there. Michigan's economy is in the tank and Romney can point to his experience turning around companies, the Winter Olympics, and the economy of Massachusetts as Governor. As Governor he took a $3 billion deficit and left office with a surplus without raising taxes. Romney accomplished this by cutting spending and with various programs to stimulate the economy.

Republican Primary - the Details

Amid all the media coverage of the primaries, nobody really talks about how they work. Here's what you need to know about the Republican Primary:

The primary kicked off in Iowa last week and voting will continue until June 3. The 2,380 delegates up for grabs will vote at convention in September. The Sept. 1-4 convention is the latest ever. The Democrats wanted to wait until after the Olympics to hold their convention and the incumbent party usually goes second because it puts them at a political and financial advantage. Each state is awarded a different number of delegates by the Republican Party. Each state automatically receives 10 delegates, plus their two RNC delegates and the chairman of the state Republican party. They get 3 more for each congressional district and extras for having Republican U.S. Senators and Governors, controlling the state legislature, and for voting for President Bush in '04. In some states, the winner takes all, in others they are divided proportionately.

No state is allowed to hold their primary before February 5. However, five states (Wyoming, New Hampshire, Michigan, South Carolina, and Florida) are holding their primary before that (Iowa is not included because it holds a caucus). The RNC voted to take away half of their delegates for this transgression. The states are willing to do this in exchange for having a greater influence on the national primary. Winning the early primaries gives candidates the all important "Big Mo" that can carry them to victory, so the candidates shower them with attention. It doesn't seem to make much sense to start with these states, but it is the state's decision. The only way to change it is to stiffen the penalties for starting early.

I think the early primaries are more important for the Democrats, as they begin with more liberal states. How New Hampshire votes probably won't have a big impact on Republicans from the south (see here). It will impact Michigan, though. After a great performance last night, Governor Romney seems to be closing the gap on Senator McCain just in time for tomorrow's New Hampshire primary (keep in mind that NH is a proportional state). Also, 45% of New Hampshire voters are independent and many of them are getting sucked into the Obama tidal wave and will ask for a Democratic ballot instead of a Republican one.

Romney Wins Wyoming

Romney won today's Wyoming caucuses. OK, I know it's not as important as Iowa, but it gives him a boost going in to New Hampshire. The debate tonight was interesting though. McCain showcased the most liberal stance on immigration, advocated socialized medicine via drug re-importation from Canada (where prices are set by the government) and made constant, petty personal attacks against Romney. Thompson had the right answers but, as usual, was less than inspiring. I love his conservative ideas, I just wish he acted like he wanted to win. Huckabee tried to stay above the fray and escaped without helping or hurting himself. Paul managed to fault monetary policy and inflation in every answer. Romney differentiated himself from McCain, his main competition in New Hampshire on immigration and health care and rose above the constant personal attacks from McCain. I am really starting to dislike McCain. Usually he comes across as principled and distinguished (even if dead wrong). Tonight he was neither, pandering to the New Hampshire independents and making smug comments at every turn about Romney.

On to New Hampshire

A big win for Huckabee last night in Iowa. However, this probably helps McCain more than Huckabee. I'm skeptical that Huckabee's shtick will play well in New Hampshire or Florida, although South Carolina is a maybe. McCain gets a boost for Tuesday's New Hampshire primary, where he has a slim lead over Romney. Governor Romney is easy to take shots at (changing his views on abortion, Mormonism, etc.) but there is no perfect candidate. Thompson's campaign has been very disappointing. He would have been a better Vice Presidential candidate had he not run in the first place. Romney is the only one running as a full spectrum conservative that is a viable candidate. Republicans may choose to reject conservatism and give Jimmy Carter Jr. (Huckabee) a try, or maybe the preeminent RHINO (Republican in name only), McCain. Romney needs to take a few of these early primaries or else no one will be able to stop Giuliani. I am warming up to Giuliani, hopefully the base can too if he wins.

Romney on Meet the Press

Romney was on Meet the Press with Tim Russert yesterday. You can watch the interview or read the transcript here. I thought Governor Romney was very successful in handling the tough questions from Russert on Mormonism, abortion, etc. He came out strong against Huckabee's comment that the Bush administration has an “arrogant bunker mentality,” saying “that’s an insult to the president, and Mike Huckabee should apologize to the president." (Huckabee refuses to apologize). The most talked about moment occured when Romney was asked about the Mormon church's decision to finally allow African Americans into the priesthood in 1978. His eyes filled with tears for a moment as he described his reaction to the news.

“And so it’s very deep and fundamental in my life and my most core beliefs that all people are children of God. My faith has always told me that. My faith has also always told me that in the eyes of God, every individual was merited the fullest degree of happiness in the hereafter and I had no question that African Americans and blacks generally would have every right and every benefit in the hereafter that anyone else had and that God is no respecter of persons.”

National Review Endorses Romney

National Review, the prominent conservative magazine, has just endorsed Mitt Romney for president. While they also like Thompson, they do not view him as a viable candidate, citing his lackluster campaign and lack of executive experience.

Our guiding principle has always been to select the most conservative viable candidate. In our judgment, that candidate is Mitt Romney, the former governor of Massachusetts. Unlike some other candidates in the race, Romney is a full-spectrum conservative: a supporter of free-market economics and limited government, moral causes such as the right to life and the preservation of marriage, and a foreign policy based on the national interest.

On Rudy and Huckabee:

Rudolph Giuliani did extraordinary work as mayor of New York and was inspirational on 9/11. But he and Mike Huckabee would pull apart the coalition from opposite ends: Giuliani alienating the social conservatives, and Huckabee the economic (and foreign-policy) conservatives. A Republican party that abandoned either limited government or moral standards would be much diminished in the service it could give the country.

More on why Romney is the right choice:

Romney is an intelligent, articulate, and accomplished former businessman and governor. At a time when voters yearn for competence and have soured on Washington because too often the Bush administration has not demonstrated it, Romney offers proven executive skill. He has demonstrated it in everything he has done in his professional life, and his tightly organized, disciplined campaign is no exception. He himself has shown impressive focus and energy.

A huge endorsement for Romney, who many feel scored some points on Huckabee at the debate yesterday in Iowa.

Mitt's Speech

Mitt Romney gave an inspiring speech today. He spoke of freedom and the values that made this country great. Romney showed that his faith is important to him and makes him who he is. While his faith isn't the same as mine (or the evangelical base) he made clear that his values are the same: "Perhaps the most important question to ask a person of faith who seeks a political office, is this: does he share these American values: the equality of human kind, the obligation to serve one another, and a steadfast commitment to liberty?" Please watch the video.

CNN/Youtube Debate

I'm not sure who the winner of Wednesday's debate was, but the clear loser is CNN. They flew in a member of Hillary's campaign to debate the candidates on gays in the military when all of the questioners were supposed to be undecided Republicans. CNN would have realized that many of the questioners were actually Democrat plants if they had done a minute's worth of research online and I don't think anybody's buying their story that they didn't know who the gays in the military guy was. Many of the questions CNN chose revealed their view of Republican voters: crazy gun lovers and religious weirdos. One questioner wanted to the candidates to comment on his Confederate flag. We get the message, CNN: Republicans are kooks. CNN is a joke, yet it's the Democrats who refused to even go on Fox News for a debate.

As far as the candidates (click here for transcript), I thought Rudy got creamed, especially on illegal immigration. Thompson was good, but not great. He had solid answers to every question, I'm confident in his conservative values and character, but he just hasn't excited me yet. Huckabee was good, although he did take shots on taxes. He had a great line, when asked about expanding the space program: "maybe Hillary could be on the first rocket to Mars." No one addressed his huge weaknesses in understanding a free-market economy (see my entry below). Romney scored some points early on Rudy, but seemed to waffle on a couple questions. However, he firmly responded to criticsm from Thompson on his abortion record: "I was wrong." Romney noted that he had his change of heart soon after becoming governor and vetoed every abortion rights expanding bill that came across his desk. I think Romney made a mistake though in wasting all his ammo on Rudy. He should have targeted Huckabee's lack of conservative credentials, as Huckabee is a greater threat in the early primaries.

Romney's Lead Widens

Mitt Romney has opened up a twelve point lead over Giuliani in New Hampshire, while maintaining a large lead in Iowa. Giuliani still leads nationally, but some are now saying that Romney should now be considered the Republican front runner. If Romney takes the first two primaries (Iowa and NH) he will get a big boost in Michigan, South Carolina and Florida. Giuliani has neglected Iowa and NH, instead focusing on states like New Jersey and California, and now it may be too late.
"Mayor Giuliani keeps hanging his hat on national polls that show him getting around 30% support, yet fully 100% of the electorate knows who he is. That is a very big gulf to have between the number of voters that know him and the number that support him," says a spokesman for the Romney campaign.
Giuliani is not being helped by the federal indictment of Bernard Kerik, the NYC police commissioner while he was mayor. Giuliani had recommended Kerik to President Bush as a nominee for secretary of homeland security in 2004. Kerik is accused of accepting free renovations to his home in exchange for lobbying for a firm to get a government contract.
Romney's got momentum - now's the time to join the bandwagon.

Behind the Scenes at the Drudge Report

The Drudge Report is an addiction for me. I probably check it at least 10 times a day. The site links to various news around the web, often things overlooked by the mainstream media (like when it broke the Lewinsky story and this picture of John Kerry). The Drudge Report gets 3 million unique visitors a month, giving Matt Drudge great influence on the public and what stories the media covers. The New York Times has an article about politicians efforts to get favorable coverage that I think is interesting. The NYT reports that Hillary is stepping up her efforts by giving hot tips and that Romney has been the most successful of the GOP front runners at getting on Drudge's good side.

Romney Newsweek Cover

Mitt Romney (my favorite for the Republican nominee in '08) is on the cover of the most current Newsweeek. The article examines Romney's upbringing and shows his struggle to portray himself as the turn around artist of the 2002 Winter Olympics and not as the Mormon candidate. The authors paint a picture of a hard working, disciplined, analytical, and bright person. Romney is shown to be very principled, but at the same time cognizant that he must connect with voters on shared values to overcome the liability of his religion. Not an easy thing to do, but I think as the average Republican voter gets to know him (as they have in New Hampshire and Iowa), he will gain ground on Rudy and Thompson. I'd like to see him run with Mike Huckabee as VP. Huckabee would help shore up the southern and evangelical vote.

Obama - Commander in Chief?

Barack Hussein Obama seems to be making one foreign policy mistake after another. He must recognize that his lack of foreign policy experience is his biggest weakness. However, his recent statements aren't helping much. First Obama promised to meet with every dictator, thug, or leader of a terrorist nation that will have him. Next he would invade Pakistan, one of our only allies in the region. Then he promised never to use nuclear weapons (I hope our world never sees the use of these weapons again, but I will side with Hillary Clinton on this one: "I don't believe that any president should make any blanket statements with respect to the use or non-use of nuclear weapons.") Now, Romney is calling him to the carpet for saying that our troops in Afghanistan are "just air-raiding villages and killing civilians." A horrible and untrue accusation against US troops. Obama may offer "hope" (whatever that means, I'm guessing higher taxes), but he appears to be not quite ready for prime time, and Shrillary is taking full advantage.