Examining the Presidential Plans, Pt. 1

I intend to examine each candidate’s plans for the future, in several parts. Initially, it was my intention to use Mitt Romney’s 5-Point Plan as the structural basis for this essay, but because of the ways the two differing plans overlap in areas (structurally, not ideologically), and the desire to illuminate rather than obfuscate, I’ll re-organize their plans to fit topical areas.

Mitt Romney asserts that his plan is a plan “for a stronger middle-class” and “A Plan for More Jobs and More Take-Home Pay”. Barack Obama states his “blueprint” is aimed at “Building An Economy From the Middle Class Out”. Each candidate has his supporters, and there is no shortage of partisan analysis. I am going to try and root out non-partisan analysis and use that as the basis for comparison. Wish me luck.

Part 1: An Overview of each Plan and the respective focus

As this is an overview, I’m not going to delve into any significant analysis in this first entry, simply because each candidate deserves to have his say with little interpretation, but, this is my essay, and I can bend the rules as I deem necessary for coherence.

Mitt Romney

The Republican candidate’s overview is written by R. Glenn Hubbard,  N. Gregory Mankiw, John B. Taylor, and Kevin A. Hassett. All served as economic advisors to President Bush at one point or another.

I have decided, in the interest of impartiality, to forego further discussions of the backgrounds of these men, as it lends itself too easily to partisanship. However, I encourage you to research their backgrounds and draw your own conclusions.

Gov. Romney’s/President Bush’s advisors begin his plan by discussing the financial collapse under the Bush Administration, and the recovery following that crisis. In the second paragraph, they try to separate the recovery from the collapse – “We are stuck in a low-growth trap following the 2007 – 2009 recession and financial crisis. The anemic job growth and tragically high unemployment are a consequence of that low-growth trap.”

With that two sentence analysis, they have attempted to pivot out of any responsibility they have as economic advisors to President Bush and his economic policies and re-focus attention to the recovery under President Obama as the reason for “anemic job growth and tragically high unemployment”.

This begs the question – are recoveries separate from the recessions that preceded them? To strengthen their case that they are, they cite a recent article by Michael Bordo of Rutgers and Joseph Haubrich of the Federal Reserve Bank of Cleveland that argues that steep recessions typically are followed by even steeper, faster, stronger recoveries.

Finally, they go on to argue that this is all the result of President Obama’s “Misdiagnosis and Mistakes in Economic Policy”. Specifically, they cite “structural biases against business investment”, “financial imbalances”, and “regulatory choices”.  They then head off obvious criticisms that arise because those are all problems that did not result from  Obama policies. “No single party or administration is responsible for structural headwinds to growth, but…”. This is a strategy that has been seen again and again by Republicans. They want to share disastrous effects of bad policies with the Democrats (which is valid), but then go on to offer solutions that repeat Republican contributions to those bad policies and excoriate Democrats for their proposed solutions. Many would argue that neither party has offered viable solutions. I agree.

With that statement, they then pivot into a criticism of Obama’s stimulus policies. Their primary focus is that the stimulus was short-term oriented. Of course, that’s what stimulus is meant to do, provide a short-term jolt without impacting on the long-term. It is those long-term restructuring policies that the Romney plan then addresses. Essentially, and not without merit, they have thus argued that President Obama should have used the economic crisis as a time to pivot towards major restructuring of systemic flaws.

Barack Obama

President Obama’s Executive Summary does not focus on past activities, but does highlight past accomplishments – the creation of “nearly 500,000 jobs” in the manufacturing sector, cutting oil imports by nearly 30%, cutting taxes for small businesses, and health care reform and the several benefits already being seen by Americans as a result of “Obamacare”, and 31 straight months of job growth.

The focus of President Obama’s plan is to lay out areas of concentration and related quantitative goals. Those areas are: 1) reviving American manufacturing, 2) energy independence, 3) growing small business, 4) improving education and focusing our efforts to improve math and science education, 5) cutting the deficit by $4T, 6) greater consumer  choice and, theoretically, power, in health care options, and 7) protecting retirement security.

The difference in strategies for these competing documents

The primary difference lies in their fit into overall campaign strategy. Romney’s plan was designed to be an articulation of his plan that he could refer to throughout his campaigning. Obama’s plan was released this week, was released as a coordinated closing argument for his campaign after spending the summer disqualifying Gov. Romney as a viable candidate for “the 100%”. Which will be more effective?

To be continued…

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