Thursday, January 5, 2012

Romney Will Probably Win the Republican Nomination, But...

All the evidence points to Mitt Romney becoming the Republican nominee. I must eat my words from last year when I doubted that Romney would get the nomination.

Romney will likely win New Hampshire given his campaign apparatus there, the number of moderates who tend to vote in the New Hampshire primary, and his high name recognition due to his run in 2008 and his time as governor of neighboring Massachusetts. That leaves South Carolina as the best early primary state for conservatives to stop him.

Even assuming that Romney loses in South Carolina (far from a foregone conclusion) he will still have a massive war chest and a formidable organization. Santorum does not have the campaign infrastructure or funding to go toe to toe with Romney on Super Tuesday. As of now, Santorum has around $230,000 on hand; Romney had $14,656,966 on hand as of late December. I predict that Romney will soon deliver the knockout blow to his opposition and claim the nomination.

I must confess myself surprised to see Romney doing so well. His claims to electability do not ring especially true. It is true that he was elected Governor of Massachusetts, a state that has reliably supported Democrats on the national stage. He had only one term as Governor after losing a Senate race to Ted Kennedy in 1994, the same year Republicans took control of the House of Representatives for the first time in decades. In 2006, he chose not to run for reelection. It is easy to take a cynical view. 2006 was shaping up to be a good year for Democrats nationwide. In fact, Democrats took control of both houses of Congress. As he was leaving office, his approval was just 34%. I strongly doubt that he would deliver Massachusetts in a general election given its Democratic tilt and his low approval ratings when he left.

What is supposed to make him electable is his economic expertise. Indeed, he does have a relatively detailed economic platform that has been favorably reviewed by many economists. But when he was in office in Massachusetts, employment grew at 1.3% while it grew at 5.4% nationwide. Romney defenders might point to all kinds of explanations for this statistic. Perhaps most tellingly, they might argue that Massachusetts’s entrenched predilection for liberal policies (which supposedly stifled economic growth) and failure to adopt more conservative ones caused the economy not to perform as well as the nation as a whole.

But that raises uncomfortable questions for Romney. First, if he was unable to deliver the economic performance he promises in Massachusetts, how will he do so in Washington? It may have been difficult to push conservative economic policy in Massachusetts. But things will not be considerably easier in Washington. He will face a spirited opposition in the Democratic Party, which will have enough power to filibuster his initiatives at a minimum. It is very possible that Democrats will retain control of one or both houses of Congress. Under these circumstances, Romney will hardly be able to waive a magic wand to dramatically lower taxes or make drastic cuts to popular entitlements like Medicare and Social Security.

Second, if Massachusetts’ liberal economic policies were so poisonous to economic growth, why did Romney end up supporting a healthcare plan which ended up expanding health insurance and requiring citizens to purchase it? Cato, a conservative think-tank suggests that Romney’s plan will cost the state of Massachusetts two billion dollars more than it was originally projected to cost. Is this not the sort of big government project that conservatives have often argued ends up hurting the economy by raising taxes on money that could instead be spent, saved, or invested? In short, Romney’s economic performance when he was actually in a position to affect meaningful policy change seems nothing to write home about.

Because of this, and the fact that Romney wants to run as a Washington outsider, he will point to his time in the private sector where he was able to amass a respectable fortune and build Bain Capital into the company it is today. He will also tout his experience running the 2002 Salt Lake City Olympic Games. But Romney’s time in the private sector will be a double-edged sword. His wealth will make already make it difficult for struggling working-class voters to relate to him. In addition, he will be pilloried for the companies that Bain took over where there were subsequently massive layoffs. Ted Kennedy was able to make use of Romney’s time at Bain quite effectively in their 1994 Senate race.

Can Romney win? Yes. But I believe his fate is entirely tied to the economy. Other candidates would be able to run against Obama’s healthcare mandate or his support of abortion rights to galvanize voters. Because of his past support for the healthcare mandate, he will not be able to use this potentially potent issue in the general election. His record of shifting positions on issues such as abortion and his Mormonism will make some voters he absolutely needs uneasy, and it will cause independents to wonder if he is a genuine man. To put aside such concerns, he needs swing voters to conclude that the economy will not get any better under Obama, and that Obama’s mismanagement of the economy has been so egregious that he simply cannot be trusted with a second term. Voters desperate to improve their economic fortune would then turn to the only alternative—Romney.

On that front, predictions of robust growth in 2012 and declines in the number of people seeking unemployment benefits cannot be especially welcome news. Ironically, a man robbed of all but a market-based critique of Obama’s economic policies is himself entirely at the mercy of the market in this election cycle.