Applied Randology #12: Life of a Salesman

Last night was the first presidential debate and I will say without qualification that Mitt Romney cleaned President Obama’s clock. There are two angles on that performance that I want to consider here briefly.

The first is what Romney did well.  He took control of the agenda of the debate from very early on, and made a very effective sales pitch for the conservative idea that reducing taxes and regulatory hoops leads to greater growth and is thus a more efficient solution to the jobs crisis as well as the deficit and debt problem. He also spoke to the Randian vision in alluding to bureaucratic panels making decisions and the idea of “trickle-down government,” all of which suggest the constantly expanding and increasingly inefficient central government infringing on the ingenuity of the private sector that Atlas Shrugged presents for criticism.

The Atlas comparisons inevitably cut both ways, though. Romney moderated almost all of his declared positions to appeal to the centrist voter, seeking to distance himself from the extremity of the Republican agenda as much as possible. He also offered a lot of details that don’t square mathematically with his established policy positions, which do reflect that GOP agenda. This is smart politics, for sure, but it plays into the “etch-a-sketch” meme, which makes for a classic Mouch/Thompson politician.  Nevertheless, in terms of a sales pitch, it was gangbusters.

By contrast, President Obama repeatedly got lost in the policy weeds, eating up time while scoring fewer rhetorical points. While his facts may have been less misleading, the overall effect was to play into the Republican narrative of government as a knot of technical jargon obstructing (business)people from doing what they want to do.

All of that is largely about horse-race coverage and spinning media narratives. Romney won that handily. The second issue I want to look at is the objective validity (or invalidity) of those claims Romney made to win the narrative. Here’s the three examples of misleading decontextualization that jumped out at me as I watched:

1) Early on Mitt referred to American tax policy moving “small businesses” away from America, but this dynamic can obviously only affect multi-national corporations. This conflation of small business and the larger corporate playing field is misleading. It isn’t that the corporate scale isn’t vital to the economy — it is — but discussing policies that benefit corporate institutions as if they were primarily aimed at local community businesses is intellectually dishonest. Romney did later make some sounder points about actual small businesses, though as with his statistics on green energy investments, he radically exaggerated the numbers. Either way the elision of the difference between Exxon-Mobil and your local plumber is deeply misleading and, I think, highly characteristic of Romney’s exploitation of voter ignorance.

2) President Obama pointed out, accurately, that Mitt Romney’s proposed tax cuts add up to $5 trillion dollars. Romney pointed out that he will close loopholes so that this number would not be accurate. He still refuses to specify those loopholes, even though basically all of the options on the table have to be adopted to make the math work. Yet he claims that he will not be raising taxes on the middle class or reducing taxes on the wealthy, all while his reforms remain revenue neutral. This is not only mathematically impossible but politically disingenuous. His line of defense essentially boils down to “Because I say so, so trust me,” and since his claims as they stand do not square with the hard data, there is no reason to trust him on this unless he provides more details. This example is extremely  similar to the politicians in Atlas Shrugged.

3) During a discussion on health care, Mitt said he would keep Obamacare but leave its implementation up to the states, which makes no sense on its face if you actually know anything about how the policy works. But besides that, this plan would be a disaster for — ironically — the states that reliably vote Republican. Many of these (the most notable exception being Texas) are the welfare queens of state government; they receive far more federal funds than they contribute in taxes. Without these federal subsidies, most of the south and the mountain west would be unable to provide adequate health care services. This would make residency in these states less attractive, it would increase poverty among the elderly and economic drag on the families now supporting them out of pocket, and over time it would worsen these regions’ already low scores on health care  outcomes, increasing health care costs and creating a vicious cycle.

This last example brings us back to the broader ideological point, which is this: sometimes competition does not produce a race to the top; sometimes it produces a race to the bottom. Arms races lead to nuclear proliferation and thus a more dangerous world. The race to provide the cheapest oil leads to overproduction and overconsumption and environmental catastrophes that damage the stability of the economy in which people are trying to prosper. Health care costs are another key example of this.

I noted up top that Romney’s arguments about lowering regulation to increase economic efficiency are factually valid. The reason they don’t persuade me away from Democratic proposals is that he radically exaggerates the size of these efficiency effects. Dynamic scoring of proposed tax policy changes usually produces something like a savings of 30% of the cost of the cuts — for every dollar you cut, the boost this provides to growth only gets you thirty cents back, not the whole dollar. The Republican pitch on taxes constantly suggests that you would be getting far more of a return than what the historical record suggests. 

Just as importantly, the growth of the economy in this situation is not evenly distributed among the population. “Trickle-down” or supply-side economics benefit the wealthy first, and the middle class later if at all. And if we look at the historical record since supply-side was first institutionalized under Ronald Reagan, the money amasses mostly among the wealthy and the middle class stagnates, creating a larger lower class of menial service laborers and welfare dependents. This is a serious shortcoming of Republican proposals, to say the least.

Combine these factors and what do you get? Poor priorities. Good constructive criticism; bad proposals for addressing the most longview, structural issues. The post-Reagan Republican narrative has always been so effective because it is a wonderfully elegant theory of how things should work. But when it turns out that reality doesn’t work that way, that narrative becomes the problem and not the solution. And we reached that tipping point long ago.

As always, Romney’s means are the perfect example of why he shouldn’t  achieve his ends, especially by a Randian measure. He is clearly an excellent salesman, but by winning through the obfuscation of the truth, he exploits the difference between the merits of his sales pitch and the merits of the product he is pitching. That difference in and of itself accounts for why market outcomes and business acumen are not equivalent to moral integrity, and how they can easily incentivize an appeal to the lowest common denominator instead of a call to raise standards.  

Mr. Romney won definitively when it comes to subjective reality: our collective reactions and opinions. But when it comes to objective facts about what’s driving American decline and who is responsible for our inability to address those issues legislatively? Not so much.

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