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RomneyWorld vs. ObamaWorld

Brad DeLong, professor of economics | February 20, 2011

Somewhere out there in the multiverse, beyond space and time — perhaps in the place on the TV show “The Fringe” where the characters Olivia and Walter’s counterparts Fauxlivia and Walternate live — is a place in which President Mitt Romney won the 2008 presidential election. The specific reasons for Romney’s victory are not terribly important. Perhaps the fundamentalist preachers of the Republican Party endorsed rather than scorned Romney for his Mormonism. Perhaps traditional Republican power brokers were less willing to forgive John McCain for his previous forays into “bipartisanship.” Probably Mitt Romney would have been better informed and appeared more of a leader in responding to the financial crisis than McCain. Add in a few missteps by the Democrats, and it might well have been Mitt Romney before whom John Roberts bobbled the oath of office in January 2009. It could have happened here, therefore it did happen somewhere out in the multiverse.

What do the American economy and economic policy look like right now along that President Romney branch of the multiverse?

Well, they look a lot like they look right here on earth.

President Romney would have provided support to troubled banks–capital injections and stress tests–but he would have avoided even a few targeted nationalizations of the banking system: he is, after all, a Republican.

He would not have pushed the Treasury to engage in large-scale quantitative easing through the Public-Private Investment Program or large-scale mortgage restructuring through the HAMP home mortgage modification program.

On monetary policy, Romney would most likely have reappointed Ben Bernanke and let the Federal Reserve proceed as it wished. On fiscal policy, Romney’s Chairman of the Council of Economic Advisers, Mark Zandi, and his National Economic Council Director Douglas Holtz-Eakin would have proposed a fiscal stimulus package that was 60 percent tax cuts and 40 percent spending increases. The Democratic Congress would then have bargained with the administration to produce a stimulus that was 40 percent tax cuts and 60 percent spending.

But, of course, all these policies are exactly what Obama and the Democratic Congress actually enacted.

On global warming, Romney would have abandoned economists’ preferred Pigovian carbon tax for the complicated, corporatist and business-friendlier approach of a cap-and-trade system; but he would have been no more successful than Obama in assembling a Senate coalition to achieve anything.

On healthcare, Romney would have taken his signature Massachusetts health care reform and expanded it nationwide: we would have RomneyCare. But that is precisely what we do have.

I see only two key policy differences between RomneyWorld and ObamaWorld. Had Romney been elected President in 2008 we would not have repealed the military policy of “Don’t Ask, Don’t Tell.” And had Romney been elected President in 2008, Elizabeth Warren would not now be Assistant to the President for Consumer Financial Protection.

Otherwise? As far as policy is concerned, we would be smack on the mark that we are on now.

But the politics would be very, very different.

Think, first, of the Republicans — their legislators and office holders, their spinmasters, stenographers, and intellectuals. All Republicans except a small grumbling fringe would be crowing about how ObamaCare — oops! I mean RomneyCare — is the golden mean between continued tolerance of a dysfunctional system and rash experimentation with overregulation. All would be saying that Republicans were able to get things done because they were not overambitious or free-market-phobic. Republicans would talk about how Romney had bargained the Dodd-Frank financial regulation into a form where it was not intrusive overregulation but merely a sober attempt to fence in a free-range system that had been out of control. But the Dodd-Frank bill that Romney would have signed would be, save for the consumer protection agency, the same as the Dodd-Frank bill that Obama signed.

Republicans would talk about how Romney’s expansionary fiscal policy had been effective in fighting the recession. They would say that, if anything, an even larger fiscal stimulus package back in the start of 2009 would have further boosted the shaky economy.

In that alternate RomneyWorld, professional bipartisans would be praising Romney for minimizing partisanship and working for sensible policies. They would praise him for aggressively expanding the deficit so that the government boosted aggregate demand in the depths of the downturn when the private sector sat down. And they would praise him for having taken major steps to control entitlement spending through the long-term cost-cutting and revenue-raising provisions of RomneyCare. But these professional bipartisans who would be praising President Romney for tackling the entitlement problem through Romneycare, by taxing Cadillac health plans and by giving teeth to the Payment Authorization Board, would be the very same people who in our world give Barack Obama no credit for either.

So while the policy outcomes in RomneyWorld would be remarkably similar to those achieved in ObamaWorld, the rhetoric that accompanied and publicly defined those outcomes would have been markedly different. Democrats would have lamented Romney’s various half –measures (which they largely perceive as three-quarters measures in our world) to deal with the crises. But no cries of socialism, or vitriol about government takeovers, would have greeted RomneyCare. There would have been no winks and nods to assertions among a fevered base that the president is a usurper. There would be no claims from Senators like Charles Grassley–who until Election Day 2008 supported health reform based on requiring all individuals to pay a tax if they did not have health insurance –that the Affordable Care Act’s requirement that all individuals obtain health insurance on pain of paying an extra tax is unconstitutional.

There would be no Republican senatorial candidates telling people that when their party loses an election, “Second Amendment remedies” may be necessary.

And, though it’s considered very impolite to say this out loud: quite possibly in alternate RomneyWorld our members of Congress would be less likely to get shot.

Comments to “RomneyWorld vs. ObamaWorld

  1. With your Altermitt, you just made the best case for Romney ’12 that I’ve so far been witnessed. So while neither candidate is the lesser of two evils, as is often purported, the result of electing him will be the lesser of two.

  2. Your comparison of the fictitious Romney admin. with legit Obama admin. quite interesting, although I am totally unable to validate any of the claims you make. We often say that Hilary would have done a better job and would have been a better President than Obama and I for one am sorry that I did not feel able to forgive her husband his indiscretions.

  3. Too bad the DNC and Obama are so inept that can’t explain their ppoliticies for what they are but only do spin. I like “follow the money” break down of what the banksters, corporations, politicians and judges embody in their practices and policies. And I would like the media to report facts, not spin—-e.g. the ocean is dead where all the oil silled but I clearly remember newscasts saying the BP oil spill wouldn’t be that bad and the disperant they uesed to “cover up” was a good deal. Well all lies. Like advertisments. No wonder the income inequality is as bad nationally as in the robber barron era of history. That combined with perpetual wars is ruining our democracy just as we ruined South America’s hopes with Milton Friedman’s economic “Shock and Awe”. Oh and a little history of the twentith century American foreign policy wouldn’t hurt.

  4. don’t forget about Supreme Court appointments…one of the main methods (or “cow nose rings” as I like to think of them) Democrats pull lefties like me to the polls

  5. How do you think Romney would have handled the bankruptcy of Chrysler and GM? That is the only other major policy area where I think I moderate republican would have taken a different approach, and I think it could have had major ramifications on the national recovery and the stability of the industrial midwest.

  6. I believe we cannot keep spending like we are. Things have to change. When I considered which political group is better for us I look at the states and look at their representation. All the liberal thinkers have California, New York, New Jersey, and Michigan. We tried their policies and now we reap what they sow. You cannot keep spending. We are at a crossroad where things need to change on both parties. I see the tea party moving in the right direction. If you are not responsible and do what you say they we should vote you out on principle. That goes for both D’s and R’s. One thing is for sure you should only vote for someone who have a record of voting in the past. When we hire someone for a job we look at their past record or performance to determine if we want to hire them. The presidency is the only job and most important where you don’t need a clear past record to get voted into office. If I was hiring someone for president I would not base it on what he saids he is going to do unless his past accomplishments are backing up what he is saying. It is funny once you are liberal or conservative you seem to vote that way even if it is wrong. I look at California and wonder when will it change? I am in New Jersey and we have a Governor that looks like he is cutting back. Only time will tell. Finally, as an economic major I have always been intrigued how you learn basic supply and demand,in school and how it applies to real life but when in real life we never practice it until it is too late. Just a thought

  7. Obama=Romney. That’s why I’m voting for the real thing in 2012. Done with Obama. Time to turn the country back to the Republicans so that they can screw it up enough again to have Dems take another crack at it.

  8. Boring. Obama stole $14 trillion, you worked for the Clinton Clown, so you know how dc WORKS. This is hope and change. Destroy America is hope for the world. Obama said it in plain English on his campaign trail. Watch as each state goes into heavy meltdown. That is the plan, man.

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