A promise he might not be able to keep

Former Governor Mitt Romney (R-MA), the presumptive 2012 republican presidential nominee, made a promise he might not be able to keep:


Mitt Romney pledges 6 percent unemployment by the end of first term


By Callum Borchers, Boston Globe Correspondent | 05/23/2012 6:35 PM

Mitt Romney pledged Wednesday that if elected president he will drive down unemployment to 6 percent or lower by the end of his first term.

Romney has made the promise at least once before, at a North Las Vegas truck dealership in September, but he has rarely given voters such a specific figure to which he could be held accountable. The guarantee is also notable because Romney has repeatedly claimed President Obama broke a promise to hold the jobless rate under 8 percent. Romney’s 6 percent promise bears the appearance of bold one-upsmanship.

But even if the presumptive Republican nominee were to win the White House and keep his word on unemployment, he might not be able to claim full credit for the success. Five days before Romney first said he would lower unemployment to 5.9 percent in North Las Vegas, the Office of Management and Budget projected the country is already on track for a sub-6 jobless rate in 2016 — a fact the Obama campaign jumped on quickly.

Of course, the Obama Adnministration doesn’t have a particularly sterling record at predicting what the unemployment rate will be or how the economy will do, but one could easily see, if Mr Romney is elected, and unemployment decreases to 6% or lower by the end of his first term, the Democrats campaigning against him in 2016 and claioming credit for the decrease all along.

However, if there’s one thing that is, or at least ought to be, obvious, it is that the President and the federal government do not control the economy. At best, they exert some pressure along the margins, in attempts to nudge things along, but even those efforts often go somewhat differently than planned.

Your Editor has noted, many times, that President Obama set a standard by which the 2009 stimulus plan should be measured, his claim that passage of the stimulus would hold unemployment down to a maximum of 8% during the recession, while unemployment would skyrocket to 9% without it. It was passed, and unemployment shot above 10%. I have stated previously that means that either the stimulus plan hurt rather than helped the economy, given that unemployment was worse with the stimulus plan than we were told it would be without it, or the President and his Administration economists simply didn’t know what they were talking about in the first place. Your Editor would suggest that it is some of both: the economists didn’t understand, and the additional debt caused by the stimulus plan hurt the economy rather than helped it, but there is no way to prove the latter point, because we have no control group, no monitor into another quantum universe where the stimulus plan was not passed, to gauge its effects.

Governor Romney is selling himself as being much more knowledgeable than President Obama on the economy. Individually, that is almost certainly true: Mr Romney has been a very successful private businessman, and he understands, both intellectually and instinctively, what business needs to prosper. More, Mr Romney understands that, in the words of a very great though often neglected previous Republican President, Calvin Coolidge, “the chief business of the American people is business,” and that private enterprise is not the enemy of the working man, but his best friend. President Obama seems hostile to that notion, seeing corporations as somehow the enemies of the people they employ, and certainly demagogues in that manner, whether he believes it or not.

Your Editor believes that Mr Romney will, therefore, bring on board economists and others who are actually friendly to the notion of supporting business, which can only help the economy.

Further, if he is elected to be our 45th President, Governor Romney will not be pushing cockamamie schemes to lower fossil fuel consumption by artificially driving up the price, something which just takes part of the productivity of the American people and wastes it, something which will take more money out of the hands of consumers that could be spent on items which will help keep the economy growing.

But to promise that unemployment will be 6% or lower? Governor Romney cannot (honestly) make that promise, because he does not know the future. Even with business-friendly staffers and economically wise policies, the economy is simply not something the government will be able to control. The economy is “controlled” by hundreds of millions of economic actors taking billions of economic decisions, and the government cannot either control or even anticipate what those decisions might be.1 Governor Romney does not know what hundreds of millions of economic actors will do; the best that he and his economic team will be able to do is to take educated guesses, guesses which will not be completely accurate. President Obama’s economic advisors have proved to be not very good guessers, despite sterling educational pedigrees; whether Mr Romney’s, if he is elected, will prove to be better at such forecasting is unknowable.

Nor can Mr Romney know what will happen in the future. The September 11th attacks turned what was probably going to be a mild recession into something a bit worse. Mr Romney cannot know that there won’t be a devastating terrorist attack, nor can he know that the European debt crisis won’t escalate wholly out of control and cause economic havoc here, nor can he know that we won’t have a major plague; literally anything could happen.

But now he has made that promise, and he if he is elected, he will be held accountable for that number.
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  1. For example, your Editor has to replace the two front tires on his truck, and get a front end alignment today. At Pep Boys, this will cost me $625 if I do not get the extended warranty, or $678 if I do. I could opt to have the better of the two worn tires put in the back as the spare, and replace one tire and use the spare instead of buying two new tires. I have not even decided myself how that decision will be taken; that decision will be taken at around 1100 this morning when I get to Pep Boys. If I don’t know what I am going to do yet, how can the government know?

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