Thursday, February 23, 2012

The Romney tax plan: more background before I turn to the plan itself

In a recent post, I noted the central argument supporting Romney’s presidential aspirations, which is that he has the intellectual skills to make good decisions if in a position where (a) he had the power to implement whatever he decided and (b) he had the right incentives.

Perhaps I gave him too much credit on one ground. One reason he has struggled so as a candidate is that his capacity for empathy, and for understanding people with different life circumstances than his own, appear to be at a borderline Asperger’s level. This has hurt him as a candidate, but it could also adversely affect his decision-making, such as with regard to distributional issues and creating broad-based opportunity, even if we posited that he had full implementation power plus the right incentives. Someone who is apparently emotionally convinced that his worldly success shows that he is better than other people, and deserves better, and that they are just envious if they feel otherwise – beliefs that he appears to sincerely hold, may not be well-suited to making good choices in 2013 or 1935, even if he’d have been fine in 1956 or 1988. But the more general problem I posited is that he would not in fact, as president, have either the posited power or the right incentives.

Anyway, let’s pivot from that to his tax plan. Now, this is obviously a campaign document, responding to the vicissitudes of both the ongoing Republican primary contest and the anticipated general election contest that would follow. But the record is very clear, going decades back, that presidents generally end up trying to do what they proposed during the campaign, even if their earlier motivations reflected pre-election circumstances. But anyway, Glenn Hubbard, who is one of Romney’s top economic advisors and very probably hopes to reprise his prominent Bush II Administration role if Romney wins, tells us: “If you take the spending and tax pieces together, it’s a narrative of the policy agenda and life under a Romney presidency.”

A quick word in passing: If there is going to be a Republican president, one would certainly hope that he was being advised by the likes of Glenn Hubbard, who is intellectually serious and knowledgeable. Then again, I don’t personally feel that Glenn’s presence in the Bush II Administration led to good tax or budget policy, although I agree that it probably would have been even worse had he not been there. (For example, given the big tax cuts that they were bound to shoot for in 2003, at least Glenn induced them to push towards corporate integration, a policy that, if done right, clearly makes sense.)

Romney may also be getting tax policy advice from Columbia law school dean David Schizer , whose support for Romney is attested to here. As with Hubbard, this could be viewed as good in two senses: as evidence both that Romney is in fact getting tax policy advice from smart and knowledgeable people, and that he has a preference for getting advice from such people.

OK, one last thing before we get to the tax plan itself. I’m sure that its wiser proponents, if asked to defend it candidly and in private, would note that, insofar as it is reckless and fiscally irresponsible (as I think it is), this should be placed in the Republican political context that inevitably constrains Romney. After all, just look at how much more reckless and crazy the other Republicans’ plans are. Romney is definitely signaling that he is less far out past the Oort cloud than they are. And while this has electoral calculations behind it as well (it’s presumably part of the general election pivot towards the center that he is planning), I’d accept that it correctly depicts an actual difference between him and the other Republican candidates.

But what about the plan itself? Given the length of this blog post, I will save this discussion for my next one.

No comments: