Our Debate Questions, Their Answers: The Ticker
On Oct. 10 Bloomberg View editors posed a dozen questions to Republican presidential candidates in advance of the Bloomberg-Washington Post economic debate at Dartmouth College. We didn't get anything close to comprehensive answers to these questions, but more than a few candidate responses were germane if not directly on point. So here's a brief recap of what we asked, and what we heard.
1. We asked whether, as many business executives maintain, the economy is suffering from a lack of demand -- and what should be done about it.
In a nearly two-hour debate, the word "demand" arose fewer than half a dozen times and not once in the context of what ails the U.S. economy. Representative Michele Bachmann has a penchant for inaccurate, incoherent or merely out-there arguments, but she spoke for the group consensus in pinning the blame for a sagging economy on government in general and regulation in particular. Bachmann did separate herself from the pack by stating, implausibly, that "the number one reason that employers say they are not hiring today is Obamacare." Among Republicans running for president, lack of demand for goods and services does not seem to be an issue.
2. We asked if the U.S. relationship with China is sustainable and how it might be altered.
We got an answer here -- two, actually. Mitt Romney came out guns blazing, claiming U.S. politicians had been "played like a fiddle by the Chinese" and vowing to officially charge China with currency manipulation at the WTO. He dismissed the threat of a trade war with China on the grounds that China needs the U.S. too much. Jon Huntsman, a former ambassador to China, took the opposite tack, saying that as the two largest economies in the world, the U.S. and China had to "find common ground" to advance trade, which is a "huge job creator" in the U.S.
3. We asked what the role of the Federal Reserve should be.
Gauging from candidates' responses, the best role might be "duck and cover." Newt Gingrich called Fed chairman Ben Bernanke "disastrous" and called for his head. Ron Paul, whose longstanding Fed-bashing is grounded in ideological principle (Gingrich, by contrast, operates more like a political purse-snatcher who hits and runs), blamed the Fed for artificial booms, bubbles and busts. If the Fed had any friends around the debate table, they were well-camouflaged.
4. We asked what to do about the sovereign debt crisis in Europe.
We didn't get an answer. Romney asked whether Greece is "going to default on their debt, or are they not? That's a decision which I would like to have input on if I were president of the United States . . . ." Unfortunately, Romney didn't say what his input would be. (Rick Perry, who suffers a near-catastrophic loss of signal strength -- no bars! -- whenever he crosses the Texas border, was not asked his opinion on Europe.)
5. We asked about inequality.
Perhaps the most pertinent answer we heard (and heard and heard again) was Herman Cain's recitation of his 9-9-9 plan, which would lower taxes on the wealthiest and raise them on the poorest. Enough said.
6. We asked about the grievances of Wall Street protesters.
Newt Gingrich maintained that the protesters with whom he disagrees all leave trash behind while the protesters he likes -- presumably of a Tea Party persuasion -- all clean up after themselves. We didn't learn much from this except that there appears to be a direct correlation between cleanliness and godliness.
7. We asked about tax reform.
Jon Huntsman rose to the task, citing his plan that "actually wipes clean all of the loopholes and deductions." Huntsman wants to phase out corporate welfare and subsidies and reduce rates so that the whole package is revenue-neutral. "This is right out of what the Simpson-Bowles Commission recommended -- a bipartisan group of people that took a thoughtful approach to tax reform," he said. Huntsman's plan, however, quickly ceded the debate spotlight to Herman Cain's 9-9-9 plan.
8. We asked about economic growth stalling in the U.K. following the government's austerity measures.
If the candidates are aware of the British model, they are unfazed by it. Spending cuts (albeit generic ones unencumbered by actual constituencies) remain the order of the day. As Romney said, "The American people want to see growth and jobs, and they believe that the right way to do it is by cutting back on the scale of government, and they're right."
None of the candidates was required to confront this source of cognitive dissonance on the right. In responding to a video clip of Ronald Reagan citing the necessity of compromise in Washington, however, Rick Perry gave a response that might apply equally to the question above. "Well, I think we are certainly talking about different times," Perry said, before saying that Reagan had compromised on raising taxes but had never gotten spending cuts in return. The implication was clear: there can be no compromise with the enemy and certainly no tax hikes. The clear implication was that Reagan's compromise led to failure in the form of a larger government.
10. We asked if the candidates would cut two-thirds of the federal budget (in lieu of enacting a combined tax-hike-and-spending-cuts package) in order to bring down U.S. debt to a level that is internationally recognized as sustainable.
We didn't hear anything Tuesday night and we're not holding our breath.
11. We asked about reducing principal in order to relieve the housing debt overhang (a move economist Martin Feldstein just endorsed in the New York Times).
There was no direct response to this, but Ron Paul called again to get the federal government out of the housing market. Paul expressed sympathy for those who "lost their jobs. They lost their houses." But he offered no remedy beyond "a free-market economy without a Federal Reserve system, with sound money. If you don't have that, you're going to continue with the bubble."
12. We asked if the candidates would champion any fiscal or monetary policy to juice the jobs market.
There was much talk of jobs, but none of using monetary or fiscal levers to further any policy but retrenchment. It was an article of faith at the table that reduced government spending would lead to job creation. The mechanics were not explained.
(Francis Wilkinson is a member of the Bloomberg View editorial board.)