A Much Needed Win

It seems that we suddenly have a presidential campaign. Only a few days ago, the media was preparing Governor Romney's obituary, concluding that his thus far moribund campaign was essentially over. However, Romney's performance in last night's presidential debate exceeded all expectations and, for his supporters,
their wildest hopes. He managed to dominate the discussion, putting a befuddled President Obama on the defensive, while presenting himself as well-informed, presidential, and likable.

One of the most telling signs of Romney's successes was Obama's body language throughout the debate. The president was consistently scowling, grimacing and shaking his head in disagreement. He looked confused, unprepared and ill-at-ease. At one point, a camera shot of the backs of the two candidates revealed that while Romney was standing straight and tall, Obama had nervously bent his knee and was rolling his foot behind the podium.

Obama's jittery-ness was in stark contrast to Romney's poise—both in his body language and his speech. The governor was clearly well-prepared and not only defined the scope of the discussion but had reasonable and succinct responses to every attack from the president. This left Obama with little choice but to continuously harp on tired and refuted talking points; for instance, the ineffectual attack on corporate jet owners and constant reiteration of a bogus $5 trillion tax-break.

Yet what was most interesting about Romney's performance was that he displayed a couple of characteristics, previously absent from his campaign, in the most flattering manner. First, he had a clear and convincing message. He carefully outlined his thoughts and principles on a wide-array of issues and policies. While the president claimed Romney did not offer specifics, this charge fell rather flat. In contrast to his campaign so far, Romney was a man of ideas and solutions. He offered a vision for the country, which displayed that he could succeed as a leader.

Up until the debate, this has been a horrendous failure of the Republican campaign, which has largely focused on attacking the president without offering much in the way of alternatives. There was some hope that by bringing the wonky Paul Ryan onto the ticket, that Romney would delve into policy. However, the opposite seemed to happen, with Ryan's intellectualism being silenced in favor of Romney-esque stoicism. This, as the campaign's poll numbers showed and the pundits screamed, was a foolish tactic.

However, last night's volte-face appears to have moved the campaign in the needed direction. CNN's live tracker, which followed the real-time sentiments of undecided Colorado voters, confirmed the merits of offering arguments about policy and principles. When either candidate spoke about his ideas the voters responded favorably, when they attacked their counterpart the voters soured. It seems that despite the accepted "wisdom" that negative campaigns work, voters want to hear proposals.

Second, Romney finally shed the defensive stance he has held throughout the campaign. Previously, Romney frequently looked like he was trying to back away from an issue or deny responsibility. This made him appear to be weak and indecisive and allowed Obama's attacks to stick. However, last night he was a different man. He owned his record and beliefs and explained why they are right. He fought back against the president's distortions and explained nuances in a clear and reasonable manner. This made Obama look petty and dissimulative, while giving the viewer a logical argument about the veracity of the Romney-way.

This simple tactic of owning and then explaining his principles and beliefs was an enormous step toward strengthening Romney's campaign. Voters want a leader who is confident, who has ideas, and who is able to explain his policies in a nuanced but understandable manner. The Romney who was on display last night succeeded at all of this.

Hopefully, he will maintain this momentum. Obama will undoubtedly come to the next debate more prepared. Romney has to continue to shine, turning his campaign into an expression of his vision for the country, while defending his principles and policies with poise and candor. While the election is quite near, Romney still has time to make his case. A Romney in this mold will be hard to beat.

Ship the Outsource Debate Overseas

Outsourcing (or offshoring) seems to be the political battleground of the week. Both presidential campaigns have launched into a finger-pointing offensive of claiming their opponent has contributed to the shipment of American jobs overseas. The outsourcing debate was sparked by an investigation into and a series of poltical attacks at Romney's activities at Bain. The Republican campaign retorted with recriminations regarding the handling of stimulus money.

While we'll leave the fact-checking to the newspapers, the entire debate is somewhat ridiculous, particularly from Romney's perspective—the supposed voice of economic reason during this electoral season. It is based on the ludicrous proposition that outsourcing jobs is an absolute negative for the U.S. economy. In simplistic political-speech, which assumes Americans are just too stupid to understand basic economics, the argument holds that when a company either hires a foreign company to perform a specific task or moves operations abroad that it is a unilateral loss for the domestic economy.

The first time I saw this "negative" ad from the Obama campaign, I could not help but think that the gist of the comments was true and Romney should proudly own it.

But such arguments ignore basic economic truisms that are taught in any introductory economics course. Trade, whether domestically or internationally, benefits everyone. The simple concept of comparative advantage—the situation in which one producer can produce a good relatively cheaper than its competitors—underpins this logic. By definition, every producer will have a comparative advantage, thus yielding an economic logic for specialization and trade.

In simple language, this is precisely what motivates outsourcing and offshoring. Other countries have a comparative advantage in labor. It is thus relatively cheaper for them to "produce" labor. Since they are comparatively better at labor, trade frees up American resources to do what we are better at (such as research and development). We can then, for instance, trade our research for their labor, creating products that benefit both sides of the transaction at a cheaper price. This specialization and trade helps both economies grow.

The real world is naturally more complicated (short-run costs of reallocating resources are very real), but the essence of the argument holds. Outsourcing and offshoring are good for the U.S. economy (if they are done without distorting effects of government meddling). But one must look at the entire effect, not just the outsourced job to appreciate this dynamic.

So how does outsourcing help? An outsourced job means that a domestic company can now get the work done for a cheaper price (it would not outsource the job if it was more expensive to do so). This frees up resources (money) to put to other uses. A company can either cut costs, passing along savings to consumers (maybe in an attempt to increase market share) who can then save or purchase more, or reinvest the saved money into expanding the business. In truth, both probably occur and both help grow the economy. As is usually the case, a growing economy creates new jobs, most likely in sectors in which the country has a comparative advantage.

If one thus looks at the economy on a holistic level, a cheaper input to production (cheaper labor abroad) will generally help an economy grow and create more jobs. A smart business leader, economist, or president will acknowledge that it is best to have the most efficient producer or worker do the job, regardless of national borders or any other consideration. Outsourcing is thus one piece of a broader economic puzzle, which allows an economy to operate at its highest and most efficient level.

But our politicians never try to explain this basic economic fact. Whether they think Americans are unable to comprehend such simple economics or are they beholden to special interests, both the left and the right seem to be stuck to a pseudo-protectionist argument. Arguably, much of this tenacity to the outsourcing-is-evil argument is due to political expediency. It is much easier, in a world of sound-bites, to make a a simple accusation of sending jobs to India, than explain an economic principle. But such expediency is damaging, not only by dumbing-down political discourse but by empowering certain groups to take-advantage of such language to further their own narrow desires (think unions and noncompetitive industries who want protection).


The Romney campaign would be wise to take a new angle in this debate. Much as New Jersey Governor Chris Christie does, Romney need to take an approach of separate, own, and educate. He needs to separate the fact from fiction, dismissing Obama's ridiculous conclusions about outsourcing, proudly own what he has done, and educate the people on why such actions are good. In other words, Romney has to stop looking like he is running from some greedy business transactions and start explaining how a smart economy works.

Such a change in tactic would not only benefit the United States by pushing our economic policy toward sound principles, but greatly help the Romney campaign. He'll regain the image of a responsible and educated economic steward, earn respect for standing up to smear campaigns and distortions of economic facts, make Obama look like the economic lightweight he is, and rise to a presidential level. It is a novel political strategy, but one that if properly employed will reap tremendous rewards for a candidate who is too often criticized for lacking a backbone.

Chris Christie: In It, To Win It?

The New York Post reports that New Jersey Governor Chris Christie has stepped back from his adamant refusal to run for president and may be jumping into the race. According to the report, Christie will provide an answer this week "after getting lobbied hard from some of the GOP’s top leaders and money men."

The Post states that Christie has offered criticism of the current batch of GOP candidates, arguing they are not providing voters with the answers they are looking for. Christie stated:

I think what the country is thirsting for, more than anything else right now, is someone of stature and credibility to tell them that and say, ‘Here’s where I want us to go to deal with this crisis.’... The fact that nobody yet who’s running for president, in my view, has done that effectively is why you continue to hear people ask [Indiana Gov. Mitch] Daniels if he’ll reconsider and ask me if I’ll reconsider.

Christie's entry would certainly unsettle what has become essentially a two-candidate race. Current front-runners Mitt Romney and Rick Perry have seemingly taken the lead not because of any intrinsic qualities but because they are merely better than the rest of the pool. Romney would certainly do a commendable job as president but is rather bland and not overly appealing to the Tea Party-base. This has allowed Perry to steal part of the spotlight. However, some of his positions and unfortunate gaffes have put the essential independent voter ill-at-ease with his candidacy.

Christie would undoubtedly break the mold. As the pugnacious Republican governor of the very Democratic New Jersey, he has been able to appeal to independents and some Democrats. His no-BS style is precisely what the electorate wants in Washington. In many ways Christie is the opposite of Obama—he is a leader that eschews the pettiness of politicking and pushes through needed and helpful legislation. His early battle with the teachers unions demonstrate his ability to stand behind necessary legislation despite misleading rhetoric from opposition special interests.

Christie is precisely what the Republican Party needs—a candidate that can fire up the base, appeal across aisle, and honestly and forcefully communicate a better way forward. While Obama's odds of reelection are slipping of their own accord, Christie would offer the best chance of a desperately needed change in the White House.

Has Perry Helped Romney?

Dana Milbank has an interesting thesis:  Rick Perry's rapid rise to the top in the race for the GOP presidential nomination has helped former front-runner Mitt Romney.

[Perry's ascent] has, by unburdening Romney of his head-of-the-pack status, released him from the tedious and timid campaign he was running. Relieved of the high expectations, Romney is free to take sides unapologetically in a battle over whether the Republican Party will reclaim its mainstream traditions or remain a protest movement.

Romney, who has led in the vast majority of primary polls over the summer, has recently and summarily been replaced by Perry, who shot to the top following his recent entry into the field.  Perry has strongly appealed to the Tea Party movement, but has caused some consternation among moderates and independents.  His entry has also notably hurt Tea Partier Bachmann, in addition to Romney.


Whatever Perry's immediate success has been, Milbank's argument cuts to the core of the Republican primaries.  Simply put, they are a battle between the moderate establishment and the far-right Tea Party.  Ultimately, the GOP (particularly the far-right) is going to have to decide if it wants to select a candidate that hews the Tea Party line or choose someone that has a greater chance of wooing moderates and thus defeating Obama.  


If Milbank's argument is right, Romney now is in the best position to portray himself as the only one that can beat Obama.  According to Milbank, Romney has successfully began recasting himself a moderate, pro-market, Republican by presenting reasonable conservative economic solutions and announcing a mainstream team of economic advisers, while shedding the fire and brimstone of the Tea Party.  When it comes down to the actual primaries, such a tactic may swing the vote in favor of Romney, who can appeal to the sensibilities of the GOP: "Select me or Obama gets four more years."  The Republican base may be fired up about Tea Party candidates, but if such a candidate cannot beat Obama in a national election, he is useless.