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the national interest

Romney Just Making Stuff Up Now

I read a book today, oh boy.

A couple weeks ago, Mitt Romney quoted Noam Scheiber’s book about the Obama administration’s economic rescue, The Escape Artists, in a highly misleading way. Yesterday he did it again, only this time Romney altered his description so that whatever shred of truth that once existed in his telling is gone, and nothing remains but a pack of lies. Here’s Romney’s incredibly false account:

A book that was written in a way that’s apparently pro-President Obama, was written by a guy named Noam Scheiber and in this book he says that there was a discussion about the fact that Obamacare would slow down the economic recovery in this country and they knew that before they passed it.  But they concluded that we would all forget how long the recovery took once it had happened, so they decided to go ahead.  The idea that they knowingly slowed down our recovery in order to put in place Obamacare, which they wanted and they considered historic but the American people did not want or consider historic, is something which I think deserves a lot of explaining …

The lies. Let us tote them up.

First, and most importantly, at no point did anybody in the Obama administration ever believe that passing the Affordable Care Act would “slow down the recovery.” Nothing close to that is ever described. Romney presents the book as revealing that Obama believed health-care reform, through its "big gummint" regulations, would harm the recovery, but cackling that he wanted to pass it out of some belief that Americans wouldn’t notice mass economic suffering. This bears no relationship to anything the book says.

In the book, Noam Scheiber asked Larry Summers if he believed that the decision to pass health-care reform cost Obama the chance to pass a second stimulus, and thus came at the cost of a faster recovery. Summers answered that he did not think the health-care law prevented a second stimulus, but that even if that were the case, he would have supported it anyway.

Not only is it false for Romney to say Obama “knowingly slowed down our recovery,” it’s not even true that Obama knowingly passed up a chance to accelerate the recovery. The notion that anybody in the administration believed that the health-care law would actually slow down the recovery is complete fiction. It does not appear in the book anywhere and it’s pretty obviously untrue.

What’s more, the notion that the book is “pro-President Obama,” and hence some damning indictment that slipped into a laudatory account, is also wrong. You don’t have to read the book to know this. You don’t even need to listen to my account (I have read it). All you need to do is read all the way to the book’s subtitle: “How Obama’s Team Fumbled the Recovery.” That is not the subtitle of a laudatory book.

Noam — not Obama or his aides — believes that Obama should have shelved health-care reform in order to pass more stimulus. I’ll note that, according to Romney’s most frequently professed theory, stimulus made the recovery slower. (“[Obama] bailed out the public sector, gave billions of dollars to the companies of his friends, and added almost as much debt as all the prior presidents combined. The consequence is that we are enduring the most tepid recovery in modern history.”) So, by Romney’s analysis, shelving health-care reform to pass a second stimulus would have slowed down the recovery even more.

Having stripped away the multiple layers of distortion Romney has coated onto his account, at the bottom there is actually an intellectually interesting question. Did Obama blow it by turning to health-care reform rather than passing a second stimulus? That’s the case Noam makes in his book (though it’s primarily a narrative rather than an argument), and has continued to press. If Obama loses his reelection bid, some version of this will become the primary liberal narrative: He failed because he neglected to get enough stimulus.

Obviously, we can’t know the answer to a counterfactual. But the case strikes me as extremely weak. Health-care reform was the culmination of a legislative consensus built up over years among policy wonks, elected officials, and interest groups. There was no such consensus for any additional stimulus in 2009 or 2010. Even the stimulus Obama did pass came as a huge shock to the system.

Two weeks before Obama took office, the Congressional Budget Office forecast that the budget deficit would top one trillion dollars. The general consensus at the time was that this news demonstrated the need to limit the size of the budget stimulus. “The forecast Wednesday of a jaw-dropping $1.2 trillion one-year federal budget deficit will make it harder for President-elect Barack Obama to win broad support for a massive stimulus package that would add even more to the red ink,” McClatchy newspapers reported. “Both figures substantially understate the problem, however,” reported the Washington Post, “If Congress approves Obama's request for nearly $800 billion in spending and tax cuts, this year's deficit could easily soar to $1.6 trillion.”

This is a fair representation of respectable opinion at the time: The deficit was the central problem, and anything that made it “worse” was inherently suspect. It might have been possible for Obama to go over the heads of deficit-skittish elites, but the American public was also clamoring to reduce the deficit (or, at least, utterly in disagreement with the premises of Keynesian economics). Obama needed the support of moderate Republican senators to pass his first stimulus bill. He got just three of them, at the very peak of his popularity, and all of them almost certainly regretted their support. (Two of them, Arlen Specter and Olympia Snowe, were basically driven out of the party.)

In short, there was no public base of support for more stimulus — if anything, the public believed that cutting the deficit would help the economy. There was little support among the members of Congress Obama needed to pass anything. And the political incentives drove Republicans to oppose him even if he could somehow convince them. (The evidence suggests presidents have little power to persuade the public to change its mind — even Franklin Roosevelt failed to persuade Americans to support deficit spending in the face of economic crisis.)

It’s fair to say that the administration miscalculated lots of things about the economy. Like private-sector forecasters, it underestimated the severity of the 2008 crash. And it foolishly guessed that the size of the stimulus it submitted to Congress would grow rather than shrink. But did the miscalculations matter? That seems highly unlikely. The reason Congress trimmed down the stimulus was that Congress regarded it (and it was almost universally described) as enormous to begin with. It’s possible that if Obama had first submitted a larger stimulus, Congress would have trimmed it down from a higher starting point, but it’s also possible Congress would have killed the entire thing. There was no force to support more stimulus in 2009 or 2010, and after that, of course, the House was captured by fanatically anti-stimulus Republicans. What Noam calls “Obama’s original sin” was actually Ben Nelson’s original sin.

In any case, Noam’s counterfactual belief that Obama could have passed more stimulus is at least non-false by virtue of being hypothetical. Romney’s increasingly dishonest citation of it is simply more evidence of his disregard for truth.

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