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An economist's view of Romney's challenges

Mitt Romney swept the Maryland, Wisconsin and District of Columbia primaries Tuesday. And now, with the Republican nomination virtually clinched, the former Massachusetts governor must convince Americans he can more effectively moderate their culture wars than President Obama, and get the economy going on all cylinders again.

Conservatives and liberals have rhetorically impaled him for excessive flexibility on social issues and health care.

The facts are that Mr. Romney is an adult, and too much of the national debate is led by over-aged adolescents who only see the world in black and white—some members of the clergy demonstrating 19th Century religious intolerance; tenured academics living off taxpayer subsidies and endowments; and professional pundits catering to ideologically narrow audiences. They embrace unbending views of a perfect America, but none have to win votes and govern for the mass of ordinary folks making moral choices and earning a living in much tougher environments.

As leader of the Mormon Church’s Boston Stake Romney's actions on abortion disturb some advocates of a woman’s right to choose; however, he personally took the mission work of his church to places the rest of us prefer to avoid—drug and crime ridden neighborhoods—to assist the most broken among us.

Fundamentally, Romney is a center-right politician, but as governor of Massachusetts he worked with a very liberal legislature to fashion policies for health care and hot button social issues.

As president, he would do what editorial writers at the New York Times and the Manchester Union Leader are hardly compelled to do: compromise to get something done. However, the Congress would be more moderate than the Massachusetts legislature.

Americans can expect center-right solutions, in tune with the majority of voter sensibilities, and Supreme Court appointees like Justices Kennedy and Roberts, who actually listen to the arguments and weigh the facts in major constitutional cases, as opposed to those reliably voting the liberal line as do the Clinton and Obama appointees.

As an economist, it is clear to me that Mitt Romney deserves a long hard look from working Americans who want a better shot at good jobs and opportunities for their children.

Campaigning in 2008, then-candidate Barack Obama promised to get Americans working again by getting tough with China’s export subsidies but as president, he has blocked action against its most lethal weapon—currency manipulation.

The trade deficit with China is slicing $500 billion off U.S. GDP and costing five million jobs, and Mr. Romney promises to go where Mr. Obama fears to tread.

Candidate Obama chastised President Bush for permitting gasoline to reach $4 a gallon, but as president he says there is nothing he can do. He has continued bans on drilling in the eastern half of the Gulf, off the Atlantic and Pacific coasts, and the richest fields in Alaska, and thrown up onerous regulatory barriers where drilling is still legal. 

Mr. Romney promises to unleash this potential, which could halve oil imports and increase GDP by another $250 billion and create 2.5 million jobs.

On the budget deficit, Mr. Obama’s Millionaires Tax may be good politics, but it would hardly dent the $1.3 trillion budget deficit. That requires taming runaway Medicare and Medicaid costs, but ObamaCare merely throws more federal dollars at a broken system, and compels private employers to buy more overpriced insurance—its cost controls will be easily gamed by private providers and prove just an additional expense.

Republican solutions, crafted by Wisconsin Republican Rep. Paul Ryan, would give the elderly vouchers to purchase private insurance and block grants to the states to limit federal commitments. Those would only shift burdens rather than solving the fundamental problem—health care is simply too expensive in America.

Thanks to ineffective rationing—all systems ration health care and every other economic good—and higher costs for everything from ambulance services to administration, Americans pay about $8,000 per person for health care, while the Germans and Dutch, also with private insurance systems, pay only $4,000.

Voters should require Mr. Romney to explain how he will improve on Mr. Ryan’s solutions before donning an “I’m for Mitt” button.

Mr. Obama’s financial reforms have instigated the concentration of a record 60 percent of all saving and checking deposits among a handful of Wall Street banks. Those aren’t writing enough loans to finance new homes and small businesses, greatly handicapping those historically powerful engines of jobs creation.

Mr. Romney’s deep financial experience much better qualifies him to tame Wall Street—but he has told us little about what he will do other than reform Mr. Obama’s reforms.

The contrast with President Obama should require Americans to give Mr. Romney a good look, but he owes all of us more specifics on many tough issues if he is to deserve the top job.

Peter Morici is a professor at the Smith School of Business, University of Maryland School, and former Chief Economist at the U.S. International Trade Commission. Follow him on Twitter @pmorici1.

Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and widely published columnist. He is the five time winner of the MarketWatch best forecaster award. Follow him on Twitter @PMorici1.

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