Save Us From Rick Perry (And Other Thoughts on the Republican Nomination Race)

With the Iowa Straw Poll done, it's looking like the Republican presidential field is starting to take shape.  Ron Paul has loud supporters, but he'll fizzle out like he always does because he's not religious enough, and business interests won't back him because they know his nutty economic ideas are going to run them off a cliff were he to come anywhere near power.  Then Tim Pawlenty just dropped out after finishing third in the straw poll.  Honestly, Pawlenty's no big loss either.  The guy talks and acts like a serious person, but every time he opens his mouth to talk about the economy, anyone with a clue realizes that he's just not very bright.  Sarah Palin keeps buzzing around, driving her Constitution bus to these events, but people have heard her speak enough to realize that a Palin presidency would go nowhere.  This leaves a few contenders, who I'll write some stream-of-consciousness thoughts on, mostly about their economics, since that's what I pay most attention to.

1. Michelle Bachmann-- I hate to acknowledge that there's any chance that she'll become President, but she presents herself well (in the sense that she occasionally looks and acts "serious," even though she definitely has crazy eyes.  Don't believe me? Check out her Newsweek cover.

Her ideas are equally nutty-- she's an ideologue who "doesn't compromise".  Her idea of economic policy is to cut taxes and hope magic happens.  With a Republican Congress, the prospect of a Bachmann presidency is terrifying.

2. Jon Huntsman-- I admittedly don't really know much about him.  I get the impression he's very similar to Romney: a Mormon who can think straight.  So, given the state of the modern Republican Party, not a bad proposition, though I don't see much enthusiasm for him.

3. Mitt Romney-- As governor of Massachusetts, he passed state-wide ObamaCare.  As a presidential candidate, he's running as fast as he can away from it.  But, all things considered, Romney isn't stupid, so I think taking a nuke to the American economy thinking it'll fix it is unlikely if he becomes President.  He's certainly a voice for low taxes and (some) deregulation, but I think a Romney presidency wouldn't be a disaster.  I could actually see substantial good coming out of it on the economic front-- Republicans in Congress are opposed to further stimulus under Obama because the Republican Party's current policy platform is, roughly speaking, "Do the opposite of what Obama wants."  But Romney's top economic adviser is Greg Mankiw, who, while conservative, still uses models in his economic analysis and as such has no choice but to realize that the economy needs... more stimulus.  And, while stimulus under Obama is "job-killing," the same stimulus under Romney could probably pass a Republican Congress, and I would take that in a second.

4. Rick Perry-- This one scares me more than any other.  Perry is an evangelical Christian with conservative social views.  Fine.  So was George Bush, but the only thing that came out of that was some noise about gay marriage which ended in nothing, and died down after a couple of years.  What really scares me about Perry is that he'll run on his "Texas jobs miracle" platform and people will actually buy it.  I wrote about the Texas "jobs miracle" here.  Put simply, Texas has been adding jobs... because it has a rapidly-growing population putting downward pressure on wages, and the cost of living (thanks to lack of zoning laws) is low enough that people take those jobs.  Now, the rapidly growing population aspect is neither good nor bad, and the low cost of living is actually a good thing, I think (cheap housing in general is good).   But here's where the "solution" falls apart.  Texas's low wages, lack of state-level regulations, and low taxes attract businesses from other states, which like cheap labor and don't like taxes.  Now, that would all be well and good, except that it doesn't make for a national solution.  As I pointed out in that earlier post, a huge chunk of the jobs being added are minimum-wage jobs that attract immigrants (legal and illegal) and migrants from other states.  So, while the state is adding jobs, it's not adding them nearly as fast as it should be to keep pace with the population growth, so unemployment is actually higher than it is in places like New York, Maryland and Massachusetts (which passed "job-killing" RomneyCare).  So it doesn't take a genius to realize that Perry's "solution" is likely to be the same as it was in Texas-- low taxes and deregulation.  But if you turn every state into Texas, there's nowhere for those jobs to come from-- all the states can't lure jobs away each other.  Meanwhile, individuals are still overindebted, so the depressed wages that would come with a rise in business power would actually make the debt problem worse-- if people have less income, they can't pay down debts.  If they don't get their balance sheets in order, they won't spend.  And the economy will stay depressed.  But I'm afraid America could well elect Rick Perry, watch him push through dangerous policies by promising a national "Texas miracle," and end up with a persistently depressed economy.