Federal Data: Health Insurance Premium Growth Has Slowed After Romneycare

In 2010, John F. Cogan, R. Glenn Hubbard, and Daniel P. Kessler published in Forum for Health Economics & Policy a report (“The Effect of Massachusetts’ Health Reform on Employer-Sponsored Insurance Premiums”) on the effects of Governor Mitt Romney's 2006 health-care reform in Massachusetts.  This report suggested that, up until 2008, these reforms (hereafter referred to as "Romneycare") led to a relative increase in health-insurance premiums.  This report was cited numerous times by opponents of Romney and helped fuel the belief that Romneycare caused health-insurance premiums to skyrocket in Massachusetts (even though Cogan et al. did not make this claim).

However, new data has now come out (covering through 2010), and this data tells a rather different story.  It instead suggests that Massachusetts's health-insurance premium growth declined relative to the nation as a whole in the years since Romneycare has been enacted.  From 2006 to 2010, employer-sponsored health-care premiums for a family rose about 19% in Massachusetts, while they rose about 22% in the US as a whole.  Compare that to the period between 2002 and 2006, when Bay State family premiums increased 40% and US family premiums rose only 34.5%.  Family premiums have seen the greatest reduction in growth since Romneycare; individual premiums have also slowed their rate of growth, though by not as much.  For both family and individual premiums, the rate of growth fell below the national average in the period between 2008 and 2010.

The analysis below will look at the growth of employer-sponsored health-insurance premiums for families and for individuals prior to 2006 and after 2006.  It will also look at the difference in growth rates for health-insurance premiums for businesses in the small group market (those with under 50 employees) and with businesses with more than 50 employees.  The numbers shown are average premiums for families and individuals.  I use the same source as the Cogan study mentioned above, the federally sponsored Medical Expenditure Panel Survey.  (I also borrow some of my methodology from the Cogan study as well.)

Looking at employer-sponsored health-insurance premiums is a helpful lens for looking at the effects of Romneycare on the insurance market.  According to the Bureau of Labor Statistics and the Census Bureau, 69% of Massachusetts residents under 65 were covered by employment-based health insurance in 2010.  Nationally, a little over 58% of US residents under 65 were covered by employment-based insurance.  So a significant portion of the Massachusetts insurance market is connected to employment.

I.  Family Premiums v. Individual Premiums in Massachusetts

The following tables show the percentage growth in average family and individual premiums for the United States as a whole and Massachusetts during two periods: 2006 to 2010 (the four years after Romneycare) and 2002 to 2006 (the four years before it).  Looking at the years prior to Romneycare's passage will give some sense of the overall growth rate of Massachusetts premiums before reform was enacted.  Situating Massachusetts's growth numbers in the greater context of time and national trends will help evaluate the arc of the state's premium growth after Romneycare.  For each period, I give the raw difference in percentage growth between Massachusetts premiums and those of the nation as a whole.  A positive difference means that Massachusetts premiums are growing more quickly than those of the nation as a whole; a negative difference means that they are growing more slowly.

These charts also provide a raw differential for the differences between those two periods (arrived at by subtracting the 2010-2006 difference from the 2006-2002 difference).  Under the circumstances explored in the present analysis, a positive differential suggests that Massachusetts premiums after the passage of Romneycare curved even more upwards relative to the nation as a whole; a negative differential suggests that, after the Massachusetts health-care reform, the rate of premium growth slowed relative to the nation as a whole.

A. Average Family Premiums
	2006-2010	2002-2006
US Premium % Growth	21.9%	34.5%
MA Premium % Growth	18.8%	40.0%
Difference in Growth (MA-US)	-3.1%	5.5%
MA/US Differential 06-10 v 02-06	-8.6%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.D1, 2002-2010

B.  Average Individual Premiums
	2006-2010	2002-2006
US Premium % Growth	20.0%	29.1%
MA Premium % Growth	21.7%	32.7%
Difference in Growth (MA-US)	1.7%	3.6%
MA/US Differential 06-10 v 02-06	-1.9%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.C1, 2002-2010

Looking at the raw differences and differentials does not entirely reveal the precise magnitude of the change in premium increases for Massachusetts, so here's another chart showing the percentage premium increase in Massachusetts as a percentage of the US percentage premium increase.  The US percentage increase is equal to 100%.  So, for the 2002-2006 period, family premiums in Massachusetts grew 40%, while they grew 34.5% in the US; this would be represented as 116% in the chart below, as 40% is 116% of 34.5%.

C.  Premium growth compared to US Growth (US Growth =100%)
	2002-2006	2006-10
MA Family Premiums	116.0%	85.8%
Ma Individual Premium	112.1%	108.7%

This data suggests that family plans in the Bay State have witnessed the largest decline in growth.  Situating Massachusetts within a broader, state-to-state context makes this decline in premium growth even more striking.  By 2010, Massachusetts had the third-lowest average family premiums in New England (Vermont had the lowest, and Maine's family premium was $30 less than Massachusetts's) and had lower average family premiums than a number of other states in other regions, including New York, Illinois, Delaware, and Florida.  Often held up as an example of a successful "red state" model on health-care as well as other issues, Texas has been less successful at slowing the growth of premiums than Massachusetts.  The gap between these two states has shrunk since Romneycare has been enacted.  The average family premium in Massachusetts was about $600 more than the average family premium in Texas in 2006 ($12,290 vs. $11,690).  In 2010, the difference between average family premiums had declined to less than $100 ($14,606 vs. $14,526).

Health-insurance premium growth did not slow as much for individuals as it did for family plans.  However, it still did slow in absolute terms and relative to the nation as a whole.  By the the 2008-2010 period, the individual premium in Massachusetts grew about 5% slower than it did for the US (Bay State premiums grew 11.9% while US premiums grew 12.6%), so the gap between the two premium growth rates did narrow over the period.

It is also perhaps worth comparing not the magnitude of health-insurance premium growth but the size of premiums themselves for the US and Massachusetts.  Below are two charts comparing US and Massachusetts average premiums for family and individual employer-sponsored health insurance plans.  Listed is the average Massachusetts premium, the average US premium, and the Massachusetts premium as a percentage of the US premium (a percentage over 100% means that the Massachusetts premium is larger than the US premium).

D.  Average Family Premiums (in US $)
	US	MA	MA as % of US
2010	13871	14606	105.3%
2009	13027	14723	113%
2008	12298	13788	112.1%
2006	11381	12290	108%
2005	10728	11435	106.6%
2004	10006	10559	105.5%
2003	9249	9867	106.7%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.D1, 2002-2010

E.  Average Individual Premiums (in US $)
	US	MA	MA as % of US
2010	4940	5413	109.6%
2009	4669	5268	112.8%
2008	4386	4836	110.3%
2006	4118	4448	108%
2005	3991	4235	106.1%
2004	3705	4141	111.8%
2003	3481	3496	100.4%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.C1, 2002-2010

In 2010, the average family premium in Massachusetts was closer to the national average after the passage of Romneycare than it was the year Romneycare was enacted.  Indeed, the average family premium actually declined in Massachusetts from 2009 to 2010.  The average individual premium grew a little bit relative to the nation as a whole from 2006 to 2010.  However, this premium had been relatively even larger in the past (in 2004, for example).  It will be interesting to see whether 2011 continued the downward trajectory in individual premium growth hinted at in 2010. 


II.  The Effects of Reform on Premiums for Small and Big Businesses in Massachusetts

The effects of Romney's reforms on small businesses remain a topic of considerable concern.  In order to explore these effects, I have taken a look at the rates of premium growth for companies with fewer than 50 employees (the small group market) and for companies with more than 50 employees.  The tables below, organized according to principles similar to those of the first two tables of this article, compare the growth rates for average health insurance premiums for small and big businesses in Massachusetts and the US.

F. Family Premiums--Small Businesses
	2006-2010	2002-2006
US Premium % Growth	18.7%	30.5%
MA Premium % Growth	23.2%	26.0%
Difference in Growth (MA-US)	4.5%	-4.5%
MA/US Differential 06-10 v 02-06	9.0%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.D1, 2002-2010

G.  Family Premiums--Businesses with over 50 Employees
	2006-2010	2002-2006
US Premium % Growth	22.4%	35.2%
MA Premium % Growth	17.8%	43.1%
Difference in Growth (MA-US)	-4.6%	7.9%
MA/US Differential 06-10 v 02-06	-12.50%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.D1, 2002-2010

H.  Individual Premiums--Small Businesses
	2006-2010	2002-2006
US Premium % Growth	16.3%	26.2%
MA Premium % Growth	14.7%	32.6%
Difference in Growth (MA-US)	-1.6%	6.4%
MA/US Differential 06-10 v 02-06	-8.00%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.C1, 2002-2010

I.  Individual Premiums--Businesses with over 50 Employees
	2006-2010	2002-2006
US Premium % Growth	21.0%	30.1%
MA Premium % Growth	23.4%	33.1%
Difference in Growth (MA-US)	2.4%	3.0%
MA/US Differential 06-10 v 02-06	-0.60%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.C1, 2002-2010

There is an interesting difference in the growth rates of individual and family premiums for businesses with fewer than 50 employees and for those with more than 50 employees.  For businesses with fewer than 50 employees, family premiums have increased at a faster rate relative to the nation as a whole since the passage of Romneycare, but single premiums have increased at a slower rate relative to the national average.  Something like the converse occurs for businesses with more than 50 employees: family premium growth has declined relative to the nation as a whole, and single rate increases have correspondingly slowed compared to the nation as a whole but not as much as small-business single employee rates did.  These numbers complicate any attempt to weigh the effects of Romneycare on small businesses insurance premiums.



III.  2010 Rate Dispute: Potential Implications
There is a potential fly in the ointment of this analysis: in April 2010, the state insurance commissioner vetoed numerous rate increases for the small-group market proposed by a number of major Massachusetts health-insurance plans.  At first, the insurance companies sued to overrule this action.  Then various insurers settled with the Commonwealth to put some rate increases in place.  This legal difficulty does not, however, seem to fully explain why the average family premium actually declined in 2010; since rate hikes were approved, the average premium could easily have risen.

Furthermore, the family small group market witnessed some of the biggest rate increases in the years 2006-2010, so a decline in average premium growth was due to declining growth for premiums for larger employers (i.e., those employers mostly immune to the commissioner's ruling), which suggests that we should not overestimate the effects of this ruling on health-care premiums.  Between 2006 and 2010, the family premium for small group employers in Massachusetts increased faster than it did for the nation as a whole, rising 23.2% while US premiums grew 18.7%.  For employers with over 50 workers, health insurance premiums for a family plan grew slower than they did for US, increasing 17.8% while the national average climbed 22.4%.  Furthermore small group family rates grew 6.5% in 2010 even as larger employer rates shrunk 2.6%.  This dispute may have had some effect on the rate of insurance premiums growth, but it should not be overestimated.

Moreover, many health-insurance groups posted considerable surpluses in Massachusetts in 2010 (Massachusetts health insurance is dominated by non-profits, so "surpluses" are often used instead of "profits").  Three of the four biggest health insurers in Massachusetts (Harvard Pilgrim, Blue Cross/Blue Shield, and Tufts) had surpluses in 2010.  The major Massachusetts-based insurer which lost money (Fallon Community Health Plan) had a smaller loss in 2010 than it did in 2009; in fact, 2009 was a worse year for Massachusetts insurer finances than 2010 was.  So it is hard to say that the rate dispute pushed these plans to the brink of bankruptcy.  For at least the first half of 2011, health insurance companies in Massachusetts were also posting big surpluses, in part because of slowing health-care costs.



IV.  Conclusions and Comments
Obviously, the picture painted by this data is partial.  Health-care costs paid by the consumer are not limited to health insurance premiums.  However, it is perhaps worth noting that, in 2010, various other medical fees in Massachusetts (such as copays for visits to the doctor, deductibles, and coinsurance rates payable by consumers) were lower in Massachusetts than in the nation as a whole.  Moreover, it would also be worthwhile to compare the per capita GDP of Massachusetts residents to health-insurance premiums.  The Bay State has a relatively high per capita GDP, so it would be interesting to explore the change in premiums as a percentage of personal income over time.  Taking into account these details may find a further reduction in health-care cost growth in Massachusetts compared to the US.  As an additional point, looking at average premiums does not tell the whole story of premium growth in a state: looking at the growth of premiums at the low, middle, and high ends of health insurance plans would further reveal some of the implications of Romneycare for health insurance premiums.

This study is more an exercise in correlation rather than causation: it has not conclusively proved that Romneycare caused health-care premiums to slow their rate of growth in Massachusetts.  But it does trouble the common claim that Romneycare uniquely caused premiums to skyrocket in Massachusetts.  Instead, the four-year period after the passage of Romneycare witnessed slower growth than the four-year period before it---both in absolute terms and compared to the nation as a whole.  In the period after 2006, premium growth for families fell below the growth rate for the national average, and the growth rate for individual premiums grew closer to the national average's growth rate.  By the 2008-2010 period, both growth rates fell below the national average.  This trend may not continue, but that is the current trend.

One of the premises of Romneycare was that universal insurance through government mandates and insurance subsidies to the poor would lead to slower growth rates in medical spending and insurance premiums.  The spending growth rate on medical care seems to have declined in Massachusetts, and premium growth has either stayed the same or fallen relative to the national average.  These trends alone do not make Romneycare a success, but they also suggest that health-insurance premium increases may not be a sufficient cause for declaring it a failure.

Time to Go Industrial?

As Mitt Romney struggles in the polls against his Republican rivals (particularly Rick Santorum) for the GOP nomination, it may be time for him to focus more on industrial policy.  Romney has obviously done a lot of thinking on manufacturing policy, so he perhaps should put that thinking to use.  Romney's recent op-ed in the Wall Street Journal, which slams the People's Republic of China for its distortion of the market, suggests that he may be moving in that direction.

Attending to industrial policy could be one way of helping Romney change the public perception that he represents the interests of the top 1%.  According to recent polls, many voters think that Romney's policies would benefit the rich more than those of any other GOP presidential candidate; even 50% of Tea Partiers think that he favors the rich over the poor and middle class.  There's something ironic about this perception, since many on the ideological, "purist" right have hammered Romney's policies as being too sympathetic to the middle class.  But politics is filled with ironies; it's the job of a candidate to address those ironies and change the narrative.  Focusing on restoring the health of the industrial middle class may be one avenue for narrative change.

A defense of manufacturing policy could also pay electoral dividends in Rust Belt states like Michigan and Ohio, where Santorum (who is also trying to stake out territory in manufacturing policy) is running neck-and-neck with---if not outpacing---Romney.  These areas saw manufacturing as a source of wealth, and declines in manufacturing have hit many of these state economies hard.

Say Romney were to run an ad like this:

[Open on Romney in an abandoned, mostly empty warehouse that used to be a factory]

Romney: In 1998, this factory in -------, Michigan provided nearly a thousand middle-class jobs.  A few years later, it was closed down, and a new factory opened up in China.  This story has been repeated in small towns and cities across America for years, and, though it may complain, Washington has chosen not to deal with this issue in a serious way.  Middle America has paid the price for Washington's negligence.

Well, it's time to change that.  Americans are a hard-working people, and, given a level playing field, we can succeed at almost any task.  But the playing field is not level.  When countries manipulate their currencies, violate intellectual property rights, give illegal subsidies to native industries, and raise unfair barriers to US products, the American worker suffers.  As president, I will take steps to correct these trade imbalances, even if I have to step on some toes to do it.  I support the free market, but a lot of the stuff we're seeing is not part of the free market. 

When I'm president, I'll work to ensure that this [gesturing to empty building] is not America's future.  Working together, we can turn this country around and safeguard for future generations the legacy of economic opportunity passed down to us.

Unlike complaining about, say, Santorum voting to increase the debt ceiling, an ad like this would focus on an affirmative case for Romney.  It would help shift the broader political debate from being a process-oriented one (who's up today? will negative attacks backfire?) to a substance-oriented one.

A mastery of policy details is one of Romney's strengths.  To reinvigorate his campaign, he needs to enunciate and defend a distinctive policy vision.

Getting the Message

A new CBS poll adds to the chorus of polls suggesting that the fierce GOP primary is, for the moment at least, taking its toll on all GOP candidates.  This poll shows the following:

The new survey shows the president leading Romney by six points, 48 percent to 42 percent, among registered voters. Last month, the two men were tied at 45 percent each.
Mr. Obama's lead over former Pennsylvania Sen. Rick Santorum, who has surged to a lead in national polls, is eight points: 49 percent to 41 percent.
Romney's drop in support against the president is attributable to a shift among independents. Last month, independents favored the former Massachusetts governor by eight points over Mr. Obama. In the new survey, Mr. Obama holds the edge, leading Romney among independents by nine points.
The president holds double-digit leads over the other two GOP candidates in the race, Rep. Ron Paul and former House Speaker Newt Gingrich. Mr. Obama leads Paul 50 percent to 39 percent - an 11 point margin - and he leads Gingrich 54 percent to 36 percent, a difference of 18 points.

Romney's electability argument has perhaps been dinged a little---not because other candidates are rising in the polls vs. Obama but because Romney has sunk (though he still outperforms other GOP candidates by a couple points or so, according to most polls).  Some of this decline is due no doubt to the nastiness of the primary raising the negatives of all candidates, particularly alienating independents.  Perhaps, when the primary season ends, and the race moves on to the general election, some of those negative associations will fade into the background.

Still, it's worth noting that, in the middle of February 2008, amidst the hard-fought Democratic primary of that year, Obama led McCain by at least half a dozen points according to most polls.  He ended up winning in November by a little over 7 points.  The GOP had better hope that the trend will be different in 2012 (and it has plenty of reasons for this hope).

PA in Play?

Some new polling from the state of Pennsylvania suggests that Santorum is solidifying his support there and is now tied with Romney for the GOP race.  Romney still outperforms Santorum by about 6 points in a possible head-to-head match-up against President Obama:

The statewide poll of 500 Republicans showed Santorum's support more than doubled from 14 percent six weeks ago to 30 percent, putting him in a statistical dead heat with former Massachusetts Gov. Mitt Romney, who increased his support to 29 percent from 18 percent. Santorum's gain was former House Speaker Newt Gingrich's loss, as his numbers here plunged from 35 percent to 13 percent....

Alone among the four Republican hopefuls, Romney was about even with Obama, with 45 percent to the president's 43 percent, in a head-to-head matchup in a poll of 800 Republicans and Democrats in Pennsylvania. Against Santorum, Obama was slightly ahead, 47 percent to 43 percent, among that group in the poll with a margin of error of plus or minus 3.46 percent.

Obama is polling below 50 in a state that has been a key Democratic hold.  If Pennsylvania is in play, the president's reelection bid could face some significant difficulties.  Pennsylvania last went Republican in 1988, when George HW Bush trounced Mike Dukakis.

Big Win for Santorum

Santorum's victories in Missouri, Minnesota, and Colorado provide a big boost for his campaign.  Romney had lowered expectations for last night, but the size of his losses (and his loss itself and Colorado) were a blow to the campaign.

Newt Gingrich, however, may have been the biggest loser last night.  Now, there is no incentive for Santorum to drop out, and Gingrich's claim to be the leading alternative to Romney is considerably weakened.

Inequality: Cultural Controversies

Charles Murray's new book on American inequality, Coming Apart, seems to have some interesting points (I haven't read it yet), but it is also generating some controversy.

David Frum has written an exceedingly biting commentary on Murray, suggesting that Murray's work does not do enough to address the cause of growing inequality and the stagnation of the middle class.  He takes issue with the following passage from Murray:

In one respect, the labor market did indeed get worse for [working-class white] men: pay. Recall figure 2.1 at the beginning of the book, showing stagnant incomes for people below the 50th income percentile.** High-paying unionized jobs have become scarce and real wages for all kinds of blue-collar jobs have been stagnant or falling since the 1970s. But these trends don't explain why [working-class white] men in the 2000s worked fewer jobs, found it harder to get jobs than other Americans did, and more often dropped out of the labor market than they had in the 1960s. On the contrary: Insofar as men need to work to survive - an important proviso - falling hourly income does not discourage work.

Put yourself in the place of a [working-class white] man who is at the bottom of the labor market, qualified only for low-skill jobs. You may wish you could make as much as your grandfather made working on a General Motors assembly line in the 1970s. You may be depressed because you've been trying to find a job and failed. But if a job driving a delivery truck, or being a carpenter's helper, or working on a cleaning crew for an office building opens up, why would a bad labor market for blue-collar jobs keep you from taking it? As of 2009, a very bad year economically, the median hourly wage for drivers of delivery trucks was $13.84; for carpenter's helpers, $12.63; for building cleaners, $13.37. That means $505 to $554 for a forty-hour week, or $25,260 to $27,680 for a fifty-week year. Those are not great incomes, but they are enough to be able to live a decent existence - almost twice the poverty level even if you are married and your wife doesn't work. So why would you not work if a job opening landed in your lap? Why would you not work a full forty hours if the hours were available? Why not work more than forty hours?

Frum's response:

You are a white man aged 30 without a college degree. Your grandfather returned from World War II, got a cheap mortgage courtesy of the GI bill, married his sweetheart and went to work in a factory job that paid him something like $50,000 in today's money plus health benefits and pension. Your father started at that same factory in 1972. He was laid off in 1981, and has never had anything like as good a job ever since. He's working now at a big-box store, making $40,000 a year, and waiting for his Medicare to kick in.

Now look at you. Yes, unemployment is high right now. But if you keep pounding the pavements, you'll eventually find a job that pays $28,000 a year. That's not poverty! Yet you seem to waste a lot of time playing video games, watching porn, and sleeping in. You aren't married, and you don't go to church. I blame Frances Fox Piven.

How you can tell a story about the moral decay of the working class with the "work" part left out is hard to fathom.

A lack of opportunity and the hope of real advancement will in turn lower the incentive to work and to strive.  Faith in advancement for a variety of sectors of the economy will reinforce popular support for the market economy.

Alec MacGillis offers some interesting points on the role deindustrialization has played in increasing inequality.

How About Effective Treatment?

Christina Romer, former top Obama White House official and key figure for the planning and defense of Obama's stimulus package, pens an op-ed today arguing that manufacturing should not receive "special treatment."  I'm not sure what "special treatment" means here: US economic policy is full of provisions that target various economic sectors, so I don't know what "special" targeting would be.  Beyond that semantic ambiguity, let's look at the three categories Romer says defenses of manufacturing fall into: market failure, jobs, and income distribution.  I think there are more than a few problems with each of Romer's criticisms on each point.

On market failures:

Government intervention can be justified on efficiency grounds if the free market won’t work well. For example, when competition in a market is limited, antitrust laws that prevent monopoly can be helpful. 

Romer seems to deny that "market failure" is taking place, but nowhere does she acknowledge that one of the biggest reasons for the decline of manufacturing is that the "free market" has been subverted by many of the US's trading partners, which support native industries to the detriment of American ones.  It would be hard to call the relationship between the People's Republic of China and the USA one that lives up to the principles of the "free market": instead, the PRC funds its industries and throws up barriers to foreign products even as intellectual property rights are not respected.  One defense of a manufacturing policy would be that such a policy would correct the anti-market distortions of global neomercantilism.

On jobs:

A key argument for encouraging manufacturing is to create jobs and reduce unemployment. Unfortunately, those effects are probably small.

Unemployment today is high, but not because of a decline in manufacturing. That decline has been going on for 30 years — and for most of the 1990s and 2000s, the unemployment rate was less than 6 percent.

Today, we face a profound shortfall of demand. That truly is a terrible market failure, and it warrants government intervention. But we need actions that raise overall demand — like a tax cut for households so they have more take-home pay to spend, more aid to troubled state and local governments, and public investments in infrastructure. 

This analysis is partial at best.  It's true that manufacturing jobs alone will not turn around the nation's economic course.  But these jobs have traditionally been higher paying, and the "profound shortfall of demand" that Romer laments has been fed by the decline of jobs for the middle class.  By growing economic opportunities for the working and middle classes (which effective trade and manufacturing policies could do), we can inspire more demand and sustainable economic growth.  Romer's solutions of tax cuts and federal aid to state governments would seem to act more as band-aids than long-term investments for the renewal of the American economy.  Investments in infrastructure are a good longer-term measure, but they alone won't restore the economy.

On income distribution:

A final argument for supporting manufacturing is distributional. Manufacturing jobs are seen as one of the few sources of well-paying jobs for less-educated workers. Indeed, in the four decades after World War II, manufacturing jobs paid more than other jobs for given skills.

But that is much less true today. Increased international competition has forced American manufacturers to reduce costs. As a result, the pay premium for low-skilled workers in manufacturing is smaller than it once was.

Today, manufacturing wages are high largely because production is capital-intensive and technologically sophisticated. As a result, educational requirements have risen. Now, more than half of manufacturing workers have some college education, up from just over 20 percent in 1969.

There are sectors where workers with good educations could earn good wages if the economy were healthy. Why focus on manufacturing to create such jobs?

Romer's points about income distribution have a little more merit, but they still do not fully rebut the claim that manufacturing has traditionally offered more economic opportunity than many of the jobs in the "service" sector of the economy (many of which are now held by people with college degrees).  And, again, factory worker incomes have fallen in part due to foreign competition that is heavily subsidized and supported by foreign governments.

And why focus on such jobs in the first place?  One of the key reasons is that a productive manufacturing sector, rather than being a distraction from high-concept economic activity, actually plays a key role in the discovery of new innovations and new modes of economic growth.

Andy Grove, former CEO of Intel, has been hammering this point for a while: a vibrant manufacturing ecosystem benefits those attempting to create new things and solve old and new problems.  Grove suggests that, if you want to catch the next wave of development, you need to have an in-depth knowledge of manufacturing:

A new industry needs an effective ecosystem in which technology knowhow accumulates, experience builds on experience, and close relationships develop between supplier and customer. The U.S. lost its lead in batteries 30 years ago when it stopped making consumer electronics devices. Whoever made batteries then gained the exposure and relationships needed to learn to supply batteries for the more demanding laptop PC market, and after that, for the even more demanding automobile market. U.S. companies did not participate in the first phase and consequently were not in the running for all that followed. I doubt they will ever catch up. 

These manufacturing jobs play a crucial role in fostering new innovation and paths of economic growth.

There are plenty of reasons to be concerned about the decline of manufacturing.  This decline is not fated: it has been spurred on by decisions made by many in the US policy elite.  I'm not sure that manufacturing does need "special" treatment, but perhaps manufacturing could settle for effective treatment---which is much more than Romer's former boss has thus far provided.

CBO Then and Now

Zero Hedge includes a helpful link to the ten-year report issued by the CBO back in early 2001.  Eleven years ago, the CBO predicted that the US would have an improving debt burden with consistent surpluses and relatively solid economic growth.  The CBO got its projection on mandatory spending relatively right: it estimated that mandatory spending would be $1.9 trillion in 2011, when it ended up being $2 trillion.

However, this report was before the Bush tax-cuts passed, before 9/11 (and the resulting conflicts), and before a decade of economic disappointment.  The CBO in 2001 projected an average real GDP growth of 3.1% a year during the decade after 2001; GDP growth did not even come close to that.

CBO: Promise and Peril

The recently released Congressional Budget Office report on the budget for the next ten years has what might at first seem like good news for the US fiscal order.  It estimates that, by 2015, the national deficit would fall to under 2% of the GDP, often hovering around 1% until 2022 (when the CBO projections stop).  If one subtracts net interest payments on the national debt (which the CBO estimates would increase considerably after 2014), the US federal government would often be running surpluses that would, by 2018, reach around 1% of the federal budget.

The current federal deficit runs at around 8.7% of GDP, so a decline to 1% of GDP would be a big improvement.  Moreover, the size of the federal debt relative to the national economy would begin to decline around 2013, so the United States would, in many respects, be on a firmer fiscal footing.  By 2022, the debt held by the public would be only 62% of the national GDP (compared to the projected 75.1% of GDP in 2013).  That 62% figure would be higher than that of any year during the 1952-2009 period, but the trend is heading in a good direction.

However, there's some bad news: that CBO projection depends upon a number of assumptions, including improved economic growth, no "doc fixes" for Medicare, a decrease in defense spending, and the expiration of the Bush tax-cuts.

On growth, the CBO has little hope for the next few years: it projects that real GDP will grow 2% in 2012 and a mere 1.1% in 2013.  It does hope for a considerable increase in growth in the years after 2013, however.  It assumes that real GDP will grow an annual average of 4.1% in the 2014-2017 period, settling down to a 2.5% average rate of increase between 2018 and 2022.  Those growth numbers are possible, but they assume a much stronger economy than the US has had since 2000.  If the economy does not reach this rate, the deficits would likely be even worse.  And if the economy turns around faster and maintains a stronger rate of growth after 2017, we could see the deficit shrink even more due to increased tax revenue and less spending on various income-stabilization measures.

The CBO baseline projection assumes that defense spending will fall from 4.7% of US GDP in 2012 to 3% of the GDP in 2022.  Since World War II, defense spending has never been less than 3% of the GDP.  It also assumes that nondefense discretionary spending will fall from 4.3% of GDP to 2.6% of GDP.  Under this standard, discretionary spending would fall to the smallest proportion of the national economy seen in decades.  Will that happen?  If not, add some more to the deficit.

If payment rates for Medicare do not fall at the rate they are currently scheduled, the CBO estimates that over $300 billion would be added to the federal debt over the next ten years.

The CBO baseline assumes that revenues will climb considerably after 2012; they would jump from 16.3% of GDP in 2012 to 18.4% of GDP in 2013 to 20% of GDP in 2014.  They would stay above 20% of GDP until 2022.  Part of this increased revenue would come from an improved economy, but part of it would also come from higher taxes.  The CBO projection assumes that the Bush/Obama tax-cuts will expire at the end of 2012 and that the Alternative Minimum Tax will not be indexed to inflation after 2011.  Under this scenario, personal income taxes would climb from 7.4% of GDP in 2012 to 11.5% of GDP in 2022, a historic high.

Based on these projections, extending the Bush tax-cuts would add $2.8 trillion to the national debt over the next decade.  Keeping those tax-cuts and indexing the AMT to inflation would add $4.5 trillion to the debt over the next decade.  Those numbers do not include the increased interest payments such an increased debt would also cause.

If CBO assumptions about increased revenue due to tax increases and certain spending cuts are not met, the seemingly rosy scenario of a declining debt burden relative to GDP does not take place.  Under an alternative scenario in which these non-economic assumptions are not realized, deficit spending remains an average of over 5% of the national GDP and the debt burden would increase; publicly held debt would rise to over 90% of GDP by 2022.  The CBO suggests that decreased tax revenues due to tax-cuts would be primarily responsible for this increase: the deficit caused by extending current tax policy alone would equal almost 3% of US GDP during many years.

It's possible that extending current tax policies could lead to new growth unanticipated by the CBO, though it should be noted that Bush's and Obama's tax policies have led to slower growth that the CBO projects during the 2014-2017 period and slower growth than was seen during the Clinton and Reagan presidencies.

The CBO has some interesting information about entitlement spending.  Social Security spending is currently 4.8% of the GDP, and it is estimated to climb to 5.5% of GDP by 2022; it will stay around 5% of GDP until 2019.  Medicare is estimated to climb from 3.7% of GDP to 4.2% of GDP over the next decade, while Medicaid will climb from 1.8% to 2.5% of GDP.  So Medicaid is estimated to be the fastest growing entitlement over the next ten years.

The assumptions made here by the CBO suggest a radically different federal government than we're used to, one that taxes more and one that spends more on various mandatory domestic programs and less on defense and discretionary programs.

Increased growth with an improved employment picture may be one way of keeping some discretionary and military spending while also not having a much heavier tax burden.  Growth seen during the Reagan or Clinton (or Carter or Nixon or Johnson) years could spur enough increased revenue (combined with some tax reform) to allow the government to continue to meet its obligations and not indulge in radical deficit spending.  Some entitlement reform (especially regarding medical spending) might help bend the curve of government expenditures down.  The CBO assumes that domestic discretionary spending will decrease as a percentage of GDP, and a rigorous approach to cutting waste and appropriately focusing federal energies would help ensure that necessary and advantageous discretionary spending will be kept.

This CBO report suggests that the US fiscal situation is not necessarily at DEFCON 1, but it also implies that the stagnation of the past few years is untenable for the nation's long-term fiscal future.  Growth and reform will be necessary components of fiscal sanity.  As they gear up for the 2012 campaign, Republicans would be wise to attend to these crucial details.

(Crossposted at the Huffington Post)

MA Think Tank: Romneycare Added Less Than 1% to State Budget

Forbes has an interesting story up that includes an interview with Michael Widmer, president of the nonpartisan Massachusetts Taxpayers Foundation.  Widmer says that Romneycare added about $100 million to the state budget:

To pay for extra coverage, however, the state had to find an additional $350 million from its own budget. On balance, RomneyCare costs Massachusetts an extra $100 million a year from its state budget. “Not bad for a state with a $30 billion budget,” Widmer said. 

So, based on this analysis, Romneycare added 0.3% to the state budget----that's hardly a budget-buster.

Combining those numbers with the possibility that Romneycare may have actually slowed the rate of health-care spending growth in Massachusetts, one might suggest that more research into the effects of the law may be warranted.

Showdown in Jacksonville

A few brief points on tonight's debate:

• Gingrich built up a lot of expectations going into the debate, but he often seemed unable to counter Romney's jabs.  His attempt to turn the debate on Wolf Blitzer spun back at him.  These increased expectations made his uneven debate performance seem like more of a defeat.
• Santorum stole some of Gingrich's thunder in his attacks on Romney.  With Gingrich losing support by the day (if recent polling is to be believed), Santorum may find himself gaining in this race.  It might be too early to count Santorum out.
• This was a good night for Romney.  He pushed at Gingrich in a focused, yet restrained, way.  He didn't seem blustery (for the most part) but in command of details and facts.  He often caused Gingrich to back down and swung hard at Barack Obama.  This was one of Romney's sharpest debates.

Thematic Foundations

Mitt Romney has promised to make a forceful argument against Newt Gingrich in order to rehabilitate his campaign, which has recently hit a South Carolina-sized pothole.  Here are some thoughts on what Romney could do to revive his campaign.

Perhaps the most crucial thing that Romney can do is to unite the disparate aspects of his campaign into a focused, principled message.  Romney is known as a devotee of arcane details, and that facility with information may prove useful in governing, but now might be the time to sell a more focused campaign theme.  Romney's team has, I think, been moving in this direction, but it's been knocked off course a little by the Gingrich surge (especially by the tax returns issue, as even Romney advisor Stu Stevens admits).

Many sense that the sotto voce theme of Romney's campaign is his electability, but that empirical principle is not enough to win a primary, especially in a party with a base that enthusiastically replaced Mike Castle with Christine O'Donnell in Delaware in 2010.  Romney's competence with complex administrative apparatuses is also a good selling point, but claims of competence immediately draw the eye to questions of principle: to what ends will this technocratic skill be put?

I've suggested before that Romney could argue persuasively on behalf of a pro-growth, pro-middle class conservatism.  By fighting for a tighter labor market (through tackling trade and immigration issues), Romney could in turn encourage new growth for the middle and working classes, which have increasingly been left behind.  It is possible for conservatives to be concerned about income inequality and stagnating social mobility and to make a conservative case for improving the opportunities for the poor and middle class.

Despite what the media (and some right-leaning pundits) may claim, "progressives" do not have a monopoly on those issues.  Indeed, the kind of expansionist government that "progressives" often desire has only seen its power grow due to income inequality and economic stagnation.  Moreover, the later Bush and Obama years have shown that those who control massive amounts of wealth can gain the most through an expansionist central government: they alone know how to manipulate the government system to make the most for themselves.  There's a reason why GE paid less in corporate taxes (i.e., nothing) than the average business.

A strong case can be made for restoring economic vitality by cutting burdensome regulations, investing in infrastructure and human capital, aggressively protecting US economic interests abroad, putting the financial industry on sound footing, and incentivizing economically productive activities.  And Romney could be just the man to make it.  His experience in the corporate world demonstrates his utter intimacy with the tendencies of modern business---the good and the bad.  His economic policies go beyond tax cuts; for Romney (unlike for some GOP candidates), every economic problem is not a nail waiting for a tax-cut hammer.

The idea would be to run on a platform of restoring economic hope.  That would mean restoring economic growth and pushing for reforms that would help more of the American people benefit from the gains of growth; these two goals are complementary.  With some of his speeches, Romney seems to be edging in this direction, but more emphasis could be placed on the hope of increasing opportunity.  The real political topic at issue is not how much in taxes Romney has legally paid but how to reform the political-economic structure in order to give the opportunity to more Americans to make it to the higher tax brackets and to ensure that even those in lower tax brackets can have some kind of economic security.

It's probably not time for the Romney campaign to hit the panic button yet; if the media senses more blood in the water, a feeding frenzy could ensue.  But now is the time to focus its argument and redirect the energies of the primary cycle.

In addition to that positive point, here are a few don'ts:

Don't go Newtclear: The auditions for the angriest anti-establishment Republican have come and gone, and Newt Gingrich seems to have won that part.  Attempts to outflank Gingrich in nastiness toward Democrats/the media/Barack Obama are more likely to be taken as pandering than anything else.  This doesn't mean that Romney can't hit Obama and his failures hard, but playing the politics of alienation is not a game Romney can or should try to win.  Reagan was bigger than that, and it worked out for him.

Don't be knocked off message: There's going to be a real temptation for Romney to embrace the old version of the Ryan budget in order to distinguish himself from Gingrich, who dismissed it as "right-wing social engineering."  The first Ryan proposal is extremely unpopular (and not exactly realistic in some of its assumptions), and Ryan himself has abandoned it.  Democrats will have a hard time Mediscaring Romney (he is, after all, the man who expanded health-care coverage in Massachusetts), and Romney should not throw this advantage away to score a minor point, one that won't really help him anyways.  For those concerned about Gingrich's stances on policy issues, his dismissal of Ryan's budget is one of the most minor points.  Trying to pander on various faddish right-wing talking points (such as 9-9-9) is not going to win Romney the nomination.  Instead, he needs to focus on building a consistent, conservative campaign theme---even if this theme sometimes runs afoul of the dogma of the moment.

Don't make attacks on Gingrich the centerpiece:  Hitting Gingrich on issues of hypocrisy, his inconsistency on policy, his Washington insiderism, etc. can deliver some benefits.  But Romney should be sure to use these attacks to pivot to a more affirmative case for his own campaign.  A media cycle focusing on how badly Romney hurt Gingrich in a debate will be less helpful for the campaign than one focusing on Romney's proposals and campaign vision.

Florida Shifts

Tonight's debate was an interesting one.  Gingrich has apparently tried to go back to Newt 2.0 mode, by turning down the vitriol and righteous indignation.  It's unclear how convinced voters will be by this change, however, since it comes after Newt 1.0's explosive reappearance in South Carolina.

Romney's attacks seemed to unsettle Gingrich.  At one point, the former Speaker had to pause for a few moments to collect his thoughts to respond.  The famously loquacious politician was at an apparent loss for words.  Romney hit Gingrich hard on his connections to Freddie Mac and his record as Speaker.  Though Gingrich tried, he seemed unable to beat off Romney's criticisms fully.  Meanwhile, Romney kept turning the course of the debate to the failures of the Obama administration and emphasizing Romney's own conservative bona fides (for example, his strong stand on immigration enforcement).

Santorum stressed that his own record was one of consistent conservatism.  He didn't pile on Gingrich, but he didn't refrain from criticizing him either.

It's clear that Gingrich got no winning soundbite moments out of this debate.  His campaign in South Carolina depended upon those.  The lack of fire in this debate may slow Gingrich's momentum.  For the past week, the narrative of his campaign has been one of explosive growth; it's hard to see how tonight will add to that growth rate.  Any slowing in his support could be a signal that momentum has begun to be reversed.  And Romney was able to land some effective blows tonight, muddying Gingrich's claim that he is the true conservative.  Gingrich walked into this debate with great expectations, and he didn't actually deliver.  This was an attempt to sell himself as a candidate who can still win in a restrained debate.  We'll have to see whether the public buys this image.

Gallup Outlier

A poll that's been circulating in the rightosphere today (pushed especially hard by Bill Jacobson over at Legal Insurrection) is this Gallup tracking poll showing Gingrich lagging Obama only by 2 points (48-50).  Some in Gingrichistan are pointing to this poll as evidence of the fact that that Gingrich's new style is paying dividends not only with the Republican base but with the nation as a whole.

There's one problem with this argument, however: this poll is over a month old.  Though this tracking data is featured prominently on Gallup's site (and Gallup doesn't provide a date for it on the main page of its election 2012 polling), it seems to stop by December 15-18, 2011.  So this polling was taken well before Newt 1.0 was unleashed.  (The Gallup chart conflates the GOP nomination polling, which is currently updated, with the general election polling, which is not.)

Many polls taken since then have shown Obama with a much bigger lead over Gingrich---most polls give him around a 10-point (or greater) edge.  Obama's average polling lead over Gingrich has increased over the past few weeks.  Moreover, this poll was probably an outlier even then; other polls taken around the same time show Obama leading by a much larger margin.

So if you're looking for evidence that Newt Gingrich has closed the electability gap, this poll probably isn't it.

"Free" Markets in the 21st Century

The New York Times has a very interesting article about the production of Apple products in the People's Republic of China.  Though Apple used to make products in the United States, it has changed its manufacturing approach over the past decade.

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.” 

I guess "speedy and flexible" is one way to describe that situation.

And, of course, much of what makes the PRC attractive to companies like Apple is less the free market and more government subsidies:

When an Apple team visited, the Chinese plant’s owners were already constructing a new wing. “This is in case you give us the contract,” the manager said, according to a former Apple executive. The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day. 

Clearly, another victory for "free trade"!  Yves Smith has more thoughts on this.

Pyrrhic Victory?

There is no doubt that Gingrich's win in South Carolina is a significant victory for him.  The anti-Romney forces pulled out all the stops in the Palmetto State, and, if they couldn't stop the Mitt Train here, they wouldn't be able to stop it anywhere.  Nor should it be forgotten that Gingrich's vote percentage in South Carolina is the second lowest for any winning candidate in a contested South Carolina primary since 1980; even Bob Dole got 45% of the vote in 1996.  Only John McCain did worse with 33% of the vote in 2008.  Still, Gingrich was able to give new life to his campaign, though the way he won may point to electoral red flags in the future.

Cunningly, Gingrich was able to change the narrative in South Carolina by making it about him.  Between "King of Bain"-style attacks on Romney and his explosions of outrage against the media, Gingrich pushed narratives of Romney's momentum to the background.  Eschewing policy, Gingrich ran instead on performance art.  Despite his long history as a Washington insider and many positions on many issues, he made himself the avatar of "conservative" frustration, victimization, and irritation.  In a Republican primary in South Carolina, that's a good tactic. 

If, however, a general election between Gingrich and Obama becomes a referendum on Gingrich, the former Speaker probably loses.  Obama's mixed record is a hard thing to run on; surely, the White House would much rather run against Newt Gingrich as a cultural and political figure.  Gingrich has proven all too glad to make himself the center of a political race, and the Obama administration will likely oblige him.

Almost twenty years ago, another Democratic incumbent realized this dynamic.  Bill Clinton was able to reconfigure the media landscape by letting the 1996 and 1998 elections be about Newt Gingrich.  In both of them, Republicans lost seats in the House (coming within a few seats of losing the House itself in the latter).  Furthermore, by making Gingrich a central figure of the 1996 campaign, Clinton was able to make what might have seemed a troubled reelection bid a sure thing.  There's a reason why few of Gingrich's conservative House colleagues have endorsed him and why many have outright attacked him.

For a while, Gingrich had run on the narrative that this was a "kinder, gentler" Newt, an older and wiser man who had learned from his past personal and rhetorical excesses.  Gingrich's nuclear (and, at times, self-contradictory) barrage against Romney and the media has shattered that narrative.  We're back to Newt 1.0, the battle plans against which were already drafted by the Clinton White House.

If he wants to be viable as a general election presidential candidate, Gingrich is going to need to move beyond red-meat appeals to the conservative id and beyond the politics of personality.  As Conn Carroll at the Washington Examiner has noted, Gingrich's net approval rating with the American public is around -30.  He remains an exceedingly polarizing figure to the public at large.  Gingrich has a few months to turn that around.  But that is a steep hill to climb.  In the days ahead, Republicans will have to ask themselves whether that hill is worth the ascent.

Triumph of Style

Ross Douthat wonders where he can find the ideas in an "idea-oriented" campaign:

I have, for my sins, watched Gingrich make his pitch across what feels like seventeen thousand Republican primary debates, and I am at a loss to identify the “big ideas” and “big solutions” that he is supposedly campaigning on. Yes, he has an implausible supply-side tax plan, but you never hear him talk about it. He has technically signed on to some form of entitlement reform, but you never hear him talk about that, either. Instead, so far as I can tell, his “idea-oriented” campaign consists almost entirely of promising to hold Lincoln-Douglas-style debates with President Obama, grandstanding about media bias and moderator stupidity, defending his history of ideological flexibility much more smoothly than Mitt Romney, and then occasionally throwing out a wonky-sounding notion (like, say, outsourcing E-Verify to American Express) that’s more glib than genuinely significant. His last-minute momentum in South Carolina, which last night’s debate did nothing to derail, has been generated almost exclusively by the politics of ressentiment: If he wins the Palmetto State primary, it will be because conservative voters don’t much like the mainstream press, and Gingrich has mastered the art of taking tough questions and turning them into dudgeon-rich denunciations of the liberal media and all its works.

Meanwhile, the Politico explores the reasons for Gingrich's rise in South Carolina.  This report also comes down to questions of style.

Gingrich's campaign has always been a very style-driven one.  Even the flaws popularly imputed to Gingrich tend to focus more on questions of image than those of substance: he called Paul Ryan's budget "right-wing social engineering" or sat on the couch with Pelosi.  Those public relations specters have haunted his candidacy, in some respects far more than actual policy positions (such as his plan to give local boards the ability to legalize "undocumented" immigrants or his position that the president can ignore Supreme Court rulings at will or his---past---support for cap-and-trade).

Running on style has helped Gingrich in a variety of ways.  Filled with thirty-second soundbites, the debate structure of this cycle has encouraged this emphasis on style.  The limitations of these fora have empowered the one-liner (though some interesting substantive points have been brought up as well).  And Gingrich has mastered the ability to pour a distillation of disdain and wrath into a few sentences.  For many frustrated "conservatives," this concoction is the sweetest of candies.

Much of the grassroots right has expressed a great desire for a bare-knuckles fighter and a primordial cage match between progressivism and "true conservatism," and Gingrich has blithely volunteered to be the anointed gladiator.  Moreover, his aggression toward the media and the left has helped differentiate him from Romney.  Gingrich has had as many "flip-flops" as Romney (if not more), but his casting of himself as the antithesis of "the establishment" has given him a brand that can ignore those petty distinctions of policy.

Early on, style almost broke Gingrich's candidacy.  Then, late in 2011, style elevated him.  A sustained attention to Gingrich's record interrupted this rise, leading to the ascent of Santorum in Iowa.  In order to restore his position, Gingrich has embraced his role as the anti: anti-media, anti-Obama, anti-Romney, anti-establishment, anti-"vulture capitalism," anti-settling, and anti-ending the primary.  By casting himself as the great NOT, Gingrich can play into the frustrations of those looking for the "perfect" candidate.  This stylistic approach has given new life to his campaign.  We'll have to see how much it helps him in South Carolina tomorrow night.

Limits of Standardized Testing

My latest post at the Huffington Post explores a conservative critique of test-driven education "reform":

A persistent -- and, I think, powerful -- theme in conservatism is the emphasis upon limits and doubt about the wisdom of centralized actors.  One of the strongest pragmatic defenses of the free market is that centralized authority is not efficient enough and wise enough to direct the economic energies of the nation; hence, a diversity of economic actors should make their own, personal economic decisions.  Moreover, a mainstream of conservative philosophy from Burke onwards suggests that the richness of a given human society and culture goes beyond mere statistics -- something about the weave of human life resists quantification.

However, a great many "conservatives" ignore these teachings when the topic of education "reform" comes up.  Suddenly, a technocratic mania that seems far more a trait of bureaucratic "progressivism" rules. 

Read more at the Huffington Post.

Splitting the Vote

Much anti-Romney analysis claims that the multiple candidates running against Romney are splitting the Republican vote and allowing the "Massachusetts Moderate" (not sure if this phrase has been trademarked by Gingrich yet or not) to beat a divided field.  Polling before might have backed up this claim (when various not-Romneys beat Romney in a one-on-one polling match-up), but it now tells a different story.

For example, recent YouGov polling showed Romney beating Santorum 58%-42% and beating Gingrich 66%-34% nationally.  A CNN poll of Republicans nationwide released on Friday showed Romney beating Santorum 60%-37% and beating Gingrich 59%-37%.  This trend also carries over into many statewide races.  In South Carolina, a PPP poll shows Romney with a five-point lead against the whole field.  Match-ups where Romney is pitted against a single other Republican see his margin of victory grow considerably.  He leads Gingrich 48%-37%, Paul 63%-28%, Perry 56%-31%, and Santorum 48%-39%.

Many supporters of one not-Romney feel more comfortable with Romney rather than another not-Romney.  So, at this point, it seems as though a full field could be hurting Romney more than helping him. A multiplicity of opponents can attack Romney (sometimes in contradictory ways) and hope to pull his polling numbers down enough to allow one of the not-Romneys to win.  At this time, however, polling seems to suggest that Republicans would rally around Romney more than they would around any of his GOP rivals.

Huntsman and Audience

Now that Jon Huntsman has declared that he's withdrawing from the race to be the GOP presidential nominee (and has endorsed Mitt Romney), the postmortems have begun.  Many of them focus on Huntsman's seeming difficulty in finding an audience.

David Frum says that there was a disconnect between Huntsman's personality and his program:

Huntsman offered a critique of what has gone wrong in the modern Republican party: too anti-science, too socially conservative, too militarily interventionist, too hostile to expertise.

He did not however offer a unique selling proposition for his own candidacy. Even supposing a Republican primary voter agreed with every point in Huntsman's critique (and surprisingly many do agree)—what then? Huntsman's answer to the party's problems was himself: smart, sophisticated, worldly, pragmatic. But every one of those characteristics is shared with Romney. What Huntsman did not offer was a programmatic alternative. On the contrary, the Huntsman program doubled down on Norquistism: big tax cuts, Ryan plan, etc.

This program created a contrast with Romney, but in the wrong direction: the least ideological Republican candidate now offered the most ideological economic platform. 

Ace instead focuses on how Huntsman seemed to treat the base:

It's difficult to like someone who clearly doesn't like you. While in the past several weeks conservatives, seeking some alternative to Romney, have started to at least entertain the possibility of backing Huntsman, it was all but impossible given Huntsman's frequent obnoxious signaling that he just doesn't like us.

It's not just an emotional thing, either. If a candidate specifically lays down the marker that he doesn't think much of our opinion but cares a great deal about what the editors of Vogue might think, that's a pretty strong sign that he'd govern in such a way to pander to their opinions and against ours.

Federal Judge Denies Perry, Gingrich et al Request for Injunction in Virginia

Rick Perry, joined by Newt Gingrich, Jon Huntsman, and Rick Santorum, filed a lawsuit challenging the ballot requirements of the Republican Party of Virginia.  Currently, only Mitt Romney and Ron Paul have fulfilled Virginia's requirements and will be on the March 6 primary ballot.

U.S. District Judge John Gibney (an Obama appointee) has ruled against these campaigns.  The principal reason for Gibney's ruling seems to be the doctrine of laches (when a plaintiff takes an unreasonable amount of time to claim a legal defense of his or her rights).

Gibney seems to suggest that, in his opinion, Virginia's requirement that only those who are eligible to register to vote can circulate petitions for a candidate is an abridgement of the First Amendment.  However, requiring 10,000 signatures with at least 400 signatures from each Congressional district is not an unconstitutional burden.  If the campaigns had filed a lawsuit against this purported abridgement of First Amendment rights earlier (such as in August or September or October), Gibney probably would have ruled this requirement unconstitutional.

However, the candidates did not do that.  As Gibney writes:

They plaintiffs could have challenged the Virginia law at that time. Instead, they waited until after the time to gather petitions had ended and they had lost the political battle to be on the ballot; then, on the eve of the printing of absentee ballots, they decided to challenge Virginia's laws. In essence, they played the game, lost, and then complained that the rules were unfair.

Because they waited so long, Gibney has denied their request for an injunction.

Some other interesting details come out in this.  One is that the Virginia State Board of Elections does not seem to know the exact number of signatures that either Gingrich or Perry got.  However, Perry's camp only admits that it submitted more than 6,000 signatures, and the Board agrees that it was less than 10,000.  Gingrich's camp says it submitted 11,050 signatures, but the Board determined that fewer than 10,000 were valid.  These details seem to suggest no evidence for a RINO establishment conspiracy to keep Perry and Gingrich off the ballot.

Gibney's ruling also notes that Jerry Kilgore, a former Attorney General of Virginia and the Virginia campaign chair for Perry, got over 13,000 valid signatures on a "shoestring budget" in his race for AG in 1997.

We'll have to see whether/how these campaigns appeal this ruling.

Oh, the Irony

A list of the some of the ironies regarding the "King of Bain" dust-up:

• The old anti-Romney claim was that Romney was too sympathetic to the middle class (for example, in offering certain tax-cuts only for those who make less than 200K/year); now, he's become the embodiment of corporate, top-1% greed.
• Perry and Gingrich can make these attacks second-guessing Romney's experience in business in part because they have been career politicians.
• Gingrich served on the board of a company that pioneered the leveraged buyout mechanism about which he has criticized Bain.
• Perry collects plenty of donations from those who practice the very same "vulture capitalism" of which he accuses Romney.
• Conservatism is supposed to be about individual responsibility, but now Romney is being blamed for the actions of Bain years after he retired from the organization; many of the events talked about in the "King of Bain" "documentary" happened after 1999, when Romney left the organization.
• I thought a standard line for "True Conservative" purists was that too many regulations are strangling the national economy, but the purported excesses of Bain (from the perspective of the Gingrich and Perry camps, at least) occurred due to certain regulatory rules---which could be revised or added to.  So we've moved from regulatory abolition to the idea of regulatory reform or increase (and President Obama would no doubt be glad to talk about the latter).
• Many "True Conservative" purists were salivating at the prospect of Gingrich offering a full-throated defense of capitalistic profit in all its forms in the presidential debates against Barack Obama.  So much for that exchange.
• Some "libertarians" warned that Rick Santorum was some kind of anti-market technocrat (or something), but Santorum has actually defended the actions of private equity firms (and thereby Bain) as a worthwhile part of capitalism.
• At a time when they could be working to develop and defend market-oriented policies that support the economic middle, many conservatives have chosen instead to indulge in identity politics.

Architech of AZ Immigration Law Backs Romney

The Washington Times reports:

“Romney stands head and shoulders above the crowd,” Kris W. Kobach, Kansas’ secretary of state and the architect of the Arizona law, told The Washington Times, praising Mr. Romney for treading where other Republican candidates have refused to go. “Immigration is one of those issues that will appear to be a hot button — some elected officials who are afraid of offending anyone will avoid taking tough stands on immigration, and he took a tough stand.”

Other opponents of legalization for "undocumented" immigrants are also coming out for Romney.

Beating Expectations

If someone had predicted a little over a month ago that Romney would have won in both Iowa and New Hampshire, more than a few people would have dismissed that notion as a little delusional.  Yet here we are.  With nearly around 40% of the vote (and a 15+-point margin), Romney cruises to victory in New Hampshire, becoming the first non-incumbent Republican to win both the Iowa and the New Hampshire primaries.  I thought Romney would need at least a 10-point win to maintain his momentum, and it looks like he got it.

Exit poll data shows what a crushing victory this was for Romney.  Among registered Republican voters, he got 48% of the vote, outpacing by over thirty points his nearest rival (Ron Paul at 15%).  Romney's win did not come purely from a coalition of independents and moderate Republicans (though he did win registered independents as well, beating Paul 32-30).  Self-described conservative and very conservative voters overwhelmingly preferred him to other candidates.  Moreover, he won by eighteen points those New Hampshire voters who support the "Tea Party": Granite State "Tea Partiers" have claimed that Romney is their man.  Ironically, Gingrich and Perry's hectoring attacks upon Romney's record in the private sector may help unify conservative support behind Romney.

Ron Paul's second-place finish was fueled by young people, new voters, and independents.  Among registered Republicans, he didn't get above 15%, but independents and Democrats helped lift him to second place.

Jon Huntsman bet it all on New Hampshire and came in at around 17%---and could only get to 10% of registered Republican voters.  Huntsman has said he's staying in, but he's hovering around 2% or 3% in South Carolina, Florida, and nationally.    New Hampshire was the sort of territory most favorable to Huntsman, so those states will be a long march for him.  We'll have to see over the next few days whether his numbers increase or not---if there's a bump, perhaps we could be seeing the beginning of Huntsmentum.

No doubt Team Santorum finds tonight's results a little unpleasant.  But a near-tie with Gingrich for fourth place definitely keeps his campaign viable.  Unlike either Gingrich or Perry, Santorum has performed very strongly in one of the first two key primary battles and respectably in the other.  He goes into South Carolina with some vigor in his step.  Unlike New Hampshire, South Carolina will be a key testing ground for his candidacy.

What to Look For Tonight

Looking at some key numbers for tonight:

In the lead-up to the New Hampshire primary, here are a few key things to look for:
Romney's margin of victory: It's widely assumed that Romney is going to win New Hampshire tonight.  If Romney had come in a distant third in Iowa, he would probably need a New Hampshire win to stay viable as a candidate.  Right now, he only needs a New Hampshire win to maintain his momentum....

 Read more at the Huffington Post.

Clarifying the Curve

In a comment at FrumForum, Chris Conover at AEI replies to my analysis of the rate of growth of per capita health-care spending in Massachusetts.  Since Conover raises some worthwhile points and because FrumForum is (alas) about to go dark, it's worth quoting the comment in full:

As a practical matter, it is quite difficult to distinguish the effects of the recession from the effects of “Romneycare” in the 2007-2009 period. So in general, Fred Bauer gives more credit to Romneycare than I myself would.
That said, in assessing gubernatorial performance, it seems a little odd to ignore the fact that health spending was going up MUCH faster than the national average while Governor Romney was in office but then give him great credit for the purported slowdown in spending after he left office. If the argument is that governors really can’t do that much about health spending anyway, then it renders all these cross-state comparisons moot. One can’t (or shouldn’t) cherry-pick the data to highlight a comparison that looks favorable and ignore ones that are not.
The best analogy I can give is this. Imagine someone who is very obese getting a diet pill. Prior to taking the pill, this individual’s weight relative to the national average was rising 27% every 2 years. After the pill, their weight is still rising relative to the national average, but “only” 5% faster. The individual taking the diet pill is still gaining weight faster than those who don’t. Would you take that pill?
Until Mr. Bauer can explain what it is about Massachusetts health care that should lead us to “expect” 27% faster-than-average growth in its spending, pointing to only 5% faster-than-average growth seems problematic. Especially since the one thing we know for certain happened between 2004-2006 and 2007-2009: Governor Romney left office! If we give Governor Romney “credit” for the ballooning of MA health spending during his administration, then his apparent ability to lower this excess to “only” 5% seems far less impressive.

There's a lot here, so I'll address it in parts.

First of all, I should clarify that the aim of my last piece was not---FrumForum headline notwithstanding (and I was not responsible for writing the headline for the FF post)---that Romneycare alone bent the spending curve down forever.  I think more analysis and evidence would be needed to substantiate that argument.

Instead, my analysis grew out of a desire to test the now-standard claim that Romneycare exploded health-care spending in Massachusetts.  This federal data suggests that, at least until 2009, this claim might be more than a little problematic.  Now, more evidence might come out that supports the argument of exploding Massachusetts health-care spending due to Romneycare, but current federal data does not support this claim.

In his last few posts to the AEI blog, Chris Conover has been making a very different claim: that health-care spending grew rather quickly during Romney's term as governor.  The CMS data certainly seems to support that claim.  For example, in 2006, health-care spending grew 44% faster in Massachusetts than it did in the nation as a whole.  However, Romney is not exactly an anomaly here.  In 1998, during Paul Cellucci's term, health-care spending also grew 44% faster in Massachusetts than it did in the nation as a whole.  Since 1991, there have been only three years---1995, 1996, and 1999---where health-care spending in Massachusetts grew slower than it did in the nation as a whole. It's also worth noting that my piece was not particularly talking about Romney's overall record of health-care spending but about the effects of Romneycare (or at least what the effects of it aren't).  So I'm not sure how much I was "cherry-picking" data here as much as trying to compare the immediate period before Romneycare to the period after Romneycare.

Also, the extreme increase in spending during Romney's tenure arguably makes the case for Romneycare stronger, not weaker: an executive looking at exploding spending might feel the need for a game-changing reform.  Moreover, most anti-Romney "conservatives" are not claiming that health-care spending in Massachusetts during Romney's tenure was much of a problem; for them, Romneycare's meddling with the status quo was worse than leaving things as they were.

As I said in my earlier post, I think health-care spending is due to a variety of factors, some of which are out of the hands of governors and government more broadly.  So I think there are limits to how much any single political official can change the health-care curve, especially in the US health-care system, which relies on a combination of government and private spending.  I also think that cost controls are not the be-all and end-all of measuring the worth of a health-care system.

However, if I were to defend the claim that Romneycare reduced the rate of health-care spending growth, I might make the following points.  Mr. Conover is right to note that the recession does play a role in the reduction of the rate of health-care spending growth in the US and Massachusetts.  However, much more analysis would need to be done to explain why the recession caused the rate of growth in per capita health-care spending to decline in Massachusetts faster than it did in many other states, including ones with higher unemployment rates.

The recession might explain the absolute fall in the rate of per capita health-care spending growth in Massachusetts, but it does not entirely explain the relative fall as well.  In the recession during the early 2000s, Massachusetts was hit fairly hard (its unemployment rate more than doubled between late 2000 and the middle of 2003), but its health-care spending grew at a much more rapid rate than that of the nation as a whole: 14.7% faster in 2001, 20.5% faster in 2002, and 9.7% faster in 2003.  So, in the past, an economic slow-down did not lead to a radical narrowing of the gap between US and Massachusetts health-care spending growth rates.

And to return to Mr. Conover's analogy of the pill:

Prior to taking the pill, this individual’s weight relative to the national average was rising 27% every 2 years. After the pill, their weight is still rising relative to the national average, but “only” 5% faster. The individual taking the diet pill is still gaining weight faster than those who don’t. Would you take that pill?

 I think I, and most other people, would take that pill (with a couple caveats on the side).*  After all, that is still a big reduction in the rate of growth.  But I wouldn't stop looking for further treatment, either.  Refusing to take that pill (when that pill can be taken as part of a broader health-care regime) would be somewhat like letting the perfect be the enemy of the good.

And more data here will be crucial in adjudicating this point.  In 2007, per capita health-care spending in Massachusetts grew 46% faster than it did for the nation as a whole, but, in 2008 (once Romneycare went more fully into effect), it grew 6.7% faster; by 2009, it was only growing 3.8% faster.  That could either be a statistical blip or it could be the start of a downward trend in the growth of health-care spending in Massachusetts; there have been times when the rate of growth in Massachusetts spending has slowed compared to the nation as a whole only to explode a few years later, so a couple years is not enough time to demonstrate sufficiently the effects of a health-care policy on spending.

But I think there is a big difference (in terms of policy and in terms of politics) between debating how much Romneycare slowed spending up through 2009 versus debating how much it skyrocketed spending up through 2009.  Contemporary political discussion has focused on the latter; federal data suggests that this assumption might be a problematic one.

*Those caveats include a consideration of whether the pill would have other harmful side effects and whether it would work over the long term.  The jury is probably still out on Romneycare on both those points.  I do not think---and doubt even Romney himself believes---that Romneycare is the magic pill for curing all the nation's health-care concerns.

Minor Programming Update

On Friday, David Frum announced that FrumForum would be closing down.  As readers may know, I had been contributing to FF over the past few years.  I wish David Frum and Noah Kristula-Green all the best in their move to the Daily Beast/Newsweek.


In the wake of these changes, I'll still be posting here, but I will also be contributing to the Huffington Post.

The Long Fight

Moe Lane makes some fair points about the benefits of a longer primary race.  I've written before about the advantages of such a stretched out primary process.  Deliberation is a good thing, and Republicans have every right to engage in a months-long search for their nominee.

Bending the Curve?

Via an interesting post by Chris Conover, I came across this recently released National Health Expenditure report, which has data on health-care spending up through 2009.  This data includes a state-by-state breakdown of personal health-care spending (a number that includes direct expenditures on health-care but does not include administrative costs).

Digging into these numbers allows one to calculate (roughly) the growth of health-care spending in each state from 1991 to 2007.  This data set tells an interesting story for Massachusetts after the passage of health-care reform there: after the passage of Romney's reforms, the rate of per capita health-care spending growth slowed in Massachusetts both in absolute terms and relative to the national average.

Here's a chart I put together looking at the cumulative growth over two periods: from 2004 to 2006 (prior to Romneycare) and from 2007 to 2009 (after the measure was applied).  I've included the US national average as a whole as well as the New England average in order to situate Massachusetts in its local context.  New Hampshire offers the example of a New England state which did not engage in Romney-style reforms, and Ohio offers a counterexample of a Midwestern state with relatively slower-growing health-care costs.  Texas, often touted as an alternative model for the nation, also helpfully sets up a contrast with Massachusetts.  This chart looks at the cumulative percentage change in per capita personal health-care spending over the 2004-2006 and 2007-2009 periods.

	Spending Growth 2004-2006	Spending Growth 2007-2009
US National Avg	11.40%	7.86%
New England	9.23%	9.15%
MA	14.51%	8.28%
NH	16.69%	10.10%
NY	10.55%	8.02%
OH	9.56%	7.89%
TX	12.14%	9.05%

Perhaps in part due to the recession, the rate of growth for health-care spending dropped for the nation as a whole (though spending did still grow).  However, it's worth noting that, in the years after Romney's reforms went into effect, the rate of growth for health-care spending in Massachusetts dropped even faster than the national average did.  Between 2004 and 2006, health-care spending in Massachusetts grew almost 27% faster than it did for the nation as a whole; between 2007 and 2009, it grew only 5% faster.  After Romney's reforms, Massachusetts went from having a health-care spending growth rate well above the national average to one just a little bit above.  For example, between 2008 and 2009, personal health-care spending increased at a rate of 3.8% in the US, while Massachusetts saw its spending increase by 3.9%.  Compare that to the changes between 2005 and 2006: US spending grew at 5.3%, but Massachusetts spending grew at 7.6%.  Situating Massachusetts in the context of the rest of New England makes the change in spending rates even starker: prior to Romney's reforms, Massachusetts personal health-care spending grew faster than the New England average most years.  After his reforms, it grew slower than the New England average (often having one of the lowest rates of health-care spending growth in the region).  These numbers suggest that Texas is doing a worse job at taming the rate of health-care spending growth than Massachusetts (though, for the moment, per capita health-care spending in Texas is lower than that of Massachusetts).

Massachusetts seems to have especially slowed down the rate of growth in hospital spending.  Between 2004 and 2006, Massachusetts hospital spending jumped 16.5%; between 2007 and 2009, it only climbed 5.5% (a 67% reduction in the rate of growth).  US spending on hospital care grew 12.7% between 2004 and 2006; between 2007 and 2009, it grew 8.6% (a 33% reduction in the rate of growth).  Spending in Massachusetts hospitals rose much more slowly than the national average.  One of the key premises of Romneycare was that bringing all of the commonwealth into the health-care system would lower the need of hospital use (especially the use of emergency room care) and thereby lower spending at the hospital level.  These numbers seem to suggest that something like that may be happening.

In many areas of health-care spending, the rate of growth for spending in Massachusetts either fell more than it did for the nation as a whole or fell at roughly the same rate.  This data would seem to muddy the waters for the claim that Romney's reforms caused health-care spending in Massachusetts to skyrocket.  Since Romneycare, health-care spending in Massachusetts (at least until 2009) grew more slowly than it did in many other states and also grew much more slowly compared to the rate of spending growth in Massachusetts before Romneycare took effect.

Health-care spending depends upon a variety of factors (including population aging and economic growth), so this data set does not tell the whole story regarding the effect of the 2006 reforms on health-care spending.  It does, however, pose a challenge to the argument that Romney's reforms uniquely inflated health-care spending in Massachusetts.  In terms of raw health-care spending, Massachusetts seems to have bent slightly down the curve of growth---compared to many other states and, in many respects, the nation as a whole.

(Of course, the rate of growth in health-care spending is not the sole deciding issue for Romneycare: other questions about long-term sustainability, the role of government coercion and spending, and other topics are also very important.  Nor is there a direct correlation between health-care spending and private insurance premiums, which seem to have increased in recent years.  Moreover, data for years after 2009 might tell a more complicated story.)

(Crossposted at FrumForum)

UPDATE: See this post for more on health-care spending in Massachusetts.

All Tied Up

In the wake of the Iowa caucuses, what matters now is not the exact order of Romney, Santorum, and Paul; the numbers are very close. What does matter is the range between the candidates. Iowa gives us basically a tie between Romney and Santorum, with both at around 25%. Ron Paul comes out a strong third at around 21%. Gingrich, Perry, Bachmann, and Huntsman, who did not even campaign in Iowa, fall far behind.

Romney did not sew up the nomination tonight, but he took a significant step down the road to the nomination. A few months ago, Romney was polling in the high teens and low twenties in Iowa. Since July, he has had relatively few days where he was in the lead. So a tie today is a not-insignificant accomplishment. It is, however, a limited one: he still remains under 26%. A big win in New Hampshire would be helpful for Romney in breaking the Romney-ceiling narrative. And Romney's people shouldn't be too depressed about the fact that Romney performed at about the same level in 2008 in Iowa: Reagan lost the Iowa caucuses to Ford in 1976 and lost them again to George HW Bush in 1980---he couldn't get above 30% in 1980. Somehow, Reagan still won the nomination, and the presidency, in 1980.

This is a hard night for Rick Perry. He spent more than any other candidate in Iowa and is stuck in fifth place. With Perry's declaration that he is going back to Texas to re-access his path to the nomination, his campaign is in critical condition. Newt Gingrich can't be too happy, either. A few weeks after boasting that he would be the nominee, he is stuck with a disappointing fourth-place showing. Moreover, the path to the nomination for Michele Bachmann now seems almost totally closed down.

Independents were responsible for Ron Paul's performance tonight. Among Republicans, the entrance poll reports the following: 28% Santorum, 27% Romney, and 14% Paul. Among independents, however, the numbers were 44% Paul, 18% Romney, and 13% Santorum. The "independent" number shows a big increase from the 2008 Republican caucuses; with the Democratic caucuses uncontested this year, many Democratic-leaners may have come out for Paul. Due to a number of reasons, it seems quite clear that many Democrats would love to run against Paul.

And, of course, this was a very good night for Rick Santorum. The outstanding question is whether Iowa is a one-off or a route to the nomination. For George W. Bush, it was the latter. For Mike Huckabee, it was the former. Look to see whether Rick Santorum's numbers rise in national polling over the next few days. If they do, those looking for a not-Romney might rally around him.

Santorum has wisely decided to contest the New Hampshire primary. Expanding his brand there will be crucial for maintaining his momentum. There's a reason why many Perry supporters and Gingrich supporters are deriding Santorum's chances of getting the nomination: he's a serious threat to them. If momentum starts to accrue to Santorum, we might see Gingrich and, possibly, Perry focus their fire on him rather than on Romney. We might also see Gingrich choose instead to focus on tearing down Romney in order to keep him from getting the nomination---whether that leads to a Gingrich victory or not. Santorum's victory speech tonight presents a less angry Santorum, one focusing on economic growth and social optimism. Like Romney, he has won in Democratic-leaning areas before.

A few points about the future:

The January 10 New Hampshire Primary: Look at Santorum's and Huntsman's performances. A decent showing in New Hampshire can keep Santorum nationally viable. Huntsman needs a strong showing to keep his campaign vital.

The January 21 South Carolina Primary: This could be a bloody, bloody battlefield. It's hard to see how both Gingrich and Perry make it out of this primary, if they both make it to that point. Perry is especially vulnerable here; Gingrich could have strong, though not winning, numbers and still limp on to Florida. A Romney win here would almost guarantee him the nomination, though he in no way needs to win in order to maintain his leading status. Santorum's numbers will also bear watching.

Premises, Premises

I think this Daily Caller headline ("Romney Supports, Opposes Free Trade with China") and story assume a bit much:

One day before the all-important Iowa caucuses, former Massachusetts Gov. Mitt Romney continues refusing to clarify his position on free trade with China.

In his 2010 book “No Apology: The case for American Greatness,” Romney argued against protectionism, an ideology that favors tariffs, quotas and other restrictions placed on international trade.

“Personally, I don’t like to see America lose any good jobs,” Romney wrote. “But when I see an American company challenged by a foreign competitor, I don’t look for protectionist policies as an answer to the company’s problems. Instead, I look to see how that company can become competitive once more, drive off its foreign foe, and propel its own products into foreign markets.”

But during the 2012 presidential campaign, Romney has taken the opposite position.

During an Oct. 24 radio interview with the Fox News Channel’s Sean Hannity, for instance, Romney promised that on “day one” of his presidency he would impose new tariffs on trade with China, and classify the nation as a “currency manipulator.”

“At some point, you’ve got to stand up for your rights and say ‘these people are cheating,” Romney told Hannity. “They’re killing certain industries. This just can’t go on forever. It’s simply unacceptable.”

There's only a contradiction here if you believe that the current trade relationship with the People's Republic of China is one of market-based free trade---a contested assumption to say the least. On a related note, David Frum suggests that there may be more depth than mere pandering to Romney's position on the People's Republic of China.