How Mitt Romney Is Taking Advantage of the Mosque Controversy

The latest front in America's culture wars: a planned Islamic culture center and mosque in lower Manhattan, a couple of blocks from the site of the World Trade Center. Click to view photos. Timothy A. Clary / AFP-Getty Images

Whither Mitt Romney?

As his fellow 2012 Republican presidential hopefuls equate Muslims with Nazis (Newt Gingrich) and call on New Yorkers to "refudiate" the so-called Ground Zero mosque (Sarah Palin), the former Massachusetts governor has kept his mouth conspicuously shut.

What gives? Back in 2008, Mitt would've been first to fan the flames. At the time, he was scrambling to escape his moderate Massachusetts past by loudly proclaiming himself a "true conservative" on every issue of importance to the GOP base: immigration, abortion, gay marriage, etc. He even suggested that mosques should be wiretapped.

But now, while Palin and Co. are using the Ground Zero mosque controversy to burnish their far-right bona fides, Romney is seizing on the kerfuffle as an opportunity to do something else entirely: prove that he's the only potential Republican nominee with the fortitude to ignore the 24/7 news cycle's endless array of bright, shiny objects and focus instead on improving what he calls "the foundations of our economic vitality."

Romney realizes that 2010 isn't 2008, and he's betting that 2012 won't be, either. With the U.S. economy in shambles—and the rest of the Republican pack either too unpolished (Palin), too damaged (Gingrich), or too obscure (Pawlenty) to unseat Obama—the once-and-future candidate sees an opening for himself as the only grown-up, business-savvy, economic-turnaround expert in the race. Back in April, Romney told me what he regretted most about his last presidential run. "I wish I had been more effective in being able to communicate the central rationale of my campaign, which is strengthening the economy, getting better jobs, raising incomes," he said. "Instead, as a candidate I spent a good deal of time answering questions about social issues." Note how Romney mixed the past and present tenses. The implication was that he wouldn't make the same mistake twice.

Hence the precisely timed op-ed in Wednesday's Boston Globe spelling out Romney's new plan for "grow[ing] jobs and shrink[ing] the government." In the piece, Romney slams Obama for "deepen[ing] and lengthen[ing] the downturn" with "anti-investment, anti-jobs, and anti-growth" policies that have left the "private sector ... paralyzed by the uncertainty, lack of predictability, and outright hostility he has engendered." Nothing new there. But Romney also has the cojones—unlike most of his colleagues in Congress, who are content simply to obstruct Obama's agenda—to explain what he would do differently. This includes matching U.S. corporate taxes with those of other developed economies; preserving the Bush tax cuts for everyone, "especially small business"; allowing businesses to write off capital investments made in 2010 and 2011 rather than over time; eliminating taxes on investment dividends; eliminating taxes on capital gains and interest for households earning less than $250,000 a year; and balancing the federal budget.

A list of tentative specifics is far preferable to what Republicans in Washington are offering—that is, a monolithic "no"—and Romney is already enjoying a modest political bump for his efforts. As The Washington Post's Ezra Klein—a liberal, and no fan of Mitt's—puts it, "Good for Romney ... Actually saying what you would like to do to help the American economy is, well, presidential." Going forward, however, analysts should focus less on the mere existence of a Romney plan and more on how well such a plan might work, were it ever enacted. It's unclear, for example, how cutting taxes on businesses and on people who invest in them—that is, allowing businesses to get more capital at less cost—will help create jobs in this particular recession. Our problem, as former Clinton labor secretary Robert Reich points out, isn't that business don't have enough capital; it's there's not enough consumer demand for their products or services. As Reich writes,

American corporations have an unprecedented $1.8 trillion of cash. The Fed, meanwhile, has slashed interest rates to essentially zero—a record low—and is still holding over $2 trillion in securities that it said last week it will keep from shrinking. And a Federal Reserve survey released earlier this week showed that banks have been making it easier for businesses of all sizes to get loans. Credit standards for small firms have been loosened for the first time since late 2006. In other words, businesses have all the capital they need. They're sitting on it or can borrow it more cheaply than ever. But they aren't using it to create jobs ... Meanwhile, retail sales continue to slide. Wal-Mart, Home Depot, and Target report disappointing sales for July. Same with popular back-to-school retailers like Aeropostale, American Eagle Outfitters, and TJX. Housing sales are down. Appliances are down.

Consumers—who are facing huge debt loads, shrinking nest eggs, and an anemic job market—are reluctant to buy, and it's not clear how Romney's plan to provide business with more capital would change that. As conservative economist and Bush White House veteran Bruce Bartlett recently told Slate, "My own view is that tax cuts are virtually useless under current economic conditions ... [They] would not increase spending or investment, but simply reduce tax payments with the money mostly being saved, not spent. In other words, they would have no more stimulative effect than the 2001 and 2008 rebates, which is to say none at all."

Also unclear, as Klein notes, is why Romney's massive, difficult-to-pass legislative proposals—trade agreements, entitlement reform, an energy bill—would alleviate the "uncertainty" that, in his view, is currently "paralyz[ing]" the "private sector." In fact, says Klein, they may be more likely to increase it:

A new energy bill? Uncertainty, both during the legislative process and the regulatory definitions process. New tax proposals? Uncertainty during the long legislative process; you don't want to make capital gains decisions if you [think] the capital gains tax rate might change pretty soon. Forcing deep budget reforms on the state level? Uncertainty, as businesses don't know what the cuts will mean for demand or infrastructure.

And so on. Other subjects for debate include whether Romney's jobs plan would have any short-term effect at all (only the accelerated capital-spending write-off would make an immediate impact); whether it's wise to raise the unemployment rate during a recession by laying off loads of government workers; and what to make of the fact that Romney's current positions on stimulus spending, the Bush tax cuts, cap-and-trade legislation, and capital-gains tax cuts seem to contradict positions he's held in the past.

Of course, most of the commentators and economists quoted above are not particularly sympathetic to Romney's cause. But that's precisely the point. I, for one, would rather listen to a debate over the merits of competing economic visions—including the views of Romney's conservative defenders, which are sure to emerge soon—than to self-interested bloviators talking past each other about whether or not a mosque should be as close to Ground Zero as a strip club. I think most voters agree. So kudos to Romney for taking the road less traveled by. In the end, it may make all the difference.