I'm among those who believe Obama did better in the debate than a lot of people say.
But ultimately I think he lost because he failed to identify and grapple with the core of Romney's argument.
Follow me over the fold for a response to that argument.
Romney's core argument was twofold.
First, Romney essentially conceded much of the debate between the campaigns that preceded the actual debate and by doing so moved himself and the debate onto new ground closer to the political center.
-- He conceded that government regulation is necessary and that deregulation caused the financial crisis, even agreeing that some things in Dodd-Fransk were good, but argued that overall Obama is regulating inefficiently and in ways that are counterproductive to job creation.
-- He conceded that this election is a choice election about the middle class, but said he would fight for the middle class.
-- He conceded that he can't cut taxes for the wealthy without increasing taxes on the middle class and therefore said he won't cut taxes for the wealthy if it hurts the middle class.
-- He conceded that there are good things in Obamacare but said he would keep them.
-- He conceded that Social Security and Medicare are good programs that need protected and then claimed to protect them.
-- He conceded that government programs like job training and education are important to economic growth and said he would do those things too.
The President tried to steer the debate back to the ground Romney had previously staked out, but this is hard to do. It inevitably gives the appearance of making a straw-man argument.
In fact, where Obama did the best was on arguments over Romney positions that hadn't change (although he could have done better there too)
At the beginning of the next debate, the President needs to explicity call out what Romney did here and admin he wasn't prepared for it. Something like this:
"I'd like to start this debate by talking a little about the last debate, which many people say was not my best performance and an extrordinary one by Mr. Romney. Congratulations to the governor, it was an extrordinary performance. After an entire campaign of saying that government regulation is bad, it was extrordinary to hear him concede that government regulation is important and necessary and even to concede that the Democrats' financial regulation law had some good aspects to it. After an entire campaign of saying that Obamacare is bad, it was extrordinary to hear him concede that there were good things in it that he wants to keep. After an entire campaign of saying he was going to reduce marginal tax rates -- the rates paid by the wealthies americans -- by 20 percent, it was extrordinary to hear him concede that he couldn't do that without raising taxes on the middle class and therefore will not lower taxes on wealthy Americans. After a campaign that constantly talked about the evils of government dependency, it was extrordinary to hear him concede that the two government programs that people depend on the most, Social Security and Medicare, are good programs that he wants to protect.
I admit, I was not prepared for such startling changes in position this close to election day. I would warn you governor, that I am more prepared today, ... assuming you don't plan on changing you mind again."
(This is a phrase the President should keep on the tip of his tongue in case Romney flips again -- as in, "Well, it looks like the governor has changed him mind again."
The second part of the core of Romney's argument was that he would grow the economy so much that he would be able to afford tax cuts, increased defense spending and investment in education while only having to cut a few things like PBS and support for alternative energies. In fact, his plan assumes a growth of 12 million jobs at a growth rate that is at least 1 percent higher, which the Tax Policy Center called "implausibly large".
http://www.factcheck.org/...
Even if the growth occurs, it's not going to occur immediately, which means an immediate signficant increase in the deficit. And since there would be no clear plan other than the hope of growth for tackling the deficit, the result would be a downgrading of the government's debt and possibly a bond crisis of the kind that has occurred in Europe.
Still, we need to deal with Romney's plan for growth. Democrats seem to dismiss his growht plan out of hand, but we need to make the argument against it because a lot of people might actually be convinced by it.
As far as I can tell, Mr. Romney's growth plan involves -- to be generous -- five things: unspecified tax cuts, unspecified investments in education and perhaps infrastructure, expansion of the oil and gas industry through deregulation, expansion in general through more efficient, less costly regulation (how is not specified), and increases in defence spending to 4% of GDP.
As Obama did point out, tax cuts during the Bush administration failed to grow the economy very quickly and a recent study by the congressional research service says that there's no correlation between tax rates and economic growth. So no evidence exists that this will work.
As for the expansion of the oil and gas industry, the natural gas industry was expanding so fast this summer that gas prices reached such low levels that it was making it impossible for the industry to make any money and therefore caused a reduction in expansion of the industry this summer. From Seeking Alpha:
http://seekingalpha.com/...
"Natural gas inventories are building at a much slower rate this season. The glut that was built caused natural gas prices to plummet from $14 to a low of $1.92 reached this April 19. The reduction in prices was so steep that it has brought gas to a level that is below most fields all-in cost of production. When the economics are such that you are forced to sell below cost, production naturally curtails. The natural gas rig count has fallen dramatically from a peak of over 1,600 to 522 as at July 13, as drilling new wells ceased to be profitable."
In other words, the industry COULDN'T expand faster than it already had.
The expansion of an industry requires an increase in demand and that demand for natural gas has largely been driven by electric companies switching from coal to gas, which they've done in part because of environmental rules or anticipation of such rules.
http://online.wsj.com/...
But if Romney nixes those environmental rules and deregulates the coal industry so that they can expand without worrying about the environment, coal might become a cheaper alternative because its environmental costs will be shifted onto taxpayers, health insurance companies and health care consumers. So the expansion of coal will actually just result in a reduction in the growth of the natural gas industry because both are competing for electric customers and producing electricity is not where our primary energy problem resides.
Our problem is with energy for transportation and the dependence on gasoline.
Romney says he's going to tackle this problem and create jobs by expanding the oil production industry but how is he going to expand it any faster than it already has been expanding, which has been the fastest in years. And will that expansion make up for the jobs that will be lost when he cuts funding for alternative energies.
The natural gas industry and even the coal industry could help with the transportation energy problem if electric cars become more prevalent on our roads. That would greatly increase demand for electricity, driving growth in the electric production industry, which would greatly benefit natural gas (Ohio and Pennsylvania). Mr. Obama has championed electric vehicles. His department of energy has helped create a car battery industry in America virtually from scratch, including helping Envia systems, which is close to having a battery in production that could be a game changer.
The only way that Romney could really expand our energy industry without government assistance is by axing all the programs that have been put in place to reduce energy usage and thereby increase overall energy demand. That's one reason I suspect he wants to cut funds for clean industries because the largest reason that we've become less dependent on foreign oil has been a reduction in demand for energy in part due to initiatives to make energy use more efficient. The problem with this plan, from an economic perspective, is that you're now arguing for a less efficient economy that wastes energy unnecessarily. It's the broken window fallacy. Yes, people would have to spend more on energy thereby helping with energy demand, but they would have less money to spend on consumer goods and services, which in turn are created by using energy and so reducing their production because of decreasing purchasing power means less energy being used for their production.
Of course, Romney says he would also create jobs through investments in education and possibly infrastructure but doesn't say exactly what he would do there and even seems to suggest that he thinks that mostly that should be done by the states. Trouble is, he's not running for governor of any of those states. So the real question is what would the federal government kick in.
The only part of Romney's plan that would definitely create growth and jobs is defence increases ( the regulation reform is too vague to evaluate). There is no question that this will employ people but it won't lay any kind of foundation for future growth as defence goods don't form an infrastructure that can be reused much by private industry, although defense research certainly does. Putting the same dollars into domestic infrastructure and research would have more effect. And even if it creates defense industry jobs will that be enough to offset cuts in jobs in other parts of the government. Since Romney hasn't said what he would cut, we don't know. We only know that he says he plans to decrease the size of government to 20 percent of GDP, which implies significant cuts in the number of federal workers. Laying people off is not a recipe for creating jobs.
The bottom line is that there's no evidence his plan would create the 1-2 percent bump in GDP he claims and if it doesn't that means he's either making massive cuts to all the things Obama said he would cut or he's raising taxes on the middle class or we have a debt crisis like the ones in Europe. There's no getting out of this.
No doubt Romney will try to. I can only hope that arguments like the above and those being offered by other Daily Kos members can help the president to figure out how to respond in the future. I would urge DailyKos to create a Steal This Argument chain of diaries to put all the responses of DailyKos members to Romney's arguments in one place where Obama's team can find them easily and please, Steal Them!!