Wonkbook: Romney campaign in disarray

September 17, 2012

Welcome to Wonkbook, Ezra Klein and Evan Soltas's morning policy news primer. To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.

Wonkbook dashboard

RCP Obama vs. Romney: Obama +3.1%; 7-day change: Obama +3.1%.

RCP Obama approval: 49.4%; 7-day change: +2.1%.

Intrade percent chance of Obama win: 65.9%; 7-day change: +6.2%.

Top story: Romney campaign in disarray

Mike Allen and Jim Vandehei reveal the disarray within the struggling Romney campaign: "Stuart Stevens, Mitt Romney’s top strategist, knew his candidate’s convention speech needed a memorable mix of loft and grace if he was going to bound out of Tampa with an authentic chance to win the presidency. So Stevens, bypassing the speechwriting staff at the campaign’s Boston headquarters, assigned the sensitive task of drafting it to Peter Wehner, a veteran of the last three Republican White Houses and one of the party’s smarter wordsmiths. Not a word Wehner wrote was ever spoken. Stevens junked the entire thing, setting off a chaotic, eight-day scramble that would produce an hour of prime-time problems for Romney."

@DouthatNYT: Most damning part of Politico piece: After 6 yrs running for WH, Romney didn't have anyone in-house he trusted w/biggest speech of his life.

@jimtankersley: This is what being thrown under the bus looks like

The bottom line of the Politico story:  "Romney associates are baffled that such a successful corporate leader has created a team with so few lines of authority or accountability." Romney's mishandling of the Middle East crisis was driven by desperation. "Suddenly, the president was facing just the kind of externality that his team had been bracing for: a full-blown ­foreign-policy crisis less than eight weeks out from Election Day. And a campaign marked by stasis and even torpor was jolted to life as if by a pair of defibrillator paddles applied squarely to its solar plexus. Moments like this are not uncommon in presidential elections, and when they come, they tend to matter. For unlike the posturing and platitudes that constitute the bulk of what occurs on the campaign trail, big external events provide voters with something authentic and valuable: a real-time test of the temperament, character, and instincts of the men who would be commander-in-chief. And when it comes to the past week, the divergence between the resulting report cards could hardly be more stark...Here was ­America under attack, with four dead on foreign soil. And here was Romney, defiantly refusing to adopt a tone of sobriety, solemnity, or seriousness, instead attempting to score cheap political points, doubling down on his criticism." John Heilemann in New York Magazine.

@pourmecoffee: If the Romney campaign were the Salt Lake Olympics, they'd be calling Romney in to run it about now.

Romney is losing ground on key issues.

On the deficit: "Romney has consistently enjoyed a wide advantage on only one issue: the nation’s gaping budget deficit. But now the Republican presidential nominee, who tried to bolster his deficit credentials by picking a budget hawk, Rep. Paul Ryan, as his running mate, is at a significant risk of losing the edge on the policy area that voters have trusted him most on...Two recent national polls show a narrow gap between Romney and Obama on the deficit...The cumulative effect seems to be taking a toll on Romney’s reputation as someone who will fix the nation’s debt burden." Zachary A. Goldfarb in The Washington Post.

On taxes: "Mitt Romney, who has proposed new cuts to individual and corporate taxes, has lost his recent lead over President Barack Obama on the question of which presidential candidate would best handle taxation, a reversal that turns up in several polls and presents a worrisome trend for the GOP nominee...At least four polls in recent weeks have found Mr. Obama holding an edge over Mr. Romney on who would best handle the issue of taxes. An ABC/Washington Post poll last week found Mr. Obama with a seven-point advantage on taxes among registered voters, after Mr. Romney had led in that survey in August. A Gallup poll in late August found Mr. Obama holding a nine-point lead on the issue of taxes, after Mr. Romney led in July." John D. McKinnon in The Wall Street Journal.

On health care: "Voters may not love 'ObamaCare,' but they still prefer President Obama to Mitt Romney on healthcare issues. Several recent polls show Obama with an advantage -- often a sizeable one -- when voters are asked which candidate would do a better job handling healthcare. Obama held that lead even before Romney selected Paul Ryan as his running mate, which elevated the debate over Ryan’s controversial Medicare plan...A CNN/ORC poll earlier this week gave Obama a nine-point lead on healthcare (up from just 1 point a month earlier)." Sam Baker in The Hill.

Congressional GOP to Romney: change course. "Republican lawmakers are grumbling about the direction of Mitt Romney’s campaign and say he needs to change course. The complaints come as polls show that Romney lost ground on President Obama following the party’s respective conventions in Tampa, Fla. and Charlotte, N.C...The GOP members say Romney must do a better job of communicating to voters what to expect of him, either by making a bold pledge akin to George H.W. Bush’s 1988 'no new taxes' promise or fleshing policy proposals with more details." Alexander Bolton in The Hill.

@sahilkapur: That said, once the "Romney in disarray" narrative gets stale, it'll probably shift to "Romney's comeback."

STRASSEL: Romney's campaign lacks policy definition. "Credit for this fog goes to that inner circle of Romney advisers who never liked the Ryan pick and have reasserted their will over a candidate who is naturally cautious. In the la-la land where adviser Stuart Stevens presides, Mr. Romney wins by never saying a single thing, ever, that might rock a single boat, ever. Just keep the focus on Mr. Obama. After all, no president has ever won with an economy like this. One problem: Mr. Obama is winning." Kimberly Strassel in The Wall Street Journal.

Romney plans to refocus on, well, plans: "Amid a clamor of calls from prominent Republicans for Mr. Romney to offer a major policy address to answer voters’ continued questions about his plans, his aides said he would present a series of speeches, television commercials and events promoting his five-point economic policy, even as he concentrates on his next big chance to change the race: the debates. In an interview, Ed Gillespie, a senior adviser, said that in the coming days the campaign would be 'very future oriented' about 'what a vote for Romney would result in.'" Jim Rutenberg and Jeff Zeleny in The New York Times.

Here's the new ad:


Election forecasting models show Obama with a slim-but-steady lead. "[P]olls are not predictive...A better way to forecast the election results -- potentially, at least -- is to uncover the underlying fundamentals that propel an electorate to vote the way it does, and to combine them in some rigorous, standard fashion based on America’s voting history. Quite a number of political scientists have done so, creating models that use statistical techniques such as regression analysis -- seeing how one variable, like the economy, affects another, like an election outcome -- to predict presidential elections...The chances of an Obama plurality range from a mere 10% to a definitive 88%. For whatever it is worth, the average of the models’ projected vote for President Obama...is 50.2% -- a tiny advantage for Obama, but hardly ironclad." Larry J. Sabato at the U.Va Center for Politics.

@DouthatNYT: The Romney death spiral continues: Obama's lead in Gallup rolling average down from 7 points to 3 over the last five days.

The data show Romney has a steep hill to climb. "[L]et’s look at what would have to happen for Romney to come back and win -- and conversely, the electoral limits of how high Obama can get...[E]ven if all of the 'persuadable decideds' went to Romney, Obama would still be ahead by 1%...Romney could get over the top by getting all the persuadable-decideds plus wooing 'undecideds' by a ratio of about 3:1. This is a very steep hill to climb. But it is Romney’s only chance." Sam Wang at the Princeton Election Consortium.

COOK: Romney has squandered his openings. "My view is that if Obama is reelected, it will be despite the economy and because of his campaign; if Mitt Romney wins, it will be because of the economy and despite his campaign. This economy is an enormous millstone around Obama’s neck, yet he and his campaign have managed to secure the upper hand—albeit with a very tenuous grip. At the same time, despite an enormous advantage that the sluggish economy and the sentiment for change affords him, Romney and his campaign, to an astonishing degree, seem to have squandered too many opportunities and undermined his chances of winning." Charlie Cook in National Journal.

KLEIN: Romney is running more or less where the economy predicts he'd be running. "[A] fair summation of the conventional wisdom on this election: The economy is bad enough that Obama should lose. If he doesn’t lose, then we need some way of explaining why he didn’t lose -- why this election didn’t turn out...as the political scientists expected. But this view is just wrong. Things are going exactly as the political scientists expected...[The] expectation that incumbents lose when the economy is weak was not backed up by the data, which suggest that incumbents win unless major economic indicators are headed in the wrong direction, as was true with unemployment in 1980 and 1992. This year, the major economic indicators are headed in the right direction, albeit slowly." Ezra Klein in The Washington Post.

@mattyglesias: The thing people have to understand about the Romney campaign is the incumbent usually wins. Nothing odd about him being slightly behind.

Top op-eds

COWEN: The problem of world hunger remains unsolved. "The drought-induced run-up in corn prices is a reminder that we’re nowhere near solving the problem of feeding the world...For all its importance to human well-being, agriculture seems to be one of the lagging economic sectors of the last two decades. That means the problem of hunger is flaring up again, as the World Bank and several United Nations agencies have recently warned...Such bottlenecks are a challenge for the future of the African economies...What to do? First, put food problems higher on the agenda...Second, the United States government should stop subsidizing its own corn-based biofuels, mainly ethanol." Tyler Cowen in The New York Times.

KRUGMAN: Bernanke vs. the Republicans. "Mr. Romney’s language echoed that of the 'liquidationists' of the 1930s, who argued against doing anything to mitigate the Great Depression. Until recently, the verdict on liquidationism seemed clear: it has been rejected and ridiculed not just by liberals and Keynesians but by conservatives too, including none other than Milton Friedman. 'Aggressive monetary policy can reduce the depth of a recession,' declared the George W. Bush administration in its 2004 Economic Report of the President. And the author of that report, Harvard’s N. Gregory Mankiw, has actually advocated a much more aggressive Fed policy than the one announced last week. Now Mr. Mankiw is allegedly a Romney adviser — but the candidate’s position on economic policy is evidently being dictated by extremists who warn that any effort to fight this slump will turn us into Zimbabwe, Zimbabwe I tell you." Paul Krugman in The New York Times.

SHULTZ, BOSKIN, COGAN, MELTZER, AND TAYLOR: The next Treasury secretary has his work cut out for him. "Suppose you were offered the job of Treasury secretary a few months from now. Would you accept? You would confront problems that are so daunting even Alexander Hamilton would have trouble preserving the full faith and credit of the United States. Our first Treasury secretary famously argued that one of a nation's greatest assets is its ability to issue debt, especially in a crisis...History has reconfirmed Hamilton's wisdom...[O]ur nation's ability to issue debt helped preserve the Union in the 1860s and defeat totalitarian governments in the 1940s. Today, government officials are issuing debt to finance pet projects and payoffs to interest groups, not some vital, let alone existential, national purpose. The problems are close to being unmanageable now. If we stay on the current path, they will wind up being completely unmanageable, culminating in an unwelcome explosion and crisis." George P. Shultz, Michael J. Boskin, John F. Cogan, Allan H. Meltzer and John B. Taylor in The Wall Street Journal.

KLEIN: School reform is no longer a partisan issue. "The Democrats-teachers union alliance has been quietly changing over the past few years, but not without resistance and obfuscation. For a long time, unions and their allies have tried to portray reformers who supported greater accountability for teachers and more choices for families as part of a right-wing fringe out to 'privatize' public schools, or privateers out to make money off children...Most Americans don't follow the inside game of school reform and don't know that it wasn't just Republican governors who were fighting the unions. So was a group long considered to be hard-core union allies: Democratic mayors...School reform is increasingly and unashamedly becoming less of a partisan issue." Joel Klein in The Wall Street Journal.

@noahpinion: I hope the teachers' union loses, but only because I dislike teachers. I don't think unions are holding back the quality of U.S. education.

POLLOCK: The Fed is making a mockery of thrift. "Albert Einstein reportedly called compound interest 'the most powerful force in the universe.' He didn't live long enough to experience Ben Bernanke...For those of us who are slightly older, it seems as if Mr. Bernanke is on a mission to convince us that everything our grandparents told us about household economics was wrong...Call it the honest-saver's dilemma. It's one that unelected central bankers don't have the right to force on us, no matter how much their models may tell them low rates will goose the market or ease the deflation of the housing bubble. That latter rationale is an admission of what serious economists have always known easy money to be: a redistribution of wealth to debtors from savers. Or, as a general rule, from the more virtuous to the less virtuous." Robert L. Pollock in The Wall Street Journal.

PEARLSTEIN: A tech industry in flux. "What is common to all three of these stories is the degree to which these companies came to dominate their markets and the speed and unpredictability of their falls. This dynamic is something relatively new in business and one that we are only just beginning to understand...One lesson to be drawn from all three stories is the danger faced by dominant firms that refuse to cannibalize themselves -- to give up existing sales in order to get the jump on next-generation products and services...Rapid change in technology is obviously a common thread running through all of these stories. While it’s difficult to figure out how new technology will develop, it’s impossible to say how it will be adapted...The key to success in such a fast-changing environment isn’t developing clairvoyance. It’s keeping a mind open to numerous possibilities, having the discipline to experiment with several conflicting strategies and moving quickly to embrace one of them when the direction of the market becomes clear." Steven Pearlstein in The Washington Post.

Top long reads

Charles P. Pierce documents life in Massachusetts under Romneycare: "They called it Romneycare. It was his signature achievement as governor of the commonwealth — a market- based solution to the problem of access to quality health insurance that included an individual mandate requiring that people be insured. If it was determined that you could afford health insurance and you didn't buy it, you were assessed a penalty on your income taxes. The law has succeeded so well that six years into its implementation, 97 percent of the working-age adults in Massachusetts are covered by one form of health insurance or another, as are 99.8 percent of the children in the state. Before the law was passed, 67 percent of the businesses in the state offered health insurance to their employees. That number is up to 77 percent now. The program consistently polls at about 63 percent in its public approval. It has made thousands of lives easier, including my own...A popular bipartisan solution was devised to a vexing social problem, and Romney would be justified fully in basing his campaign purely on the fact that, in an era of gridlock and paralysis, he could get something like health-care reform done. Instead, he has run away from it headlong. He has looked ridiculous in doing so, especially to many of the people in Massachusetts with whom he worked to get it passed."

Good music interlude: Peter Gabriel, "Solsbury Hill".

Got tips, additions, or comments? E-mail me.

Still to come: corporate profits are shrinking; major problems emerging in Medicare billing; cybersecurity debate broils; a rising quota for biofuels; and a real answer to 'How much wood would a woodchuck chuck if a woodchuck could chuck wood?'.

Economy

Economic reports coming this week. "Data to be released include the current account deficit for the second quarter (Tuesday); housing starts for August and existing home sales for August (Wednesday); and weekly jobless claims, the Philadelphia Fed index for September and leading economic indicators for August (Thursday)." The New York Times.

The party in corporate profits looks like it's over. "The boom in American corporate profits, which has far outpaced the gains in the broader economy since the end of the last recession, is faltering...In all, Wall Street expects quarterly profits at the typical large American company to decline for the first time since 2009. The causes of the expected decline are many. In addition to the anemic economy in the United States, much of Europe has fallen into recession while growth in China, once white-hot, has slowed...After reducing spending and eliminating jobs during the recession, American companies reaped huge gains by keeping expenses down and putting off aggressively hiring new workers as growth slowly returned...[but now] the cycle of steady earnings increases appears to have run its course." Nelson D. Schwartz in The New York Times.

Financial crises: even more expensive than you thought. "Is it even possible to tally up the total impact of the financial crisis? Better Markets tried to give it a shot and puts the price tag at 'no less than $12.8 trillion.'...$7.6 trillion is the estimated actual GDP lost between 2008 and 2018—what the country’s output would have been had the financial meltdown not occurred, according to data from the Federal Reserve Bank in St. Louis and forecasts from the Congressional Budget Office. The remaining $5.2 trillion is GDP loss that was avoided, but only because it was prevented by the 'extraordinarily fiscal and monetary policy actions' by the government during the crisis." Suzy Khimm in The Washington Post.

What is 'middle class,' anyway? "What makes someone middle class? According to Mitt Romney, it’s as simple as making less than $200,000 or $250,000 a year. But as Derek Thompson notes, that implies that 96 percent of Americans are middle-class...But what does a more reasonable definition of 'middle class' include, and what does that class look like? One plausible definition of “middle-class” is those households in the middle quintile of the income distribution, or between the 40th and 60th percentiles. Under this view, 0-20th percentile is lower class, 20th-40th is lower-middle class, 40th-60th is middle class, 60th-80th is upper middle class, and 80th to 99th is upper class. The lower classes make under $20,262, in this view, and the upper classes above $101,582, according to the latest Census data." Dylan Matthews in The Washington Post.

@jbarro: Absurdly expansive "middle class" definition adopted not just by Romney/Obama, but by Occupy Wall Street with choice of "99%" rhetoric.

U.S. to file WTO case against China. "The Obama administration plans to file a broad trade case at the World Trade Organization in Geneva on Monday accusing China of unfairly subsidizing its exports of autos and auto parts, a senior administration official said late Sunday, in a move with clear political implications for the presidential elections less than two months away." Keith Bradsher in The New York Times.

Mortgage processing is delaying QE3's impact. "The Federal Reserve’s attempt to push aid into the heart of the US economy is being blunted by banks struggling to process mortgage applications fast enough, keeping rates on home loans elevated, according to the largest lenders...This was partly designed to ease further the cost of mortgages, but bankers say the impact will be limited by a dearth of loan officers with banks reluctant to cut mortgage rates without the staff to process any increase in business." Tom Braithwaite, Tracy Alloway, and Robin Harding in The Financial Times.

Tongue twisters interlude: Wolfram Alpha's response to: How much wood would a woodchuck chuck if a woodchuck could chuck wood?.

Health Care

High Medicare billing rates set off abuse alarm bells. "Thousands of doctors and other medical professionals have billed Medicare for increasingly complicated and costly treatments over the past decade, adding $11 billion or more to their fees -- and signaling a possible rise in medical billing abuse, according to an investigation by the Center for Public Integrity...Between 2001 and 2010, doctors increasingly moved to higher-paying codes for billing Medicare for office visits while cutting back on lower-paying ones, according to a year-long examination of about 362 million claims. In 2001, the two highest codes were listed on about 25 percent of the doctor-visit claims; in 2010, they were on 40 percent." Fred Schulte, Joe Eaton and David Donald in The Washington Post.

How Romney's health care plans would affect seniors. "It has been a central campaign promise from Mitt Romney: His Medicare overhaul plan would not touch benefits for anyone older than 55. That may not, however, be the case with the Republican presidential nominee’s other health-care proposals. A growing body of research suggests that his plans to repeal the Affordable Care Act and cut Medicaid funding would have a direct impact on the health care that seniors receive. Repealing the health law would mean higher Medicare premiums, the Kaiser Family Foundation found in a recent analysis. Wellness visits and prescription drugs also would cost more. Although under the current law, reductions in doctor payments could create an access issue. The impact could be greatest for the lowest-income seniors, who qualify for both the Medicare and Medicaid programs, and there could be a significant slowdown in federal funds available for their care." Sarah Kliff in The Washington Post.

Domestic Policy

Are we doing cybersecurity policy wrong? "The federal government has taken a “failed approach” to cybersecurity, with efforts that focus on reducing vulnerabilities rather than actively deterring attackers, according to one of the FBI’s top former cyber officials [,] Steven Chabinsky, a 17-year bureau veteran who stepped down this month as the FBI’s top cyber lawyer...More important is to enable companies whose computer networks are targeted by criminals and foreign intelligence services to detect who’s penetrating their systems and to take more aggressive action to defend themselves, Chabinsky said in his first interview since leaving office." Ellen Nakashima in The Washington Post.

Flying interlude: What the Burning Man festival looks like from a plane.

Energy

EPA boosts biofuels target amid food-price increases. "The Environmental Protection Agency (EPA) on Friday raised biofuels targets for 2013 despite an ongoing legal battle with the oil-and-gas industry on the issue. Refiners will be required to blend 1.28 billion gallons of biodiesel -- which EPA includes in its definition of 'advanced' biofuels -- into traditional transportation fuel in 2013, up from 1 billion gallons this year."Zack Colman in The Hill.

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Suzy Khimm · September 16, 2012