I presume that many RMGers watched the October 11 debate from New Hampshire. The most interesting part of the debate for me was when Mitt Romney very carefully chose his words in response to a particular question as to whether or not he’d support another bailout or TARP if the American economy was on the precipice of financial disaster. He performed quite the rhetorical dance to avoid saying “No bailouts ever again.” From the transcript:
On the first pass, Romney tries to duck the question altogether, claiming it’s an unimaginable hypotherical:
GOLDMAN: Thank you.
Governor Romney, it’s 2013, and the European debt crisis has worsened. Countries are defaulting. Europe’s largest banks are on the verge of bankruptcy. Contagion has spread to the U.S. And the global financial system is on the brink.
What would you do differently than what President Bush, Henry Paulson, and Ben Bernanke did in 2008?
ROMNEY: Well, you’re talking about a scenario that’s obviously very difficult to imagine. And –
GOLDMAN: But it’s not a hypothetical, because more than half –
ROMNEY: It is. I’m afraid it is a hypothetical.
GOLDMAN: Governor, it’s not –
ROMNEY: Do you want to explain why it’s not a hypothetical?
Then, on the second pass, he tries a hodge-podge of “It’s still hypothetical” but “I promise I can make tough decisions” and then he dances around saying “No bailouts” without actually committing to anything:
GOLDMAN: Because more than half the country believes that a financial meltdown is likely in the next several years, and the U.S. banks have at least $700 billion in exposure to Europe. So it’s a very real threat, and voters want to know what you would do differently.
ROMNEY: It’s still a hypothetical as to what’s going to precisely happen in the future. I’m not very good at being omniscient, but I can tell you this, that I am not going to have to call up Timothy Geithner and say, how does the economy work? Because I spent my life in the economy.
I spent my entire career working in the private sector, starting businesses, helping turn around businesses, sometimes successfully and sometimes not. And I know how to make tough decisions and to gather the input from around the country to help make the important decisions that have to be made.
Clearly, if you think the entire financial system is going to collapse, you take action to keep that from happening. In the case of Europe right now, they are looking at what’s happening with Greece. Are they going to default on their debt, are they not? That’s a decision which I would I would like to have input on if I were president of the United States and try and prevent the kind of contagion that would affect the U.S. banking system and put as at risk.
But I can tell you this – I’m not interested in bailing out individual institutions that have wealthy people that want to make sure that their shares are worth something. I am interested in making sure that we preserve our financial system, our currency, the banks across the entire country. And I will always put the interest of the American people ahead of the interest of any institution.
Quite the dance, Mitt. He says we must take action. He then says he’s not “interested” in more bailouts – but he doesn’t flat-out oppose them. And then he does say he is interested in preserving our financial system. All of this, so far, makes clear that he’s open to keeping more bailouts on the table of options.
Then, the third pass is the most telling:
GOLDMAN: So would you or would you not be open to another Wall Street bailout?
ROMNEY: No one likes the idea of a Wall Street bailout. I certainly don’t.
GOLDMAN: But you said in 2008 that it prevented the collapse of the financial –
ROMNEY: There is no question but that the action of President Bush and that Secretary Paulson took was designed to keep not just a collapse of individual banking institutions, but to keep the entire currency of the country worth something and to keep all the banks from closing, and to make sure we didn’t all lose our jobs. My experience tells me that we were on the precipice, and we could have had a complete meltdown of our entire financial system, wiping out all the savings of the American people. So action had to be taken.
Romney says he doesn’t “like” the idea of another bailout – a far cry from categorically opposing any future bailouts – and then Romney admits that TARP/bailouts kept our financial system from going into full meltdown.
After some back and forth about the Fed, Romney closes this portion with a telling passage:
You do want to make sure that we don’t lose the country and we don’t lose our financial system and we don’t lose American jobs, and that all the banks don’t go under. So, you have to take action very carefully to make sure that you preserve our currency and preserve our financial system. But bailouts of individual institutions? No one has interest in that, I don’t think.
He again reiterates that he doesn’t want our financial system to fail (a reminder that he agreed that TARP/bailouts preserved the financial system) and then gives a very weak, tepid slap at the bailouts, that no one “has an interest in that,” whatever the heck that means. He goes out of his way to merely poke at TARP/bailouts so he can say he’s not a fan of them, while reiterating that they saved our financial system and that he wouldn’t flat-out oppose them in the future.
The bottom line is: Mitt Romney was given not one, not two, but several opportunities to say “No bailouts ever again. No TARP ever again.” and he whiffed. He repeatedly made it clear that he is very open to leaving future TARP/bailouts on the table of options if there are future financial crises.
Compared to the other Republican candidates for President at that debate, Mitt Romney appeared, by far, to be the most pro-TARP and the most pro-bailouts. I wonder how the GOP base feels about that.