As others have noted, it's not hard to see the Keynesian case for Mitt Romney's presidency. Because of Republican opposition, there's little chance that President Obama could pass stimulus in his second term. Instead, it's more likely that we'll stay on the current path of deficit reduction and inaction with regards to the employment crisis.
By contrast, if elected president, Mitt Romney would enjoy a cooperative Republican majority that might be willing to pass stimulus if Romney proposed it. What's more, Romney has made a clear promise to begin his term with large tax cuts, and delay his spending cuts for subsequent years, which is just another way of promising Keynesian stimulus if he's elected. If you assume that most Republicans are insincere about their opposition to spending, then in the short-term, at least, a Romney presidency might actually be better for the economy.
This argument makes perfect sense, but it's bothered me for a while. In his take on the Keynesian case for Romney, The Washington Post's Ezra Klein hits on the "why" of that discomfort:
Compared to anything Obama is likely to get from a Republican House, that is, at least in the short term, a much more expansionary, Keynesian approach. But it's also an awful precedent. In a sense, Republicans are holding a gun to the economy's head and saying, "vote for us or the recovery gets it."
That might well prove an effective political strategy: The more they say that they're willing to let the debt ceiling expire and the economy run over the fiscal cliff, the more businesses will pull back and households will stop spending in order to make sure they have enough cash on hand to ride out another crisis. That will further depress the economy this year, making it more likely that Romney wins, and that Republicans embrace the smooth Keynesian glide path that they're denying Obama.
In other words, there's a good chance Republicans are playing a game of political and economic extortion. The GOP is willing to crash the economy if it doesn't win the White House in November, and in turn, it will use that economic calamity to argue for the ineffectiveness of President Obama and the Democratic Party. If Mitt Romney wins, by contrast, the Republican Party flip its position on austerity, and assist Mitt Romney in passing aid for the economy.
There's an argument, and I've made it before, that the Republican Party could be tempered by losing. The more it loses, the more likely it is that more constructive voices take command. But I'm not sure that's true. In the absence of norms governing behavior, the logic of our political system encourages this cycle of economic obstruction, where the opposition tries to sabotage the governing party, and capitalize on the discontent. Voters don't understand divided government, and-as we've seen over the last three-and-a-half years-will blame the incumbent for obstruction generated by the minority.
There are really only two solutions to this; the first is to revamp the institutions themselves. Congress doesn't need to be completely majoritarian, but there should be fewer veto points in the system. Something as straightforward as eliminating the filibuster could go a long ways toward changing the political incentives for lawmakers.
The other solution is simply to keep the other side from winning elections. Already, in the states, you seeing the beginnings of this, with efforts to disenfranchise voters, cripple unions, and hobble Democratic campaigns. You could easily imagine a similar campaign on the federal level, with a national right-to-work law, and laws that made voter registration more difficult for millions of Americans. Of course, this is a dangerous path. As our Founding Fathers understood, democracy can't work when any given loss threatens to be permanent.
