Romney's Hyperbole Hurts the Economy

by John M. Curtis
(310) 204-8700

Copyright June 5, 2012
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            Jumping all over May’s jobs report showing that the nation added only 69,000 non-farm payroll jobs, GOP presidential candidate former Massachusetts Gov. Mitt Romney called President Barack Obama’s economic policies a failure. Most economists expected to add about 125,000 to 150,000 jobs, only to be disappointed by the Bureau of Labor Statistics’ harsh numbers. Calling the BLS report “devastating news,” Romney ripped Obama economic policies causing the latest up-tick in unemployment to 8.2%. “Today’s weak jobs report is devastating news for American workers and American families,” read a statement from the Romney campaign. Whether admitted to or not, adding 69,000 jobs is preferable to shedding jobs that began during the final years of the Bush administration, where the economy lost over 100,000 jobs a month for over two years.

              When the economy began adding jobs in February 2010, the nation had already lost over 8 million jobs since the recession began in Dec. 2007. Adding 4.27 million jobs since February 2010 doesn’t jibe with Romney’s hyperbole. If the economy, since Obama was sworn in Jan. 20, 2009, were really that bad the Dow Jones Industrial Average wouldn’t have risen from 8,000 to today’s close 12,118. It wasn’t that long ago when the Dow hit 13,000 Feb. 21, 2012, before Europe’s sovereign debt crisis spread the bad news. Wall Street hasn’t continued its meteoric rise with Greece, and other European countries, facing insolvency and deciding June 21 whether or not to stay in the Eurozone. Had May’s report shown the expected 125,00 to 150,000 jobs, Romney’s language would have been different. Romney knows that Obama isn’t in control of all moving parts in the global economy.

            Romney’s hyperbole hurts the economy by whipping the public into unnecessary panic, all to buy votes come November. Romney knows that the economy is very much connected to U.S. national security. Any type of real economic collapse would have “devastating” consequences on U.S. resources. Promoting unwanted panic is irresponsible at a time when cool heads must prevail. “It is now clear to everyone that President Obama’s policies have failed to achieve their goals and that the Obama economy is crushing America’s middle class. The president’s re-election slogan may be ‘forward,’ but it seems like we’re been moving backward,” said Romney. Mitt knows that “everyone” doesn’t share his views on Obama’s economy. May’s jobs numbers reflect seasonal fluctuations and also the backdrop of Europe’s economic meltdown now threatening world markets.

                 Political hyperbole when it comes to the economy must be tempered with a prudent approach that takes into consideration what management guru Peter F. Drucker called “rational expectations.” Using hyperbole to buy votes doesn’t take into account the damaging influence of words on the economy. Saying the Obama economy is heading for disaster causes more damage to the economy than any specific economic policy. Obama’s economic team includes bipartisan economists working with the Treasury Department, Council of Economic Advisors and the Federal Reserve Board. Romney’s sweeping indictment all because May’s jobs report was a pathetic 69,000 shows egregious partisan dishonesty. Is Obama really “crushing” the middle class by adding over 4 million jobs since February 2010 or, as the BLS stats show, adding nearly 70,000 more in May.

             One month ago, the BLS stats revised downward April’s 115,000 jobs number to 77,000. BLS revised upward March’s 120,000 jobs number to 154,000. BLS fluctuations are no reason to whip up panic in the public. Drucker’s model indicates its better for responsible leaders to talk up the economy rather than risk the damage from reckless political rhetoric. Historic employment slowdowns typically occur in the Spring and Summer months where Wall Street typically follows suit. Every time Wall Street decides to take profits, for whatever reason, should politicians whip the public into a panic? Romney’s hyperbole plays havoc with markets needing more stability, not more hysteria. It doesn’t take much on Wall Street to cause a bearish stampede for the exits, causing markets to nosedive. Only with steady long-term growth can Wall Street break new records and grow the economy.

            Romney paints a frightening picture of the economy to win votes, not giving a clear picture of reality. Overstating the negative goes a long way in shifting Drucker’s “rational expectations” in the negative direction. It’s no accident that fine-tuning May’s BLS report indicates a 13,000 net loss in public sector jobs. Romney’s economic plan centers on dramatically shrinking the size of the federal workforce, potentially tossing thousands of federal and state workers into unemployment. Would Mitt really complain if Uncle Sam added 50,000 new jobs, perhaps for national highway, rail or airport construction? Based on his stated views, he’d complain federal jobs add to national budget deficits. Romney’s against Obama’s Affordable Care Act even though the Congressional Budget Office estimated it reduces deficits by expanding the medical-pharmaceutical industry and creates jobs.

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