But his mixed messages on China and free trade are more troubling. Romney should be marshaling his troops — the party faithful, the conservatives of all stripes, the disenchanted Libertarians, and most of all, the participants of the Tea Party movement that proved so powerful in 2010.
Myths abound about the Tea Party — that it was secretly funded by billionaires, that people were paid to attend rallies, that its words were “code” for racism in America. Those myths have all been disproven, and one truth remains. These people know the issues, and they want sound, conservative solutions to the nation’s debt and deficits.
We’re using the plural there — deficits — because Romney is now hammering President Barack Obama on China policy and the trade deficit, and in doing so, he’s advocating protectionism.
“Seven times, Obama could have stopped China’s cheating. Seven times, he refused,” the narrator of a new ad says. Then Romney appears: “It’s time to stand up to the cheaters,” he tells factory workers, “and make sure we protect jobs for the American people.”
“Protectionism of the kind Mr. Romney is now selling often scores well in the polls, which we assume is one reason the Republican is now pitching it,” the Wall Street Journal notes. “Especially when times are tough, it’s easy to blame foreigners for American troubles. Yet a bona fide protectionist hasn’t won the White House since the 1920s. The reason is because voters instinctively want a President who knows how to make America more competitive, not one who campaigns as if other countries are more formidable.”
And it puts Romney in an awkward position.
“This China-bashing is especially odd for Mr. Romney, who professes elsewhere that he wants to expand trade because it will create jobs,” the Journal explains. “So trade is good for America except when it is conducted by ‘cheaters’ who happen to sell more of some goods and services to us than we sell to them. This is called mercantilism, not free trade.”
We all love the slogan “Buy American First.” While it’s a good slogan, it’s a terrible policy economically.
“Almost all economists say it’s nonsense,” says Hoover Institution economist David R. Henderson. “And the reason is: We should buy things where they’re cheapest. That frees up more of our resources to buy other things, and other Americans get jobs producing those things.”
Romney complains China manipulates its currency. That means China adjusts its money supply so that its products cost less than ours. But China is already responding to demands made by both the Bush and Obama administrations to adjust the yuan (that’s its currency) to more realistic levels.
The danger of protectionism is a trade war — when tariffs are imposed and prices skyrocket.
And no one wins one of those.