Mitt Romney continues to waver in economic posture. Like any capitalist, he expresses frustration over tight federal regulations, annual trillion dollar deficits, the need for international commerce and how "crony capitalism" is ruining our nation. Romney specifically said, "If we want to get America going again, you got to stop the spread of crony capitalism," at the South Carolina Republican debate Jan. 19.
In spite of his said opposition, Romney flip-flops in his economic ideology. Romney supported big banks and Wall Street government bailouts through advocating the TARP bill. This Romney-endorsed TARP bill gave rise to both the TEA party and Occupy Wall Street movements. TARP was pushed by former Treasury Secretary Henry Paulson in order to pump money into numerous big banks, from Goldman Sachs to JP Morgan. In all, $700 billion was pumped into nine different banks in one day under President Bush.
Knowing that easy money misaligns incentives, some of the banks didn't want the bailout. In short, easy-money doesn't consider what firms should get based on productiveness. Therefore, it doesn't matter whether banks do a good job; they will get paid. It is also important to note that banks get the inflation discount. Once this new money is spent, prices adjust and common Americans pay the inflation tax, or inflated prices, on top of the $700 billion.
When asked about TARP in a Nov. 21, 2011 interview with Sean Hannity Romney said, "I believe ... had president Bush and Secretary Paulson not stepped in in such an aggressive way that we would've had a complete collapse ... of all the money centered banks." Hannity reinforced Romney about TARP by stating, "Well, most people did support it." In the same interview Romney claimed to have never supported a single stimulus package.
However, on CNN's Late Edition with Wolf Blitzer, Jan. 4, 2009, Blitzer reported that President Obama was "talking about a $750 billion economic stimulus package. He wants it to be passed as soon as possible. It's unclear if whether it can be passed before he's inaugurated on Jan. 20. What do you think about this proposal?" Romney replied, "Well, I frankly wish that the last Congress (had) dealt with the stimulus issue and that the president could have signed that before leaving office. I think there is need for economic stimulus."
Obama's stimulus proved to be the same thing as the TARP bailouts all over again. At the tip of the iceberg, the stimulus printed money to "stimulate" the economy by giving low interest rate loans to companies.
Paying for Solyndra's loan cost the American taxpayers $535 million along with copious amounts of new currency pumped into new businesses and programs. This caused further erosion to the dollar via inflation and deepened the recession. Effectively, this stimulus took money from constituents and put in into the hands of lobbying businessmen, hence the term crony capitalism.
Romney is known for flip-flopping, but this is something far beyond a simple change of heart. It's not like he's anti-Ronald Reagan one year and then pro-Reagan the next. No, crony capitalism detrimentally affects the lives of each American and is not an issue one can capriciously change their mind on. Romney should know that government intervention in the economy is not capitalism. As MTV's John Papola said, "Capitalism is about profit and loss. If you bailout the losers, there's no end to the cost."
Essentially, inflation taxes the future. Please, take the proper time in picking your next candidate. Do some research and know that capitalism is a tool that rewards us for serving each other.
Eric Phillips
senior, psychology
coordinator, Auburn for Ron Paul
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