Mitt Romney Used To Be A Fan Of Fiscal And Monetary Stimulus

Rick Perry’s campaign took note of this December 2008 Mitt Romney article in National Review today:

So this is surely the time for economic stimulus. But — and this is the crucial point — the government can’t just make itself bigger and more oppressive in the guise of stimulating the economy. That would make matters worse. Nor should we forget that fiscal stimulus is but one part of the solution. As Christina Romer, Barack Obama’s designee as chairperson of the Council of Economic Advisors concluded from her study of the Great Depression, bad monetary policy was its greatest cause and good monetary policy was its most effective cure. The Fed should continue to expand the money supply. And, it should confirm that it will not tolerate deflation — the pain of inflation pales in comparison.

That being said, a stimulus plan is needed without further delay, and there are some things that Republicans should insist on.

It’s a very sensible piece. He argues that in addition to monetary stimulus, we need tax cuts, infrastructure spending, and money for energy R&D. My disagreement with him is that he disparages state/local fiscal aid, which he sees as passing up an opportunity to reduce the equilibrium size of state and local government. That’s where basic ideology — he’s a conservative, I’m not — will divide reasonable people. The Perry campaign presumably sees this as evidence that Romney isn’t a “real” conservative. I would say the state/local government bit disproves that, and what it shows is that as recently as December 2008, conservative movement figures like Romney and conservative movement organs like National Review were not in the grips of nutty ideas about macroeconomic stabilization. What started as opportunistic opposition to President Obama has, however, seemed to have hardened for many into conviction.