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Mitt Romney: Job Creator?

August 1, 2011

Democratic talkers are already testing a line of attack on Republican front-runner Mitt Romney.

Romney, they say, was not much of a job creator as governor of Massachusetts. In fact, during the Romney years 2003-2007, Massachusetts ranked 47th of the 50 states new jobs created. While the Massachusetts unemployment rate did decline during Romney’s tenure, that decline was more due (according to Northeastern University) to a consistent out-migration of working-age residents. Massachusetts’ manufacturing employment declined by more than fourteen-percent, the third worst in the nation. The Boston Globe scathingly summarized the Romney record: “On all key labor market measures, the state not only lagged behind the country as a whole, but often ranked at or near the bottom of the state distribution.”

A tough verdict. But not a fair verdict. As governor, Romney had some clear economic successes: he closed a $2 billion budget shortfall in his first year, he cut government spending, housing prices led the nation and he cut large amounts of red tape from Massachusetts’ laws.

As for the poor job record, Romney has an arguably justifiable explanation. Romney inherited a very tough economy critically damaged by the collapse of its the once-vibrant technology sector.

Massachusetts depends crucially on technology industries, which are the second largest sector in the state. The cycles in the industry drive the cycles in the state economy. When the PC replaced the minicomputer in the late 1980s, the Massachusetts economy dipped into recession.  The downturn Romney inherited stemmed from the dotcom bust. The current (relative) upswing in Massachusetts is widely attributed to a pickup in biotechnological industries.

Romney is correct to point out one central point about his record: “The governor before me lost jobs; the governor after me has lost jobs; we actually created jobs.” When Romney took office, Massachusetts had the highest job-loss rate in the nation. During his four years, he was able to at least steer the ship in the right direction. But he did so incredibly slowly.

To better understand Romney’s pace of job creation, I talked to Michael J. Widmer, President of the Massachusetts Taxpayer Foundation. Widmer emphasized first that before evaluating the record of any governor, one ought to understand that, particularly in the short-term, he possesses little actual ability to influence the economy.

But, since Romney is campaigning on a platform of job creation, it’s important to examine his claims. Widmer saw Romney’s record as generally “poor”. The Taxpayer Foundation corroborated other reports stating Massachusetts was 47th in jobcreation – a pace Widmer calls “anemic.”

Moreover, Widmer was “most critical” on the point that Romney had “no blueprint” to deal with the business climate of Massachusetts. Widmer agrees that the state, through high costs, a large regulatory environment, and a negative political culture, has a somewhat hostile environment for business. Although Romney campaigned on fixing this, Widmer argues that Romney didn’t really address it. Granted, this was a very hard promise to keep – it would “take superman” to do it in one term – but Widmer holds this cannot be an accomplishment Romney touts.

There is some silver lining – for example, Romney’s Secretary of Economic Development Ranch Kimball, spearheaded efforts to help expand and keep internal commerce in Massachusetts (rather than hoping to bring business in – a big stumbling block in the state) that had “incremental successes.”

All in all, Widmer portrayed the Romney record as unsatisfactory. Simply put, when asked if Romney at least set the groundwork for policies to later bear fruit, he responded: “Not really.”

These are the concerns Governor Romney will need to address. Although Massachusetts did restart growing and employing people while he was governor, Romney needs to answer two vital questions: 1) Did it happen at an acceptable pace, and 2) Could he have done anything else?

“Mitt Romney: Job Creator?” – FrumForum

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