I've been delving a bit into what the Romney campaign and its economist fellow-travelers have been saying, and I think I have figured out the true economic doctrine that Mitt Romney and his inner circle have in mind. It is, needless to say, not what the campaign has claimed.
The official line has been that Mr. Romney's five-point program will create scads of jobs. There are a couple of problems with this. First, the program is vacuous — for the most part it's a statement of desired outcomes, not policies. Second, as Glenn Kessler pointed out recently in The Washington Post's "Fact Checker" column, the studies claimed as justification for the 12-million jobs number don't at all say what the campaign asserts they do.
Actually, one point that should be made: Mr. Kessler isn't quite right in his critique of a paper written by the economist John W. Diamond, in which Mr. Diamond describes big employment gains from the Romney tax plan. The time horizon is not, in fact, a big deal. What is a big deal is that the paper is an analysis of an economy that is assumed to be continually at full employment. The "job gains" the paper estimates are supply-side, not Demand-side — they represent an increase in the number of people who want to work, not an increase in the number of jobs available.
If you like, Mr. Diamond is claiming (implausibly) that there would be a big jump in the labor-force participation rate.
And this, of course, has nothing to do with the problems of an economy where people who want to work can't find jobs.
So the Romney campaign is lying about the rationale for its boasts about jobs. But what's the real story? The answer is actually pretty clear: confidence.
Mr. Romney's notion is that we'd be having a rip-roaring recovery right now, except that Job Creators feel that President Obama is looking at them funny. And so all Mr. Romney has to do is show up, and happy times will be here again.
Now, the obvious riposte here is that we know why we have a weak recovery, and it's not because of Mr. Obama's evil eye — it's the normal hangover from a severe financial crisis, which could only have been averted by much stronger fiscal and monetary stimulus. But that's not a story the Romney people want to hear. Hence the determined effort by people like John Taylor, an economist at Stanford, to dismiss everything we've learned about the macroeconomic effects of financial crises.
So there you have it. The true plan is to provide an economic stimulus in the form of Mr. Romney's awesome awesomeness; the cover story is his pretense of having an actual program. Are you feeling confident yet?