John McCain and Mitt Romney have both been campaigning in Michigan this week for today’s presidential primary. It is interesting to hear what they say about the economic situation in Michigan which has one of the highest unemployment rates in the country at 7.5%. The discussion highlights the enormous pressure politicians face to say what people want to hear.

John McCain: (Quoted from this source)

“Some of the jobs that left the state of Michigan are not coming back,” McCain said, before talking about his ideas for economic recovery around the country. His plan includes educational programs developed and run through community colleges to train displaced workers.

That inspired the following remark by a reader in MI:

Thats what i want John – a chance to go back to college to be trained for another job you will either outsource or hand over to some illegal.

Whats with these guys telling me to go back to school at 55? Maybe they gave up on american ingenuity but i’m not.

Hey – i’m 55 – i’m not goin back to school!!!

Mitt Romney responds with what threatened workers would probably want to hear:

“Now, I know that there are some people who don’t think that there’s a future for the domestic automobile industry. They think that the industry and its jobs are gone forever. And they’re wrong.

“Innovation and change present the opportunity for transformation. And the burdens on American manufacturing are largely imposed by government, and new leadership in Washington can lift the burdens and lift the industry.
…..

“The pessimist says that the hundreds of thousands of jobs that have been lost, have been lost forever. That logic of course says that the 200 jobs that were lost last week at Willow Run, they’re lost forever too. And by the way, that logic would also say that all the rest of the jobs in the auto industry will one day be gone forever, and there’s nothing that can be done about it.

“Well, the pessimists are wrong. The auto industry and all its jobs do not have to be lost. And I am one man who will work to transform the industry and save those jobs.

Both candidates are Republicans who say they favor free trade and free markets as long as its fair. McCain’s remarks seem more realistic because they recognize the ever changing dynamics of a free market economy. At the same time, if one accepts that dynamism, one must also accept the uncertainty of not knowing what the new jobs will be in the future for MI. For the workers who have to live that uncertainty, worker retraining is not music to their ears. The 55 year old worker is right. He’d prefer to have the President promise to bring back the good jobs
that were once there, just like Romney promises.

So here’s a big problem with the system; if a candidate is honest about the realities of a free market and open competition, he risks losing the support of those who ask, What will you do for me?” On the other hand, if you cater to the individual interests of voters around the country, who have many different special and particular interests, you risk committing oneself to a much larger role for government.

Romney tries to protect himself from promising too much by saying, “I am not open to a bail out, but I am open to a work out.” But will this be enough to bring back the lost jobs and protect the jobs that might be lost in the near future. No one can know for sure.

What ultimately happens is that Presidents who support free markets and less government ultimately face enormous pressures for competitive protection and they usually relent. Even Ronald Reagan caved in to protectionism by offering higher tariffs on motorcycle imports and negotiating voluntary export restraints with Japan even though he was a stalwart free trader. Unfortunately, principle rarely wins out over the political pressure of special interests.

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