(Full text of the speech can be seen here: http://www.nationalreview.com/corner/269021/full-text-tim-pawlentys-economic-speech-nro-staff)
As someone who is paying particular attention to each candidate's economic solutions, as I believe it will be at the forefront of the 2012 general election, I was impressed with the substance of Pawlenty's plan.
Pawlenty starts out the speech by derailing the failed policies of both Bush and Obama, although he does not directly reference Bush. He derails the stimulus, bailouts, and government takeovers---good but nothing special.
He then boasts the guts he possessed in calling for an end to subsidies, particularly ethanol, in Iowa. And he mentions how he came to Florida (my home state) and called for a raising of the retirement age for the next generation and for reform of Social Security. He also cites how he stuck it to the Wall Street execs by going to NYC and calling for an end to the bailouts.
So far, so good.
Pawlenty later makes a simple statement, but the truthfulness of it speaks volumes:
"The truth about our economy isn't hard at all. Markets work. Barack Obama's central planning doesn't."
Straight out of The Road to Serfdom seemingly.
Pawlenty proceeds to talk about how government regulations under the Obama administration has bogged down the private sector and has discouraged investment (You only need to look at my previous post concerning the Fed and the price of oil for proof of this). Pawlenty then says that the current economic growth rate of 2% is not acceptable and as president he would push for a growth rate of 5% as was done under the administrations of both Reagan and Clinton. He says he would accomplish this goal by "creating more economic freedom" by way of tax reform, elimination of subsidies, and reduction, and elimination, of cronyism.
This supply side economics approach is very beneficial as Pawlenty later indicated, in an interview with Larry Kudlow on the Kudlow Report, that this growth in the supply side would not be for the purpose of simply growing government revenue. Rather, a reduction into two simple tax rates (first 50k for individuals and 100k for married couples taxed at 10%, everything greater taxed at 25%) would, in the short term, result in a decrease in government revenue. But, because of an increased incentive for businesses to invest and hire courtesy of simpler tax rates, in the long term, government revenue would increase.
Pawlenty then illustrates the projected result of these policies:
"5% economic growth over 10 years would generate 3.8 trillion dollars in new tax revenues. With that - we would reduce the deficit by 40%. All before we made a single budget cut."
After a speech like this, I wouldn't be surprised to see Art Lafffer come out in support of Tim Pawlenty.
Another highlight of the speech was Pawlenty's proposal of what he dubbed "The Google Test."
"If you can find a good or service on the internet then the government probably doesn't need to be doing it."
This is a GREAT philosophy for ardent free marketeers like myself, as anyone can see that almost everything the government does is available on the internet. Following this philosophy would absolutely do wonders in reducing the size of the Leviathan.
There were other good parts to his economic plan but I will stick with these points. Had this solely been his plan, it would have my ringing endorsement. But it also comes with a derailment of government run healthcare, crony unionization, and promotion of sound monetary policy. Pawlenty was actually against Bernanke's nomination as Fed chairman, that puts him in good company with Ron Paul and Gary Johnson. Pawlenty also coined the term "Obomneycare" to illustrate similarities between Obamacare and Mitt Romney's healthcare plan installed during his tenure as governor of Massachusetts.
Good monetary policy? Check. Supply side economics approach? Check. Market economy rhetoric? Check. Anti centrally planned economy? Check. Entitlement reform? Check.
So, what's the problem? Well, as the title of this post indicates, Tim Pawlenty.
Good on rhetoric Pawlenty is. But that shouldn't come as a surprise. The guy's running for President. Good on record, however, Pawlenty is not.
Despite the rhetoric of the speech, as governor of Minnesota Tim Pawlenty did more than his fair share of flirting with government intervention in the market economy. He was originally a supporter of cap n' trade. Not a free market approach. When dealing with healthcare, he actually gave consideration to an individual mandate. A true free marketeer would not even consider it.
So we can already see a lack of conviction in Pawlenty's economic philosophy. It's this kind of inconsistency that results in situations where supposed free marketeers like Alan Greenspan can be seen calling for the government to save failing companies.
In fact, just days after this speech, Pawlenty appeared on Fox News Sunday distancing himself from his goal of 5% economic growth. He called this "a stretch plan" and more "aspirational."
It's precisely this lack of gumption that is lacking in many politicians. But in this case, it's enough to deter anyone who is really looking for something different and workable in terms of saving the American economy.
That is what leads me to conclude that Pawlenty's economic plan, I support. But supporting Pawlenty himself? That's unlikely.