Nicholas Wapshott

There is the truth. Then there is the whole truth. Mitt Romney is still lagging behind the president in Ohio, the weather-vane state that has voted for every president since Abraham Lincoln and where Barack Obama is credited with saving millions of jobs in the auto industry. But the governor’s insistence in the second debate that Obama’s rescue of General Motors and Chrysler was the same as his plan was only half the story.

When Romney said “[W]hen you say that I wanted to take the auto industry bankrupt, you actually did. … That was precisely what I recommended and ultimately what happened,” he was leading voters to believe there was little difference between restructuring by the federal government car czar Steve Rattner and his own prescription: to let the firms go bust, let the markets clear, then reassemble the broken parts.

Romney’s surrogates blame a headline in The New York Times, “Let Detroit Go Bankrupt”, over an op-ed by Romney in October 2008 for fueling confusion over where their candidate really stands. The opening lines appear to contradict their version. “If General Motors, Ford, and Chrysler get the bailout that their chief executives asked for,” he wrote, “you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.” He went on to argue for a managed bankruptcy, but was vague about the role federal officials should play.

In February, in the heat of the GOP primaries, when Romney needed to appease those who believe the “creative destruction” creed of Joseph Schumpeter, he expanded on his thinking in the Detroit News and derided the auto rescue as “crony capitalism,” a cozy collaboration between government and private enterprise much derided by the Koch brothers, major funders of Romney’s super PACS.

“Obama stepped in with a bailout for the auto industry,” Romney wrote. “[The] indisputable bad news is that all the defects in President Obama’s management of the American economy are evident in what he did.” Obama’s plan saved millions of jobs, not only in the auto industry, but in the parts suppliers, dealerships, and all those who service motor production – and the storekeepers, realtors, teachers, and so on, who depend upon them – and, by the way, not only in Ohio but in all the Great Lake states and way beyond. Romney’s sly suggestion now that you can’t slip a cigarette paper between his plan and Obama’s is, to put it politely, far-fetched.

Romney likes to have it both ways with the bank bailout, too. When it comes to perhaps the core issue in this election, the role government should play in promoting growth – in brief, to intervene or let the market find its own level; Keynes v. Hayek, if you will — he is like a Hong Kong tailor. You want wide lapels or narrow? Want a vent or a flap? Buttons or a zipper? Turn-ups? You got ’em! Just so long as I make the sale.

When speaking to Tea Party types, Romney is against the bailout. “When government is trying to take over health care, buying car companies, bailing out banks, and giving half the White House staff the title of czar – we have every good reason to be alarmed,” he told a Values Voters Summit in 2009. But just a year before he had backed George W. Bush’s  Trouble Asset Relief Program, hosing billions of taxpayers’ dollars into banks without anything in return. “President Bush and Hank Paulson said, ‘We’ve got to do something to show we’re not going to let the whole system go out of business,’” he said. “I think they were right.”

The problem with Romney is that even he doesn’t seem to know what he believes. Like Woody Allen’s Zelig, when he is with conservatives he is a conservative. When appealing to the middle ground he is a moderate. In the company of dogmatists who obey the diktats of long-dead theoreticians like Ayn Rand, Ludwig von Mises, Friedrich Hayek, Joseph Schumpeter, and the rest, he is an ideologue. In TV debates he is a pragmatist.

The nation faces a clear choice: whether to use the spending, borrowing, and lending powers of the federal government to end the lingering malaise that blights the languishing economy–or to wind down the pensions, health care, and drug benefits for the elderly, universal health care, and safety net for the needy and use the money to reduce taxes.

After five of the most tumultuous years in America’s economic history and after some of the most vituperative political debate ever to divide the nation, it is hard to understand voters who still cannot make up their mind. But Romney’s pushmi-pullyu impersonation, facing this way one day and that way the next, is beyond belief.

Obama is clear. As he said in the second debate, “[W]hen Governor Romney said we should let Detroit go bankrupt, I said, ‘We’re going to bet on American workers and the American auto industry’, and it’s come surging back. I want to do that in industries, not just in Detroit but all across the country.” The fact that Romney cannot without obfuscation state his position on the central issue facing the nation is troubling, not least to conservatives who intend to vote for him.

Nicholas Wapshott’s Keynes Hayek: The Clash That Defined Modern Economics has just been published in paperback by W. W. Norton. To read extracts click here.

PHOTO: U.S. President Barack Obama (R) listens as Republican presidential nominee Mitt Romney answers a question during the second presidential debate in Hempstead, New York, October 16, 2012. REUTERS/Lucas Jackson

We are in the midst of a presidential race lacking in passion. After four years, with the economy languishing, the optimism Obama appeared to represent last time is absent. Democrats will go to the polls without a spring in their step, to keep Romney out rather than save Obama’s neck. Even the president himself, if his hangdog look in the first debate is any guide, has lost his mojo. Obama has achieved what Romney could not: He has angered his own supporters for not fighting hard enough for the ideas they cherish.

On the Republican side, conservatives and libertarians will vote for Romney more out of duty than in the belief he will represent their views in government. They feel the Republican establishment has foisted Romney upon them because he seemed likely to appeal to middle-ground voters who decide elections. They think his lack of genuine commitment to conservative ideology means he will win the White House, then ignore their wishes, just as the Bushes, father and son, did before him. Conservatives will be voting as much to prevent Obama’s second term as to elect Romney.

These seem the perfect circumstances for a third-party candidate. In fact there are others offering themselves as president, though you may be excused for not knowing their names. They include Gary Johnson of the Libertarians, Jill Stein of the Greens, even the comedienne Roseanne Bar, who promises to legalize marijuana, forgive student debt and end all wars. But none of the above, or a further seven nobodies on the ballot, stand a chance. Without billions to spend and a popular head of steam, they are ignored by the press and cannot penetrate the public consciousness.

In the past, third-party candidates who have made a mark have either, like Ross Perot, Steve Forbes, and John B. Anderson, paid for their own campaign, or, like Ralph Nader and Pat Buchanan, enjoyed a national reputation. In 1992, Perot’s brief candidacy took support away from George H.W. Bush and helped ease Bill Clinton into the White House, while many believe Ralph Nader’s intervention in the 2000 photo finish made George W. Bush president.

If there is a lack of enthusiasm on both sides this time, why has a third candidate not emerged? First, no towering figure backed by billions is prepared to run. There was briefly a lot of excited talk about New York’s mayor, Michael Bloomberg, entering the race, but it fizzled. Ron Paul’s failure to win the GOP nomination encouraged his supporters to think he might run as an independent, but Paul appears to believe challenging Romney would diminish his son Senator Rand Paul’s chances of eventually winning over the Republican Party to libertarianism. Having failed to gain traction in the Republican race, Donald Trump might have offered himself as an independent, but even he was not prepared to fund such an expensive ego trip.

Second, there is little appetite for a third man (or woman) in the race. Americans Elect prepared the groundwork for an independent candidate, including saving a place on the ballot, a requirement that has stymied more experienced politicos. But the initiative failed to catch fire, too few took part in the campaign’s online primaries and the effort was abandoned. Americans Elect promises to try again next time.

It is common in high-stakes, closely fought contests for the middle to be squeezed. This election offers a stark choice between liberal, interventionist, “Keynesian,” and socially progressive Obama and conservative, pseudo-libertarian, somewhat “Austrian,” and socially regressive Romney. The country is equally divided between red and blue. Obama may have led Romney narrowly in all but a handful of national polls since the beginning of the year, but Romney is enjoying a bounce from the first debate, and the race remains too close to call.

There is little feeling, however, that if only there were a third candidate, the choice facing Americans on Nov. 6 would be any easier. Nor is there a rash of independent candidates out in the states taking advantage of the face-off at the national level. This time there is a distinct shortage of entertaining maverick candidates like Arnold Schwarzenegger and Jesse Ventura.

In Europe, however, mainstream parties of both left and right are being challenged by a rash of independents as punishment for attempting to cure their economic ills by imposing austerity. France threw out a conservative president, Nicolas Sarkozy, and replaced him with a socialist, François Hollande. Spain voted out a socialist, José Luis Rodríguez Zapatero, and elected a conservative, Mariano Rajoy. But the true winners in each case, and in other similar European ballots, were smaller, more extreme anti-austerity parties.

In France, the National Front’s Marine LePen, an avowed racist who dismisses the Holocaust as “a detail,” persuaded one in five to vote for her. In Spain, one in four backed minor peripheral parties. Europe has seen the emergence of half-laughable, half-sinister iconoclasts and apostates not seen for a couple of generations, including Italy’s colorful Beppe Grillo, described by the New Yorker as a “combination of Michael Moore and Stephen Colbert,” and German agitator Thilo Sarrazin, whose extreme anti-immigration, anti-Muslim views chime with half of his country’s voters. If the next American administration follows the European example and starts to tackle the deficit by cutting spending too sharply too soon, new faces will start emerging here, too.

Nicholas Wapshott’s Keynes Hayek: The Clash That Defined Modern Economics has just been published in paperback by W.W. Norton. Read five extracts here.

PHOTO: U.S. flags are seen at the Veteran Stand Down event at the American Legion Post 390 in Hempstead, New York, July 16, 2012. REUTERS/Shannon Stapleton