News analysis: Differing philosophies at the core of economic arguments for President Obama, Mitt Romney

Published: Sunday, June 17 2012 12:00 a.m. MDT

Obama, on the other hand, is continuing to push his "to-do list," which includes rewarding businesses that move operations back to the U.S., creating new legislation that gives a 10 percent income tax credit to firms that create new jobs or increase wages in 2012 and investing in clean energy manufacturing.

On Tuesday, the Energy Department announced the awarding of $54 million for 13 projects across the country. The awards include Air Products and Chemicals, Inc., $1.2 million; American Iron and Steel Institute, $7.1 million; Delphi Automotive Systems, LLC, $3.7 million; General Motors LLC, $2.6 million; Lyondell Chemical Company, $4.5 million; MEMC Electronic Materials, Inc., $3.6 million; MIT, $1 million; PolyPlus Battery Company, $8.9 million; Research Triangle Institute, $4.8 million; Teledyne Scientific and Imaging, $2.1 million; The Dow Chemical Company, $9 million; The University of Utah, $1.4 million and Third Wave Systems, Inc., $4 million.

"Collectively, these projects are part of the Obama administration's effort to support the creation of good jobs by helping U.S. manufacturers reduce costs, improve quality and accelerate product development," the announcement said. "By strengthening the competitiveness of U.S. manufacturing, these projects will help lay a foundation for an American economy built to last."

The debate over the two paths laid out by the candidates shows signs of success and dangers for both.

In a Democratic focus group by James Carville's Democracy Corps, the final report said that, "despite Romney's clear weaknesses, when asked whether Romney or Obama would do a better job on the economy, more chose Romney. That is some measure of the challenge we face, since many have heard the president's economic message."

"We will face an impossible headwind in November if we do not move to a new narrative, one that contextualizes the recovery but, more importantly, focuses on what we will do to make a better future for the middle class," the report overview said. "It is elites who are creating a conventional wisdom that an incumbent president must run on his economic performance — and therefore must convince voters that things are moving in the right direction. They are wrong, and that will fail."

The Christian Science Monitor suggested that Obama's attacks on Bain Capital may be working, with a Purple Poll survey showing that 47 percent of likely voters agree with the statement that private equity firms "care only about profits and short-term gains for investors. When they come in, workers get laid off, benefits disappear and pensions are cut. Investors walk off with big returns, and working folks get stuck holding the bag."

In contrast, 38 percent agreed that, "private investment and equity firms help the American economy grow. They launch new companies and rebuild existing ones, including some of the biggest employers in America. Their work has created millions of jobs, and will help drive America's recovery."

Choosing between the Keynes and Hayek models has proven to be both difficult and contentious for decades, and will likely be no different in the 2012 election.

"If it was as simple as saying, 'Well, that's plainly the truth and that makes no sense at all,' it would be easy, but it's not like that at all," Wapshott said on NPR. "At the same time, these are two totally irreconcilable views of the world. You can't have Keynesianism and Hayekianism in the same country at the same time."

Or, as the two economists would argue in another Russ Roberts and John Papola Keynes/Hayek rap video, the choice between the two views may be summed up like this:

Keynes: "So what would you do to help those unemployed? This is the question you seem to avoid. When we're in a mess, would you just have us wait? Do nothing until markets equilibrate?"

Hayek: "I don't want to do nothing, there's plenty to do. The question I ponder is who plans for whom? Do I plan for myself or leave it to you? I want plans by the many, not by the few."

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