The Mitt Romney Vision of Prosperity and Foreign Aid

Posted on by Laurie Garrett

T’is the season of speechifying in New York, as the United Nations General Assembly opens, Bill Clinton hosts his annual confab a few blocks away, and every organization hoping to influence global policies stages events from one end of Manhattan to the other. So far the strangest speech was that delivered by Presidential candidate Mitt Romney, when addressing the Clinton Global Initiative.

Romney spoke on Tuesday, September 25, to a gathering pre-biased well to the left. He knew he was facing a tough crowd, and merits praise for showing up. The audience, as it turns out, was polite and quiet: while Romney got no huzzahs, the Republican escaped without boos. And that civility was remarkable, given what Romney said.

The former Massachusetts Governor announced that as President he would change the entire U.S. foreign assistance system into one that would feature “Prosperity Pacts,” which would function on a strict quid pro quo basis: America will send you money only if you drop all existing trade and investment barriers that are objectionable to U.S. companies. While other would-be presidents have tap-danced around the issues of trade and investment, Romney’s “Prosperity Pacts” constitute the most blatant linkage of U.S. corporate interests to foreign aid ever drawn by an American political leader. A quick check with colleagues that are expert in the history of the American Presidency confirms the extraordinary, unprecedented global chutzpah of the Romney scheme.

No audible outrage was expressed by the resource-hungry crowd of NGOs, health groups, and celebrities. Polite nods gyrated. Did they miss what he was saying?

The would-be President warmed the crowd with homilies about open capitalism:

“Free enterprise has done more to bless humanity than any other economic system not only because it is the only system that creates a prosperous middle class, but also because it is the only system where the individual enjoys the freedom to guide and build his or her own life. Free enterprise cannot only make us better off financially, it can make us better people.”

Romney then listed what he labeled as “three, quite legitimate, objects” of U.S. foreign aid: “First, to address humanitarian need… Second, to foster a substantial United States strategic interest, be it military, diplomatic, or economic.”

And third, “aid that elevates people and brings about lasting change in communities and in nations.”

So far, so good. Vague, but hardly objectionable to even the most hard-core liberal foreign assistance wonks. Then came the “Prosperity Pacts:”

“I will initiate ‘Prosperity Pacts.’ Working with the private sector, the program will identify the barriers to investment, trade, and entrepreneurialism in developing nations. In exchange for removing those barriers and opening their markets to U.S. investment and trade, developing nations will receive U.S. assistance packages focused on developing the institutions of liberty, the rule of law, and property rights.

We will focus our efforts on small and medium-size businesses. Microfinance has been an effective tool at promoting enterprise and prosperity, but we must expand support to small and medium-size businesses that are too large for microfinance, but too small for traditional banks.”

The boldface emphasis is mine: Since the audience apparently missed the point, I thought it wise to underscore the quid pro quo. Romney went on to assert that American companies that open factories in poor countries pay more than local competitors, “and more than one-third of manufacturing jobs are tied to exports. Sadly, we have lost over half a million manufacturing jobs over the last three and a half years.

As president, I will reverse this trend by ensuring we have trade that works for America. I will negotiate new trade agreements, ask Congress to reinstate Trade Promotion Authority, complete negotiations to expand the Trans-Pacific Partnership, and create what I call a ‘Reagan Economic Zone,’ where any nation willing to play by the rules can participate in a new community committed to fair and free trade.”

Though the audience of Clinton-loving global expertise continued nodding politely, it can’t have entirely escaped them that Romney was signaling complete elimination of all current forms of foreign assistance, from PEPFAR to USAID. In case they failed to get the point, Romney added, “I’ve laid out a new approach for a new era. We’ll couple aid with trade and private investment to empower individuals, encourage innovators, and reward entrepreneurs.

Perhaps the Americans in the audience have become inured to shocking rhetoric in this election. After all, two days before the candidate called for “Prosperity Pacts” he told Scott Pelley on the TV show “60 Minutes” that all Americans DO have access to healthcare, despite the millions that are uninsured. Pelley asked if government has any responsibility to care for the uninsured, and Romney responded:

“Well, we do provide care for people who don’t have insurance, people—we—if someone has a heart attack, they don’t sit in their apartment and die. We pick them up in an ambulance and take them to the hospital and give them care. And different states have different ways of providing for that care.”

Two years ago on MSNBC’s “Morning Joe” show Mike Barnicle asked Romney, “Do you believe in universal health coverage?”

Romney responded, “Oh, sure. Look, it doesn’t make a lot of sense for us to have millions and millions of people who have no health insurance and yet who can go to the emergency room and get entirely free care, for which they have no responsibility. Particularly if they’re people who have sufficient means to pay their own way.”

Perhaps a President Romney would help a desperate, epidemic-plagued nation—he wouldn’t just let a country sit in its figurative apartment and die of a metaphoric heart attack. But for a man of business, Gov. Romney displays a remarkable lack of economic sense.