As a boy growing up in Michigan, Mitt Romney would sometimes ask his father, American Motors CEO George Romney, how he could compete against General Motors, which commanded a 60 percent share of the U.S. auto market in the 1950s. "There is nothing as vulnerable as entrenched success," the elder Romney would tell his son.
Speaking at TD Ameritrade's annual conference in Orlando, the 2012 Republican presidential candidate voiced his fears that America today is in much the same place today as General Motors was half a century ago.
Indeed, Michigan Gov. George Romney expressed similar fears as his son nearly 50 years ago.
After World War II, America was complacent as the world's dominant economy. It enjoyed an unparalleled degree of economic dominance no nation had occupied since the Roman Empire. George Romney warned his son that this position led to underinvesting, cutbacks in research and development and unsustainable union contracts, all of which would ultimately bring General Motors to bankruptcy in 2009.
Today, the younger Romney worries that the burdens placed on businesses by taxes, government regulations and "by businesses themselves" threaten the competitive position of America in the 21st century. In competitiveness, the U.S. is doing worse than many nations, "particularly" in the area of regulation and taxation of small business.
Federal debt is also a huge problem. Romney related the story of a friendly call he received from former President Bill Clinton after the 2012 election in which the ex-president expressed similar fears. Clinton told Romney that if interest rates were at the same level they were when he was president, interest expense on the federal debt would cost the U.S. $750 billion annually. That would represent more than 20% of the $3.55 billion annual federal budget today. Although that percentage isn't that different from what Clinton inherited in 1993, the magnitude of today's debt is disguised by record low interest rates.
Romney also noted that in many areas the concerns of his supporters were not that different from those of many Democrats. When he polled his contributors on what they considered the most important issues, poverty ranked fourth; debt and the deficits were first and second. Surprisingly, social issues often identified with several wings of the Republican party ranked near the bottom.
Romney also said he considered global warming to be a serious problem. But like poverty, it's a global problem, and carbon emissions in the U.S. are projected to remain relatively flat while they are expected to soar in China and India in the next two decades.
Poverty is also a global problem. The good news is that poverty rates are falling abroad. The bad news is that they are rising in America, partly because of the surge in single-family households, he said.
Most frustrating to Romney is the fact that most Americans agree on what the problems are but the last several administrations have failed to deal with the challenges, even though they are hardly insurmountable.