It did not take long for the verdict to be reached on the first face-to-face debate of the campaign: President Obama's performance was about as lackluster as the current state of the U.S. economy. It may not matter much to the final election outcome, but his inability to make a stronger case for his economic management highlights one of the disadvantages of incumbency -- that governing is a chastening experience.
Candidates run on a set of optimistic and essentially unprovable theories about how the economy might respond to their favored medicine. Sometimes they get lucky, as Presidents Reagan and Clinton did. But more often they run for re-election knowing that their theories are unlikely to survive the stubborn challenges that await.
President Obama has learned what my CFR colleague Michael Spence has called "the hard truths about global growth" -- that incomes for the middle classes in the advanced economies are likely to remain stagnant for some time, that growth is likely to be modest as deleveraging continues, and that governments face an almost zero-sum choice among financing consumption, financing investment, or bringing deficits under control. Thus much of Obama's pitch was about the difficult decisions he believes must be faced, which involve raising at least some taxes and cutting at least some consumption, especially through cost controls on Medicare, to finance investments in education and infrastructure that will not pay off anytime terribly soon.
In contrast to that dour message, Mitt Romney was able in the debate -- in a way he had not really done in the campaign -- to capture the edge in optimism. His economic platform boils down to the hopeful prediction that an overhaul of the tax code and the rolling back of certain Obama era regulations (health care, much of the Dodd-Frank financial legislation, restrictions on energy exploration on public lands, etc.) would unleash a new era of stronger growth that will make the hard choices avoidable.
While Romney's running mate, Paul Ryan, has sketched out a budget plan that would actually make deep cuts in government spending on the poor and elderly, Romney steered clear of those sorts of specifics. Instead, he promised that robust growth created by a revenue-neutral tax overhaul and some regulatory tweaking would keep the deficit under control, free up more money for Medicare and allow him to boost military spending, while making only modest cuts to the most obviously wasteful or unnecessary government programs.
The reality, of course, is that Romney's plan would almost certainly allow nothing close to that. Nor, for that matter, would President Obama's plan to let taxes on the wealthy to revert to Clinton-era levels suddenly ignite Clinton-era growth rates. Either will confront an economic and fiscal situation in which any of the plausible choices are difficult ones.
Optimism has long been an American trait, and certainly Romney's political advisers must be delighted that he has finally tapped into it. Yet the polls at the moment still give an edge to the president, who is asking voters for patience while the economy slowly crawls out of worst economic crisis in three-quarters of a century. There is a great irony, to be sure, that the candidate of hope and change has now become the candidate of incremental progress and tough decisions. But governing requires a sense of irony. It helps for coping when the promises don't work out quite as planned.