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Morici: It's Time for Herman Cain to Exit

Herman Cain
Herman Cain

Herman Cain is losing luster among Republicans. After initially holding up well in polls in the face of unproven accusations of sexual misconduct, his favorability ratings are starting to fade. His campaign may survive this controversy but it may be time for Mr. Cain to exit.

Revelations that two women received cash settlements from the National Restaurant Association more than a decade ago, after complaining that then CEO Cain acted in sexually inappropriate way, is not enough to disqualify him for the presidency. Well intended Equal Employment Opportunity Commission rules for employers can encourage unwarranted finger pointing that little serves genuine victims or innocent defendants. Often, cases are settled to avoid high legal costs.

That said, Herman Cain’s responsesto charges raises concerns that he has something to serious to hide, or at least that he is not yet ready to be the Republican candidate.

When confronted that two women had come forward, at first he claimed no clear recollection of misconduct charges, but later reversed himself and offered his account of what one woman alleged. Importantly, he first claimed no financial payouts were made, but subsequently recalled at least one financial settlement.

It is unlikely the merits of these two complaints will ever be known. Even with a waiver available from nondisclosure clauses in the settlement agreements, these women have not been willing to identify themselves, detail their allegations and confront Mr. Cain—it’s tough to evaluate the veracity of claims without those.

Sexual harassment is a scarlet letter. Just as victims never forget, men accused without cause don’t forget either, making Mr. Cain’s lapse of memory inexplicable. And a CEO, whose organization cashes out complaints for allegations about his own actions, should be aware of settlement agreements unless he is simply not doing his job.

And those are not Mr. Cain’s only gaffs.

Mr. Cain’s 9-9-9 tax proposal makes great economic sense but when pressed, he cannot explain why it does or how it would work. For example, when asked about how the nine percent sales tax would treat imports, he doesn’t know—this despite the fact that European countries have extensive experience with this issue, economist and lawyers have studied those issues ad nauseum, and the treaties the United States and EU have signed permit applying sales taxes to imports and refunding the same on exports to maintain neutrality in competition between foreign and domestic products.

If Mr. Cain indeed has economic advisors, they are either negligently incomplete in their briefings, or he is disinterested in relevant details. Instead, Mr. Cain throws around 9-9-9 like a Pizza promotion, and expects us to accept he will figure things out if we elect him President.

Recently, Mr. Cain appeared with Newt Gingrich in a two-man debate that resembled a town meeting—the format afforded to each opportunity for long elaborations of positions. When Mr. Cain was asked how he would restructure Medicare, he paused, gazed to the ceiling and said “You go first Newt.”

If the GOP is united, arm-to-arm that Obama Care must be repealed or radically altered, then whomever it nominates should have a plan for controlling costs and trimming federal health spending. Those absolutely have to begin with restructuring Medicare and Medicaid, but Mr. Cain is not prepared to detail his approaches on those reforms.

Your Money your Vote - A CNBC Special Report
Your Money your Vote - A CNBC Special Report

At this juncture, to clean up the most pressing economic problems—health care, education, domestic energy production, regulatory overreach, and the huge budget and foreign trade deficits—men and women seeking the presidency should be able to present and defend clear plans to address those challenges.

After the missteps of Messrs Obama and Bush, it should no longer be satisfactory for presidential aspirants to exhort the government must lead, or tax cuts and deregulation is the tonic for whatever ails the nation.

The government is going do a lot of spending, taxing and regulating no matter who is president. Candidates must explain how things are broken and how they plan to fix them.

Surveying the Republican field, Romney, Gingrich and Huntsman have adequate answers, but some others, in particular Mr. Cain, do not.

Mr. Cain has a list of accomplishments most of us would be proud to possess, but he has not yet adequately prepared to run for president.

Peter Morici is a professor at the Smith School of Business, University of Maryland, and former Chief Economist at the U.S. International Trade Commission.

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