Word is out that former Massachusetts Governor Mitt Romney will likely announce his run for the GOP presidential nod next Tuesday, but Wednesday he reminded CNBC's Larry Kudlow, "I'm not a candidate yet."
Romney sure sounded like one, just hours after delivering the first major policy speech of what's not an '08 campaign... yet. Romney, the Harvard Business School grad who made his mark on Boston's business community as a founder of the multibillion-dollar investment firm Bain Capital, spoke to the Detroit Economic Club in his home state of Michigan.
Keeping with the economic theme, Romney gave an exclusive interview to CNBC's Larry Kudlow. With a background like Romney's, it's possible the economy could become a focus of that upcoming bid. He’s already enlisted the help of two powerhouse economic advisers. Glenn Hubbard and Greg Mankiw, who joined Romney's PAC last fall, both served as chairmen of President Bush's Council of Economic Advisers.
Romney told Kudlow he's not afraid to be branded as a capitalist. "Profits do not go into the pockets of executives," Romney said. "By and large they are reinvested in new technology and new ideas and growth. What you want to see is profits in corporations where those corporations invest in the in new technologies and new ideas. And that is our future."
Profits and paychecks are, of course, at the center of the roaring debate over executive compensation, and whether some company chiefs are paid outrageous amounts at the expense of shareholders and employees. Romney said he is against any kind of government intervention when it comes to CEO pay. "In some cases I think they pay compensation packages that are excessive and unnecessary. That's shame on the board and the owners," he said.
"But I wouldn't begin to suggest that the federal government should step in and say, 'We're going to now know manage the compensation of executives.' The best people would leave the country in that kind of setting. What do you pay someone like Bill Gates? How many jobs has he created? He's made fabulous wealth but I don't begrudge him that.'
The multibillion-dollar quarterly profits of the oil industry have also sparked debate at a time of high energy prices and a search for alternative energy resources. Romney took issue with potential Democratic presidential rival Sen. Hillary Clinton of New York, and her idea of taking oil profits and using them to create an alternative energy strategy run by the federal government.
"The idea of government running anything and thinking it will do a better job than the private sector is a very bad idea indeed, and suggests a lack of understanding of how our economy works," Romney said.
Romney thinks Clinton and other liberals just don't get the economy these days. "Some of the principles that liberals have been taught over the years just don't line up with what has actually worked in our economy,” he said. “Since Ronald Reagan was president our economy has seen a remarkable record of growth."
That growth would come to a halt if the Bush tax cuts, slated to expire in 2010, are not made permanent, Romney said, likely influenced by the two advisers who worked in the White House that crafted, and continues to support, those cuts. He also believes not renewing the tax cuts could plunge the American economy into a recession.
"I can't tell you when it would cause a recession,” he said. “I can tell you over time raising taxes well above the 18% of gross domestic product-level would cause a slowdown in growth of our economy, would reduce our employment, and would reduce the wages and salaries of people in this country. It's a bad idea."
Romney stressed his support for the continuation of free trade, warning of the dangers of economic isolationism, protectionism or pulling too far out of the global marketplace, drawing upon the Soviet Union as an example of such peril. “Any economy that's tried to put barriers up to keep itself from having to compete with innovation around the world is an economy which ultimately ends up collapsing and becoming second tier," he said.
Romney’s focus on economic issues, and the economic views he expresses, could help him gain the support of fiscal conservatives, since social conservatives within the Republican party could lack enthusiasm for his bid. Many say Romney has flip-flopped his views on abortion and gay marriage since previous campaigns, like his unsuccessful Senate bid against Democratic incumbent Ted Kennedy in 1994 and his run for governor in 2002.
Romney told Kudlow his view of gay marriage has remained unchanged all along. "When I ran for office in '94 against Ted Kennedy, when I ran for office for governor I made it very clear in both races. I oppose same-sex marriage, gay marriage. There is no vacillation or change in that position at all," he said. "Marriage is relationship between man and woman. And a decision to favor gay marriage is in my opinion a bad decision and wrong way for the country to go. That hasn't changed at all."
As for abortion, Romney admitted there has been a change to a pro-life stance from a pro-choice position in earlier days. "I think I was wrong in that regard," he said. "My experience over the last several years, particularly as it's related to research going on in this country, relating to embryo and stem-cell research led me to believe that we have so cheapened the value of human life here, that it was important to indicate that I am pro-life and I've made that clear for the last couple of years."
Looking away from domestic issues and to the Middle East, Romney said President Bush and the U.S. are right to continue to try to stabilize the Iraqi government and that he supports the addition of troops in that country.
When it comes to dealing with Iranian President Mahmoud Ahmadinejad, Romney disagrees with the idea of diplomatic talks. “At this time giving the approbation of our joining him at the negotiating table, and direct talks, would send the wrong signal to the people of Iran,” he said. “What we need to do instead is pursue a policy of diplomatic isolation and tighten the economic screws in Iran.”
So far Arizona Sen. John McCain and former New York City mayor Rudy Giuliani look to be leading the Republican pack in the polls. But Romney made a splash with his January fundraising blitz, which put $6.5 million in his campaign coffers, and even had eBay CEO Meg Whitman dialing for dollars. There’s a long way to go before Iowa and New Hampshire, and an even longer path to the 2008 general election. And Romney’s not even a candidate… yet.