Santorum Picks Own ‘Winners and Losers’ Even as He Chides Obama

Republican presidential candidate Rick Santorum says he doesn’t believe the U.S. government should pick the economy’s “winners and losers.”

Except for manufacturers. And small businesses. And families.

Speaking in Detroit, the former Pennsylvania senator sketched a plan he said would balance the federal budget in five years, including rolling back non-defense spending on many programs to 2008 levels, while rejuvenating the good-paying factory jobs that once characterized the Motor City.

“We do need a strong economic platform to help the private sector compete,” he said in a luncheon speech yesterday to the Detroit Economic Club before the Feb. 28 Michigan primary.

As Santorum campaigns in the industrial heartland, he proposes eliminating the corporate income tax for manufacturers and halving the 35 percent rate for other companies. Even some Republican-leaning economists were skeptical about extending special help to one area of the economy such as manufacturing.

“It’s a bad idea to single out a particular sector that way,” said Alan Viard, a former economist in President George W. Bush’s administration who is now a scholar at the American Enterprise Institute in Washington. “Economists assume that, under normal conditions, markets will allocate resources efficiently,” he added. “So the tax system should be neutral.”

Vision for Future

Santorum, 53, says the help is needed to reverse the long- running erosion in manufacturing employment and buttress stable communities.

“This is an economic vision that doesn’t go back, but goes forward,” he said. “We’ll put America back to work.”

Although manufacturers have added 404,000 jobs since January 2010, there are still 5.5 million fewer factory jobs today than in July 2000. Yet manufacturing output is 2.2 percent greater today, according to the U.S. Federal Reserve.

Economists say the job losses are the result of more intense worldwide competition following the end of the Cold War and higher productivity because of automation.

“We can’t go overboard in thinking we can go back to the middle-class manufacturing jobs we had in the ‘50s and ‘60s when we didn’t have the global competition we have now,” said Jeffrey Bergstrand, a finance professor at the University of Notre Dame and a former Federal Reserve Bank of Boston economist.

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