Karl has requested that, along with a few other people, I answer this question:

What are the significant differences that you think we could actually see come to pass from a Romney Presidency versus an Obama Presidency?

Here are Tyler CowenKevin Drum, and Matt Yglesias. They all say a lot of believable things. I’m probably my least useful in this type of speculation, but here goes anyway. In a lot of points below I’m going to take the cowards way out and make a bunch of arguments I’m not necessarily going to stand behind, but that could plausibly be argued for.

One thing I’m pretty confident in is that if we’ve arrived at Obama vs Romney, and I think we have, then we’ve already dodged the biggest bullets (you know who I mean). So I think Karl is right to ask this question, as the answer is neither as dramatic or obvious as it could be if some of the other GOP contenders had gotten lucky.

If we’ve passed through the better part of the recession by the time the election is over, one could imagine attention will turn to tax reform. I can see either supporting something like Simpson Bowles, but Romney relying somewhat more on changes in the social security formula and removing exemptions, where Obama would lean somewhat more on increases in top marginal tax rates and some new taxes. I don’t think that the differences here would be huge overall, especially given the range of what could be done, but small differences can be pretty consequential in terms of welfare when you are talking about a multi-trillion dollar economy, so I don’t want to overly minimize these differences.

But whoever wins, I am looking forward to the end of Obama’s first term. I’ve come to believe that Obama’s biggest mistake might have been winning the election as resoundingly as he did. Republican’s came out of the election with a president who had mobilized the youth and won over a lot of independents.  He was going to gain more from their mutual success if they worked together, and he was going to lose more from their mutual failure if they didn’t work together. Rationally then, many Republicans’ top priority in the past four years has been to make Obama a one term president. One could argue that if Obama wins, especially if it is a tight race, this dynamic will change once the possibility of one-terming is gone. Or he’ll lose and I just don’t see Democrats having the same resistance to working with Romney.

If Romney wins I suspect he won’t have to give very much to the base for the very same reason that Obama’s first term has been such a struggle: what Republicans want most is for Obama to be a one-term president. In achieving this Romney will already have delivered a large chunk of what the base wants. This could conceivably grant him some sway. He’s probably a moderate technocratic conservative, so maybe that’s how he’ll govern, but who knows.

I’m hopeful that once the recovery gets fully underway political cooperation will be easier regardless of who is president. I don’t think most voters actually understand the recession, and without a clear real answer they grapple naturally for whatever answer is most satisfying, and partisan explanations are most satisfying, which naturally leads to polarization. Of course if Tyler is right and we are in the middle of a Great Stagnation, then I don’t think we’ll be out of the political stagnation anytime soon. Let us home Smithianism carries the day.

One possible problem with Romney is that he can’t win under circumstances which he could govern under effectively. The conventional wisdom is that the economy will be determinative in the election.  To oversimplify the issue: if the economy is weak, Romney will win. If it’s strong, Obama will win. But while I think Romney will have the political freedom to deal effectively with a recovering economy with long-term structural problems,what tools will he have to deal with an ongoing balance sheet recession? Does he have a plan to stimulate the housing market?  To increase inflation? He’ll have won on some pretty strong anti-immigration rhetoric, so a large amount of immigration as stimulus seems unlikely. What will he be able to do? If I’m right he will have some sway, but I don’t think much of it in the direction he would need it here.

One of the ways I think about elections is to ask “what will the victory do to voters?” One could argue that one of the benefits of Obama winning in ’08 was the salutary disillusionment of liberals on the power of a strong president relative to what they’d be thinking at this point had McCain won.   A democrat win risks undoing the hard earned disillusionment. (“Rocking the vote” is a tragedy. The central limit theorem does not apply to voting, in fact something like the opposite is true. More voters means more people paying attention means more populist governance.) On the other hand, a republican win in 2012 followed by a recovery could solidify the unhealthy myth that this is Obama’s recession if Romney happens to ride in at just the right time in the recovery. This part about how people will react to either win is hard to predict but important.