Republicans Talk Business in Michigan

The GOP's White House hopefuls met for their latest televised debate in a state that epitomizes America's struggling economy

As the Republican presidential candidates gathered Wednesday in Michigan, the day's market slide - the Dow Jones closing down 389 points - offered a sharp reminder of the local economic backdrop.

General Motors stock fell nearly 11 percent during the day. Ford Motor Company dropped almost 5 percent. Expect plenty of blame for the plight of industrial America to land tonight on President Obama.

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It's the first time the Republican candidates have met since Oct. 18 in Las Vegas, a debate memorable for the testy exchange between Rick Perry and Mitt Romney over Romney's extended employment of a landscaping firm that employed illegal immigrants. Since, Perry has launched ads in Iowa but failed to recover significantly in the polls, and allegations of sexual harassment against Herman Cain have dominated political news for the last 10 days.

Cain got the first question but it was about the economy. Moderator Maria Bartiromo set the stage, asked about the Italian debt crisis and potential repercussions on the U.S.

Michigan Nice

The bellicosity of the last Republican presidential debate, three weeks ago in Las Vegas appears to have given way to a much more congenial session in Michigan. Gone are the acrid exchanges between candidates, replaced with statements of agreement on policy. No shoulder touches, either. If the emotional quotient injected into the race by the sexual harassment allegations against Herman Cain has altered anything among the candidates, it appears to have provided a caution flag against combustibility. Rick Santorum lightly dinged Mitt Romney over the latter's Massachusetts health care law, but other than the only tension during the debate's first 75 minutes erupted between the candidates and their reporter questioners.

Perry: "Oops"

In what might go down as one of the more embarrassing moments in presidential campaign history, Rick Perry cemented his reputation as a poor debater when he blanked about one of the three federal departments he wants to slash.

The Texas governor began by naming the Commerce Department and the Department of Education, but he stopped there.

"What's the third one there?" he asked, gazing at fellow Texan, Rep. Ron Paul.

Paul, standing next to him, appeared to suggest the Environment Protection Agency. But moderator John Harwood intervened.

"You can't name the third one?" Hardwood asked.

"I can't remember ..." he said. "I can't, the third one, I can't."

"Oops."

On his next turn speaking, Perry offered: "By the way, that was the Department of Energy I was reaching for." Hmm. The governor of Texas forgets energy?

Poor debate performances are credited with sinking Perry's campaign after he initially soared in the polls, but Tuesday's gaffe was his worst.

Cain on sexual harassment

At the outset of the debate, Bartiromo promised that it would focus "almost exclusively" on the economy. The inevitable detour, which came less than 30 minutes into the debate, prompted boos from the audience. When she asked Herman Cain about the sexual harassment charges against him, the embattled candidate reiterated his denials.

"The American people deserve better than someone being tried in court of public opinion based on unfounded accusations," said Cain, responding to a question over whether voters should support him after four women have accused him of sexual harassment.

"I valued my character and my integrity more than anything else," he added. "And for everyone one person that comes forward with false accusations, there are thousands who say none of that sort of action came from Herman Cain."

It was a characteristic Cain response since the news of the scandal broke last week - total refutation of any wrongdoing while calling his accusers liars. And the crowd seemed to support him. They cheered wildly after his responses.

Cain got an assist from Romney, kind of. Asked whether he would fire Cain, Romney stuttered before cat-calls from the audience rained on stage. He then said it would be up to the American people to make that judgment - not him.

Romney on the spot

Moderator John Harwood hit Romney head-on with the central question of Romney's campaign: whether Romney's political positions are rooted in something more deeply than electoral convenience. His initial question was of Romney's seeming flip-flop over the auto industry's plight, from imploring Washington to get involved, to penning a famous op-ed entitled, "Let Detroit Go Bankrupt," after the 2008 election, to later appearing to soft-pedal that approach.

Romney pivoted to his upbringing in Michigan, where his father was governor, then reiterated criticism of government intervention in the automakers' plight. "It was the wrong way to go. I said from the very beginning they should go through a managed bankruptcy process, a private bankruptcy process," Romney said, adding, "My plan, we would have had a private-sector bailout, with a private-sector restructuring ... as opposed to government playing its heavy hand."

Harwood followed up, calling Romney's apparent ideological flexibility "an issue of character." Romney replied, "I think people understand I'm a man of steadiness and constancy." As evdence, he cited the fact he has been married to the same women for 42 years and belonged to the same church - the Mormon church - his entire life, and worked for the same company, Bain Capital, for 25 years.

China

Romney's aggressive stand toward China - proposing to brand the nation a currency a manipulator and hitting it with tariffs on imports subsidized by the manipulated yuan - drew a pandering charge from Huntsman, who earlier this year completed a tour as the U.S. ambassador to Beijing.

"China is, on almost every dimension, cheating. We've got to recognize that," Romney said, addressing one of the policy stances that distinguishes him from the field and prompts uneasiness in business circles.

Huntsman warned of "a trade war" with dueling tariffs. "You can throw out applause lines ... I've said it before that I think that policy is one of simply pandering," Huntsman said. Romney pivoted to his private-sector experience, saying, "I understand free trade, I like free trade ... But I've also seen predatory pricing."

Housing

The candidates' answers to questions about housing policy revealed two things: first, the universal antipathy toward government involvement in the economy, regardless of the size of the problem. All of the Republican hopefuls bristled at the idea of government intervention, embodied in the twin GOP hobgoblins of the Dodd-Frank financial regulation law and the Fannie Mae/Freddie Mac complex. If Dodd-Frank were repealed, Newt Gingrich said, "You'd see the housing market start to improve overnight. Dodd-Frank kills small banks, it kills small business."When CNBC reporter Steve Liesman pressed Romney on his stated belief that the prudent route on housing was to allow struggling homeowners go into foreclosure at the mercy of the market, Romney replied, "And exactly what would you do instead ... have the federal government go out and buy all the homes in America?"

Secondly, the candidates answers to the housing questions underscored their dedicated adherence to the "jobs, jobs, jobs" mantra. Rick Perry in answer to a question on housing: "We have put policies into place that follow my plan to get America back working again." Then he launched an attack on the regulatory system. Romney, too, sounded a similar approach, arguing that reducing government burdens on business would lead to housing recovery: "You have to let the market work and get people in homes again, and the best way for that to happen is to let the economy reboot."

Health care

It's obvious all the candidates want to repeal President Obama's health care bill. So what do they want to replace it with?

Posed with that question, all eight candidates on stage responded similarly, saying they would introduce more market forces to the health care return many responsibilities to the state. They were standard talking GOP talking points, and no one offered anything new. Romney joked that he would take a page out of Ron Paul's book. "I don't always say that; I'll say it now," he said, drawing laughs. "You have to let health care start working more for the market."

The former Bay State governor said he wants to allow individuals to buy health insurance on their own, and enact sweeping medical malpractice reform - both standard GOP platforms.

On Medicare, Rick Perry said he would give people a "menu of options" to choose from - although he didn't specify what those would be. Unlike Romney, who last week embraced partially privatizing Medicare, the Texas governor has yet to embrace any specific reform on the popular entitlement program.

Cain opted for a zinger instead of outlining a detailed health care plan. He said the House already has a bill that should replace "Obamacare," but said "Princes Nancy," a derisive reference to House Minority Leader Nancy Pelosi, buried it in committee.

Newt v. the Press

Newt Gingrich's strong debate performances have helped him creep back into the Republican presidential race. One exchange with the moderator Bartiromo exemplified why.

Given 30 seconds to outline what he would replace the Democratic health care bill with, the ex-House speaker mocked the question.

"Well, I just want point out, my colleagues have done a terrific job of answering an absurd question," he said, delighting the crowd. "To say in 30 seconds ..."

Bartiromo, visibly perturbed, shot back, "You have said you want to repeal 'Obama-care,' correct?"

The two went back and forth for another minute, before Gingrich finally said he would strengthen the doctor-patient relationship. But among Republicans at least, Gingrich had already won. He's thrilled GOP voters because of his responses, but for mocking the question asked in the first place. His derision is seen as sticking to a media most conservatives love to hate.

Huntsman resurfaces

He speaks! Jon Huntsman, who skipped the last debate, gave his first response in a presidential forum in weeks - and it was a by-the-numbers conservative talking point. The former Utah governor, asked if he would bail out Italy's deteriorating economy, pivoted to a criticism of America's "too big to fail" banks.

"As long as we have banks 'too big to fail' in this country, we're going to catch the contagion, and it's going to hurt us," he said.

The United States will soon look like Italy if it doesn't cure its own debt problems, he added.

None of the candidates, Mitt Romney included, indicated any support for bailing out Italy.

Image credit: Mark Blinch/Reuters