11/14/2012 01:25 pm ET Updated Jan 14, 2013

CEO Math

The most frequently quoted quip from election night 2012 came not from either candidate or campaign, but rather from Fox News' Megyn Kelly. As Karl Rove sputtered and fulminated when Fox's own number-crunchers called Ohio, and as he insisted that he was looking at different numbers, Kelly challenged him: "Is this just math that you do as a Republican to make yourself feel better?"

It was a perfect summation. Of the entire campaign and of the entire fact-free intellectual universe those on the right have constructed for themselves. In 2002, a Bush Administration official famously scolded journalist Ron Suskind that he and his ilk lived "in what we call the reality-based community," a scary place where people,"believe that solutions emerge from your judicious study of discernible reality." That official went on to disabuse Suskind of these silly ideas, saying "we create our own reality."

On election night we watched reality intrude on the vacuum-sealed brains of so many right-wing pundits. It was all pretty funny.

We now know that Mitt Romney also believed he was going to win the election. He jumped right into the same reinforcing feedback loop that Fox News, Charles Krauthammer and George Will had and rode it straight into the realm of historical footnote. He was serious, apparently, that he had only written a victory speech, not a concession speech.

But what makes Romney's self-delusion more interesting than those of the barkers at the Fox News Carnival is that Romney tried to sell himself as a data guy. A businessman who knew how to put the green eyeshades on and make the numbers work. During the second debate when Candy Crowley asked Romney whether his budget numbers really added up, Romney dismissed her saying, "Well of course they add up. I'm someone who ran businesses for 25 years and balanced the budget."

In the end Romney, the man who made a mint running a private equity firm and ran to be the nation's CEO-in-Chief, couldn't even accurately count to 270.

In this sense, the Romney's capacity to ignore all the data in front of him in order to make himself feel better is perfectly representative of the real cause of the Great Recession. Let's call it: "CEO Math."

CEO Math is what results after drinking an ideological Red Bull. Suitably buzzed, you then begin to do arithmetic to maximize short-term profits -- regardless of whether your math is legal, ethical, good for business in the long-term, or even whether the numbers are correct. CEO Math also permits its practitioners to ignore or denounce anything or anyone that might challenge the results. Rather than checking the figures, you just grab another Red Bull and scream louder.

Needless to say, there is no room in CEO Math to calculate what might be good for the country.

CEO Math leads to gargantuan salary and compensation packages for CEOs that are utterly disconnected from performance. Only by using CEO Math can Donald Trump, who has filed for bankruptcy more often than he has filed for divorce, be taken seriously as a Republican presidential candidate.

Using CEO Math, Jamie Dimon of JP Morgan calculated that it was a better investment of his time to crusade against the Obama Administration's attempts to regulate the financial sector than to pay attention to his own traders while they were losing upwards of 5 billion dollars.

Remember when former Fed Chairman and Ayn Rand disciple Alan Greenspan told Congress that there was no such thing as a housing bubble, even as the Fed's policies helped inflate it? Remember when Greenspan then testified before Congress that he was "shocked" that everything had gone "pop"? Fooled by CEO Math.

Recall the stories of middle-level employees at major banks and mortgage companies who knew that something smelled real bad but were either ignored or intimidated by their superiors? Victims of CEO Math.

The right-wing meltdown on election night revealed that Republicans don't understand the basic electoral map anymore, and that predictions of a 1,000-year Rovian Reich might have been premature.

But it should also make us suspicious of any Republican economic policy or pronouncement. Only by doing CEO Math can you say with a straight face that the Bush tax cuts create jobs, that 47 percent of us live off the other 53 percent, or that through some alchemical combination of closing loopholes and limiting deductions you can balance the budget without raising taxes on the wealthiest. The Paul Ryan budget is filled chock-a-block with CEO Math.

Mitt Romney lost on election night. So did Karl Rove. Let's hope CEO Math lost too -- and that we can now give the Ryan Budget the failing grade that CEO Math deserves.

Steven Conn teaches history at Ohio State University where he edits the online monthly magazine Origins: Current Events in Historical Perspective. He also edited the new book To Promote the General Welfare: The Case for Big Government (Oxford University Press).