Giving us another example of what happens when you mix ego and poor primary performance, the major story going into the South Carolina primary is the new line of attack being employed by Newt Gingrich and Rick Perry on Mitt Romney. Failing to win over voters by attacking Romney’s record as governor, the pair has turned their sights on Romney the CEO. While Rick Perry has introduced us to “Vulture Capitalism”, Gingrich is employing a 22-minute film criticizing Mitt’s time at Bain Capital, depicting Romney as “worse than the evil banker in “It’s a Wonderful Life.””

This approach has appeared to backfire with the conservative base.

Though their critiques on Bain Capital seem more appropriate coming from Chicago, Perry and Gingrich’s underlying instincts are correct. The primary, insofar that it is a referendum on the establishment-favorite, has little to do with Governor Romney, whose only real noteworthy achievement is the despised Romneycare. No, the candidacy of Mitt Romney is based entirely on his history in the private sector. It is his success as a CEO that allows him to claim he is the one candidate who understands “the real economy”.

Unfortunately for the country, Romney’s economic literacy is the biggest myth of the primary.

It would be too easy to highlight the fact that Romney subscribes to the same flawed belief that “fair and affordable housing should be a right, not a privilege,” a major contributor to the environment that created the disastrous housing bubble (after all, he said that as Governor, and Candidate Romney is nothing like Governor Romney). Instead, let’s take a look at one of Candidate Romney’s favorite topics: China.

If you have tuned in to any of the GOP debates, you should already know that he is not a big fan. On the subject of trade policy, his website highlights a plan on “Confronting China,” including the aggressive action of labeling the pseudo-Communist nation as “currency manipulators.” He goes on to criticize the Obama Administration’s “acquiescence to the one-way arrangements the Chinese have come to enjoy.” America, he believes, must be we must be “willing to say “no more” to a relationship that too often benefits them and harms us.” To anyone who would argue that there are benefits to our current relationship with the Asian power, you are being “played like a fiddle.”

As such, it is interesting that one of his top economic advisers is Harvard professor Greg Mankiw.

In 2009, Mankiw took to the New York Times to criticize the Obama Administration for threatening much of the same policy his candidate now advocates. In what would be a fitting response to Romney’s accusation of “cheating”, Mankiw writes:

“Like many economists, I cringe whenever I hear the term “fair trade.” It is not that I am against fairness — who is? — but the word “fair” is so amorphous in this context as to defy definition. Most often, the slogan “fair trade” is little more than a rallying cry for protectionism.”

Protectionism? From the man who believes he is the only one who can save capitalism from Barack Obama? Adam Smith is rolling in his grave.

But what of China’s “currency manipulation” Professor Mankiw?

“Perhaps the oddest thing about [the criticism of currency manipulation] is that [the] complaint seems out of date. The yuan-dollar exchange rate has moved considerably in recent years. After a long period of completely fixing the exchange rate, China allowed its currency to start moving in July 2005. Since then, it has appreciated by 21 percent.” (Since this article was written in 2009, it is worth noting the information is not out of date. The Chiense yuan hit an 18-year high in April of 2011.)

So according to Romney’s own expect, his major claim against China is a complete fabrication.

A cynic may argue that Romney doesn’t believe any of the baloney he preaches about China. That he is using our economic rival as a scapegoat for a public looking for someone to blame for their economic pain. This would contradict a POLITICO report that “Romney is dead serious about…putting new tariffs on Chinese imports,” but information from unnamed insiders isn’t always reliable.

So we must conclude that either Romney doesn’t fully understand the trade policy he advocates, or Romney is a demagogue not above misleading the American people to win an election. Sadly even the latter explanation doesn’t defend the governor from Mankiw’s criticism:

“Directing attention to the China currency issue amid a worldwide recession and growing fears of depression is more than a distraction. It is downright counterproductive.”

If we are to brand Romney an economic expert because of his success in the private sector, how does the GOP defend itself from the criticism of Warren Buffet? Or Bill Gates? Being a good President is different than being a savvy CEO. The failure of Romney’s opponents to credibly attack Romney’s credentials in the economy is the reason Romney’s candidacy has the strength it does today. Interestingly, the candidate who is criticized for “crank economic theory”, almost as frequently as Romney is praised for his understanding, is the only one in the GOP field who identified the housing bubble years before it crippled the US economy – Ron Paul.