Posted by Shyam Moondra
We are witnessing a unique period in history which is full of political anomalies. Recent opinion polls show that President Barack Obama may win re-election in November by a whisker, which is extraordinary because in modern times an incumbent president with an approval rating of under 50% and with unemployment rate hovering over 8% has never been re-elected. We have a Congress with an approval rating of just 9%, the lowest on record, and yet the voters keep sending their incumbent Senators and Representatives back to the “Do nothing” Congress. Finally, we have the voters who seem to be conflicted between their desires to not give an absolute power to any single Party, which invariably leads to corruption and ideological domination, and to avoid a divided government that can’t seem to get any thing done. The 2012 presidential and congressional elections would be pivotal for determining whether we continue to have a political stalemate or we have a government which is capable of addressing the critical issues of jobs and economy. The Shakespeare quote “We know what we are, but not what we may be” seems to adequately describe the current uncertain political situation.
Imperfect Presidential Candidates
President Barack Obama, the Democrat incumbent, has many good qualities but he is somewhat handicapped by the slow economic recovery. Governor Mitt Romney, the Republican challenger, seems to suffer from a wide range of negatives that far outnumber his positives. Below is a cheat sheet on how the two candidates fare in terms of their strengths and weaknesses.
Positives for Obama:
Obama is likable, honest, intelligent, excellent communicator, and a decent family man. First Lady Michelle Obama, a very popular figure in her own right, is Obama’s strong asset. Obama understands public policy issues well and he tends to think strategically. He has strong convictions about protecting the interests of low-income and middle-class families that he believes lost ground during the last decade. His staunch support for the people at the lower economic strata, that account for 70% of all consumer-spending and thus are the backbone of our economy, earns him overwhelming grass-root support.
In spite of slow economic recovery, Obama has an impressive overall record. He inherited a troubled economy from former President George W. Bush, who left a national debt of $10 trillion, budget deficit of over $1 trillion, two on-going unpopular and expensive wars, a major financial crisis, and severe recession (2.6 million jobs lost during the final year of the Bush presidency). Bush gave away unnecessary income tax cuts to the rich and tax breaks to oil companies and rich farmers, authorized to spend $700 billion for bank bailouts, and spent $1 trillion on two wars. That was a plateful for the incoming new president. Obama methodically wound down the war in Iraq and is in the process of doing the same in Afghanistan. He pushed for bank and auto industry bailouts and stimulus spending on infrastructure that helped save or create over four million jobs and revitalize economy. Obama persistently pushed for rescinding the Bush tax cuts for the rich who haven’t paid their fair share of taxes in the last ten years. Obama managed to get his universal health care plan passed by the Democrat controlled Congress, a feat that no other president could achieve before him.
Obama brilliantly used high-tech weapons (such as unmanned drones and stealth helicopters) and Special Forces to kill or capture high-value targets of Al Qaeda including Osama bin Laden, who eluded Bush for years. Obama ordered initial bombing in Libya and then let allies finish the job and shine in glory in helping Libyans achieve freedom from tyranny. Obama leveraged our close military-to-military relationship with Egypt to help Egyptians achieve their freedom without bloodshed. Obama’s persistent diplomacy (backed up by cyber warfare and threat of military action) led to crippling sanctions on Iran on the issue of Iran’s nuclear program that brought Iran to the negotiating table. Obama’s low-key approach to foreign policy, impressively executed by Secretary of State Hillary Clinton, helped repair the U.S. image around the world which was badly damaged during the Bush years.
Negatives for Obama:
On the negative side, Obama is often perceived as anti-business and he seems to have socialist tendencies. Obama has been tirelessly pushing to help poor people in these tough times (per recent Census report, the percentage of Americans living below the poverty line of $22,314 is now 15.1 percent or 45 million, the highest since 1993) through increased food stamp and other welfare programs. However, in the process, he may be unwittingly resurrecting a welfare state that President Bill Clinton methodically dismantled during his two terms. If extended to the extreme, this transformation towards a welfare state may ultimately lead us to the same situation as Greece is in today, albeit in slow motion. Obama’s emphasis on using tax dollars to solve social ills, as opposed to letting the free-market economy do it, poses a big danger for the long-term because it creates a population that heavily relies on the government help rather than become self-sufficient and self-reliant. Also, Obama suffers from a personality flaw – he is unable to forge partnerships with the opposition in Congress in the mode of President Ronald Reagan, who was able to use his charm on Democratic Speaker of the House Tip O’Neil to push through his agenda. Obama wanted to do a few things that would have helped the economy (e.g., more stimulus spending and aid to the states), but he simply couldn’t break through the gridlock in the Congress. While the people blame mostly Republicans for causing the gridlock, they also partially blame Obama for not being able to develop close working relationships with the Republican leaders in the Congress. Obama tends to be aloof and his lack of solid hands-on leadership skills makes him somewhat ineffective in managing the national affairs.
Positives for Romney:
Romney is a decent family man, articulate, and wealthy. He has good business connections, here and abroad, that are helping him raise huge campaign contributions, but he lacks grass-root support. By all accounts, he is a competent and effective manager. His experience as the Governor of Massachusetts could also be viewed as positive, even though Romney has largely abstained from talking about it on the campaign trail perhaps because many of his policies there had more similarities rather than dissimilarities with those of Obama, especially in the area of health care.
Negatives for Romney:
Romney’s biggest liability is that he is unable to connect with the ordinary people. His mannerism and attitudes make him look out of touch. During one of the Republican primary debates, he offered Governor Rick Perry a wager of $10,000 on a political point, which shows that he is far removed from the day-to-day struggles of the common people. Romney lacks convictions and vision. It’s as if he wants to become president just to see his family name go in the history books, something that his father couldn’t do. He hasn’t shown passion or strong conviction for any particular issue that would propel him to enter the presidential race, in the mode of Reagan, who strongly believed that big government was bad and the former Soviet Union was an evil empire. Romney’s tendency to change his positions on issues is so legendary that he has rightfully earned the nick-name “flip-flopper.” His constant flip-flopping proves that he has no personal convictions on issues that matter so deeply to his supporters (e.g., abortion). This also makes it difficult for the people to trust him.
Lack of detailed plans on how he would create jobs makes him not at all credible. Romney’s slogan “reduce taxes and cut spending” is a familiar Republican mantra – Bush tried this “trickle down economics” but it didn’t work. In any case, if he won and if after the November elections the Congress were still divided, he would have the same difficulty in getting his tax plan through the Congress as Obama does. Romney says he would cut taxes and to recover the lost revenues he will eliminate certain deductions and tax subsidies without specifying which ones. That’s like walking through a minefield; it’s easier said than done. The independent think-tank, Tax Policy Center, did a detailed analysis of Romney’s tax proposals and concluded that his proposed tax cuts would boost after-tax income by an average of 4.1 percent for those earning more than $1 million a year, while reducing after-tax income by an average of 1.2 percent for individuals earning less than $200,000 (or about 95% of the taxpayers). It’s clear that Romney is more concerned about the rich rather than the distressed low-income and middle-class families whose support is critical for him to prevail in November. Romney says that he would repeal Obamacare but he has said nothing about what he will replace it with. In a nutshell, Romney has not really spelled out exactly how he will make things better for the ordinary folks and, therefore, he presents no compelling reasons for these 98% of the disadvantaged people to vote for him.
Romney’s murky personal finances are a major liability; for ordinary people, it’s hard to understand his secret overseas bank accounts and $100 million IRA. His refusal to release his past tax returns raises the suspicion that he probably paid no or very little income taxes. Senate Majority Leader Harry Reid (D) has said that someone who worked at Bain Capital (without naming his source) told him that Romney paid no taxes for ten years. This is a thorny issue for most voters. How can anyone vote for a tax dodger and put him in the White House? Romney must release his tax returns for the last ten years and explain his murky finances including his secret bank accounts in tax havens. In modern times, all presidential candidates have released their past tax returns for at least ten years, so Romney’s refusal to do so is very irritating to millions of voters. His role at the private equity firm Bain Capital, where he made his fortune by outsourcing jobs to China, India, and Mexico, is another nagging issue for the voters, especially for the Independents.
Romney’s comments on China and Russia seem naive and dangerous. His inexperience in foreign affairs was also evident during his recent visit to London where he publicly expressed doubts if London was ready for Olympic Games, which led to a direct rebuke from Prime Minister David Cameron and which produced nasty headlines in the U.K. press. He quickly flipped and tried to calm the waters by saying that Games would be successful. His public disclosure that he met with the top spy of MI-6 raised eyebrows in the intelligence circles. During his recent trip to Israel, his negative comments about Palestinians drew sharp condemnation from the Arab leaders and some countries even expressed fears that if Romney won, he would destabilize the region and make the world less peaceful. Romney's statement that if he became president, he will move the U.S. embassy from Tel Aviv to Jerusalem was provocative; he was clearly angling to win some Jewish votes in November. This statement, however, directly contradicted the long-standing policy of the U.S. under Republican and Democrat presidents that stipulates that the final status of Jerusalem were to be negotiated by Israelis and Palestinians. Romney proved beyond doubt that he is not ready to occupy the most powerful office in the world.
Romney was the Governor of Massachusetts, but he rarely talks about his tenure there. This makes one wonder if his record in Massachusetts was too liberal for hard-core conservative Republicans or if his policies there were too similar to those of Obama, especially in the area of health care. Romney pioneered health care reforms in Massachusetts that became a blueprint for Obama’s health care bill, and yet Romney has been very critical of Obamacare that he wants to repeal if he is elected as the president.
For many conservatives, Romney is not conservative enough. Also, Romney’s Mormon faith is a big turn off for some evangelicals. This shows that, within the Republican rank-and-file, the support for Romney’s candidacy is not enthusiastic enough to prompt a huge turnout on the election day. Romney is unlikely to get much support from large minority voter blocks such as Blacks and Hispanics. At a recent NAACP gathering, Romney was booed by the audience. His tough talk on immigration has neither pleased conservative Republicans nor helped him gain any support among the Hispanics. Romney's support among yet another influential group of voters, the women, is lagging far behind that of Obama.
The negatives for Romney are so many and so troubling, it’s like a miracle how well he is doing in the polls so far (losing to Obama by only 4-6%). All in all, Romney is an unattractive and unexciting candidate who is unlikely to win in November.
Disastrous Congressional Leaders
The current 112th U.S. Congress has an approval rating of only 9%, which is the lowest ever. This Congress has been often referred to as “Do nothing” Congress because of its failure to address the major issues related to economy and jobs. In other countries, this level of approval rating would amount to no-confidence in the government and the leaders would resign, forcing new elections. However, the American people are stuck with the present Congressional leadership at least until the November elections.
The current Congressional leaders, especially on the Republican side, are staunchly partisan and they are primarily responsible for the gridlock which has made it impossible for the Congress to compromise and move forward. There are many serious problems that need to be addressed, e.g., economy and jobs, tax reforms, debt/deficit, immigration reforms, campaign contribution and corruption, and declining education, and yet Republicans, influenced by their Tea Party comrades, are making it impossible to solve any of these problems. Their “my way or highway” attitude is incompatible with the basic underlying principle of democracy which is to find common ground. For example, Obama and House Speaker John Boehner (R) hammered out a grand plan for reducing deficit by $4.5 trillion over ten years, which was thrilling and well received by the financial markets, but it was torpedoed by the Tea Party extremists within the Republican Party.
The American people agree wholeheartedly with Obama on many key issues and yet the Congressional Republicans are creating obstacles in moving forward on those issues. For example, a vast majority of Americans believe, like Obama does, that the rich people and corporations are not paying their fair share of taxes and yet Republicans are pushing for more tax cuts for them. It’s very wrong when rich people like Romney and Warren Buffett pay so little in taxes or when companies like GE, Google and Goldman Sachs pay only 0 to 10% in taxes. Clearly, the tax code has too many loopholes that make it possible for the rich people and multinational companies to not pay their fair share of taxes.
On the issue of increasing the debt ceiling, the people were shocked to see how badly Republicans behaved in the Congress. Some of them even openly advocated that the federal government should default on its debt. Those kinds of extreme tactics were not well received by the people and the financial markets. The voters largely blame Republicans for the U.S. securities being downgraded by Standard & Poor from AAA to AA+ rating, the first ever in our history. It’s very likely that the voters would punish Republicans, especially the Tea Partiers, for their bad behavior and throw them out of office in November. There is a slight chance Democrats may re-capture the House, paving the way for a more normal functioning Congress.
A 9% approval rating for the Congress makes it the weakest link in the government and it diminishes the Congress as an institution. A small minority of extremists are holding the country as a hostage, violating their commitment to fight for the well being of their constituents. It would be in the best interest of the country and its people, if Harry Reid, Mitch McConnell, John Boehner, Erick Cantor, and Nancy Pelosi would accept responsibility for poor rating and resign on moral ground to preserve the integrity of the institution. We desperately need new leaders, who would be more willing to compromise and put the country’s interests ahead of their own and their Party’s interests.
What would voters do in November?
Most opinion polls indicate that the upcoming election will be close. While Obama may have a slight edge at the moment, the voter sentiment is still evolving. They feel that Obama will do more for the middle class and Romney would be good for the rich people. While voters understand that Obama was handed a plateful of problems by his predecessor Bush and that the divided Congress made it difficult for Obama to do what needed to be done for growth and job creation (e.g., more stimulus spending), they are nevertheless disappointed at the results with unemployment remaining chronically high at 8.3%. By and large, voters agree with Obama on increasing taxes for the rich and closing the tax loopholes. The voters are, in general, skeptical of Romney’s proposed cuts in taxes and spending. Just as Obama failed to deal with the divided Congress, the voters doubt Romney will fare any better in pushing through his conservative agenda. In the end, the voters might just go with Obama, a known quantity, rather than try an untested Romney, who during his recent foreign trip committed several gaffes and seemed not ready for the top job. Obama, who is currently ahead in the polls by a slim margin, is likely to gain strength as November approaches, especially after the presidential debates in October, and would eventually win the election by a comfortable margin.
As to the Congressional elections, the voters, who overwhelmingly disapprove the job the present Congress is doing, are likely to play a more decisive role this time around. Democrats would likely strengthen their position in both houses of Congress. The voters dislike gridlock and they mostly blame Republicans for causing it. While they give very low marks to Congress as an institution, paradoxically, in the past they have continued to re-elect their incumbent Senators and district Representatives. But that might change in November. Having seen the disastrous results from the divided government they elected last time, this time they could be more decisive and send a clear message to Republicans and their Tea Party partners that a normal functioning government is much more important than worrying about ideological domination. Some of the extreme Tea Party members may not come back in the next Congress, which will help partially restore bi-partisanship and move the country forward in a cooperative way. The Democrats are expected to keep the control of the Senate; they might even increase their majority by a few seats. There is a slight chance that Democrats might regain the control of the House as well; at a minimum, Democrats could gain enough seats to make Republicans in the House more amenable to compromise and take constructive actions on jobs, tax reforms, and budget deficit. The voters are mindful of the fact that a status quo on the political scene will be a big negative for the financial markets and economy. It will not inspire confidence in the corporate world, which will hamper capital investment and job creation. We could also see a long-term damage to our global economic power and declining living standard for years to come.
If there is a clean sweep (taking over all three, the White House, Senate, and House of Representatives) by either Democrats (slightly likely) or Republicans (very unlikely), the country will move in some direction, right or wrong. It’s a trial-and-error thing; we always have the next election cycle to make any adjustments. Hopefully, we will get it right eventually.
