Presidential Campaign 2012: Selling The People Short

What a miserable election season this has been.  The current adolescent school-yard brawl masquerading as a presidential election makes us pine for former contender Newt Gingrich’s naïve proposal to have a series of seven, three-hour-long, mind-numbing Lincoln-Douglas type debates with no moderators and only a timekeeper.  Both Romney and Obama  have been selling the American people short.

Perhaps, the selection of Paul Ryan as Mitt Romney’s running mate will force President Obama seriously to discuss the economy, something he has been loath to do. The Romney campaign, so far, is betting that the sorry state of the economy and the Administration’s pathetic response to it will beat Obama.  Romney’s strategy has been to stay out of the way by not saying much of substance at which the President’s Chicago-based strategists can fire endless rounds of deceptive, diversionary flak. It’s a very risky strategy that could quickly crumble in the face of the unrelenting, class-warfare campaign President Obama is waging.

There is a disquieting unease throughout the country, which the President is determined to tap into.  The people, regardless of what they personally think of President Obama, know his economic policies have failed. The Business Cycle Dating Committee of the National Bureau of Economic Research has determined that the recession that began in December of 2007 ended in June of 2009, about sixteen weeks after President Obama assumed office.  The unemployment rate was 7.8% when Obama assumed office.  It quickly migrated as high as 10% and has, for 42 months, never been under 8%.  The White House has, of course, trumpeted that 163,000 jobs were created in July, but was silent on the fact that the same jobs report revealed that 195,000 fewer people had jobs in July than in the previous month.  The jobs creation statistic totally masks the number of people who simply dropped out of the jobs market (150,000 in July) or the new job seekers who enter the market each month (about 200,000).  The tripling of the debt and the successive Obama years of trillion dollar deficits has done nothing to energize the most anemic recovery in history.  So, having little positive on which to campaign, the President is spending his campaign capital, essentially, calling Romney names.

Romney has, thus far, run his campaign on generalities offering vague and somewhat broad assurances of a vigorous recovery if he is elected.  He, in fact, has published a lengthy and detailed economic plan, closely modeled after Simpson Bowles, which we believe would represent an enormous improvement over the Keynesian redistributive mentality of the President.  But vague and broad assurances are not inspiring to an electorate desperate to see more and brighter light at the end of this long, dark tunnel in which the nation finds itself. Romney now must demonstrate in his many campaign addresses why his detailed plan will increase economic activity and create more jobs than the Obama plan, rather than merely claiming that his plan is superior.  Paul Ryan, hopefully, will help focus attention where it belongs – on our weak economy and the President’s economic plans, which will only exacerbate our current malaise.

Obama, on the other hand, believes he can crush Romney with smooth-talking, self-assured, pseudo-authoritative nonsense.  His has been the most unpresidential campaign in memory.  He plays less to “Hail to the Chief” and much more to “Seventy-Six Trombones,” and, like the charismatic, smooth talking, Professor Harold Hill, he might just succeed.  Meanwhile, his Super PACs and his Senate Majority Leader, Harry Reid, lift the manhole covers of the political sewer to accuse Romney of causing a woman’s death from cancer and not paying any taxes for ten years.

Romney has let a non-issue (his tax returns) become an albatross around his neck.  He should have used his own tax returns way back in the primary season as a teaching moment to explain why he supports a Simpson-Bowles type of tax reform that would (1) do away with all but two tax preferences, (2) lower tax rates for all tax-paying Americans while (3) growing the economy (and tax revenues).  He could have demonstrated how, under Simpson Bowles, his own taxes would be considerably higher.

The only relevant issue regarding tax returns should be tax skullduggery (think former Democratic Chairman of the House Ways and Means Committee, Charlie Rangel), and that certainly isn’t an issue with Romney.  The Romney tax return brouhaha simply presumes he has availed himself of the wide assortment of tax preferences that allow (indeed encourage) engagement in certain business and investment activity (here and abroad), investment in capital and plant improvements and contributions to so-called 301 (c) philanthropies.  These tax laws allow taxpayers like Mitt Romney, Warren Buffett and many others who derive most of their income from investments in the economy to pay their taxes predicated on lower tax rates than the rates levied for ordinary earned income. Romney’s returns have become a cute political issue.  It is another Obama grand campaign diversion, but it is one Governor Romney has brought upon himself by not proactively dealing with it many months ago.

Most non-partisan economists and non hard-left politicians know that raising taxes on anyone during a weak economy makes no sense.  Even Bill Clinton, in an unguarded moment, acknowledged in a recent television interview that he wouldn’t raise taxes on anyone in this economy. Indeed, President Obama, essentially, said the same thing two years ago when he supported extending the so-called Bush tax cuts because of the country’s stubborn economic malaise.  So what’s different now?  Well, two things.  First, we have an election in less than 90 days. Second, the President’s polls show that a majority of voters (half of whom currently pay no federal income taxes whatsoever, and many of whom actually receive tax refunds even though they didn’t pay any federal income taxes) rather like the idea of raising taxes on those whom they regard as wealthy.

Then there is the Obama attack on Romney as “a pioneer of outsourcing.”  What nonsense is this from a President of the United States in the age of the new Global Economy?  Companies outsource when it benefits their customers, who in turn wind up with more disposable income to either save, or use for consumption.  America’s economic future will not be tied to jobs that can be performed quite well in the world market for $1.00 an hour.  Obama knows better, but again, it’s election time. We suspect his pandering on this phony issue has caused considerable discomfort among the estimated 5.3 million Americans who are employed by foreign companies who are likewise investing in the United States.  In fact, without those 5.3 million American jobs our unemployment rate would be above 13%.

President Obama tells us in campaign speech after speech that Romney’s plan is to double down on policies that haven’t worked, which is demonstrably untrue.  That is like saying Simpson-Bowles was a rehash of Bush’s policies.   In the same breath he tells us that his policies are working, also demonstrably untrue. President Obama likes to talk about what he inherited from Bush.  Well, one of the things he inherited from Bush was a country coming out of (not going into) a recession. When recessions end economies begin to grow.  That’s the definition of the end of a recession.  The recession was ending as Obama took office and was over within weeks.  His presidency has been largely a post recessionary presidency, but he has not pursued policies that have encouraged the type of accelerated growth that ordinarily follows every recessionary cycle. Instead, he has succeeded in spooking the economic recovery with the same strategy of debt, deficits and burdensome regulations that is smothering so much of Europe.

The country wants an end to the name calling and bickering.  It wants the President to defend his policies, and it wants Governor Romney to explain why his economic plan would promote strong economic growth as he promises.  Both campaigns have to shift gears, and begin speaking seriously to the American electorate.  To do less is to sell the people short.  That’s a short sale we don’t need.