The 2012 Presidential Election: The Most Important of A Lifetime

This is our last essay before the election. It will be, perhaps, the most important election of our lifetime.  We have written, week after week, about most of the important issues in this election.

On foreign affairs, we wrote about the importance of the United States maintaining its world leadership lest we find ourselves significantly compromised in our ability to influence events involving our national interests in very faraway places. ”Foreign Policy” seems almost an oxymoron in this Administration. It is more myth than reality.

We unilaterally deep-sixed a perfectly sensible missile defense treaty with Czechoslovakia and Poland, apparently to curry favor with Russia for which we have received nothing discernible in return. Whatever our real foreign policy is with Russia will, apparently, be known once the election is over and the President “has more flexibility” to please Vladimir.

President Obama stated that he wants to put daylight between us and our only dependable ally in the Middle East, Israel in order to increase our credibility with Israel’s historically hostile Arab neighbors. Yet, according to a recent PEW survey of world opinion we are now more poorly thought of throughout the world (with the exception of our traditional allies), and we are, ironically, especially reviled in the Muslim world where, from the day of President Obama’s inauguration, he has lavished rhetoric on the re-set of our relations with the Muslim nations of the world. Which brings us to racing-to-be-nuclear Iran, where we sat as silent spectators when their people really did rise up against the Mullahs.  We sat there and watched in utter silence. Libya, our much touted crowning achievement, —  why even comment, no sense piling on.

The South China Sea is another example of our fecklessness.  What if (or when) the Chinese decide they want to incorporate Taiwan?… or challenge the Philippines over sovereignty in the West Philippine Sea (also the South China Sea), Southeast Asia’s resource-rich maritime heartland.  Up to now, the U.S. 7th Fleet has put the Chinese government on notice that Taiwanese independence is an essential security interest of the United States and that we are treaty partners of the Philippines.  As we continue to cut our military spending, or if the sequestration scheduled to take effect at the turn of the year goes into effect, we will gut our forces (especially our ever-shrinking navy) and greatly compromise our ability to defend our interests and to stand by our friends and allies.  And what in the world will we do if Iran challenges us in the Straits of Hormuz, and North Korea decides to fire again on South Korean ships and territory, and China simultaneously moves against the Scarborough Shoal off the northwestern Philippines to which China now lays claim?

We largely ignored Latin America, waiting needlessly for two years to sign a free trade agreement that was awaiting signature the day Obama assumed office.

America is neither militaristic nor expansionist, but the world has benefited from U.S. support of democracies and free elections around the globe.  On the other hand, the Obama Administration apparently believes its policy of “leading from behind,” whatever that means, should be the new norm.  In the post‑war history of the United States, we have led from being ahead and the world has benefited.  Leading from behind simply is not leading; it is forfeiting.

Last week we wrote at length about the situation in Benghazi, not only the deception and the cover up, but also whether we had the military wherewithal or even the will to respond to what was an obvious terrorist attack against the United States, an attack in which our people were left to fend for themselves.   The Obama Administration’s agonizing reluctance to call the attack an act of terrorism, or to beef up security in Benghazi when our people were, for months, pleading for more support were exercises in deception and denial or incompetence.   The reader can be the judge!

On domestic issues we have deplored the weak economic growth that the United States has endured during the four years of the Obama presidency even though the recession ended over three years ago, within weeks of his assuming office. Barely enough jobs are added to the economy each month to keep pace with population growth; and just last Friday the Bureau of Labor Statistics reported that unemployment has, once again, ticked up to 7.9% (a level higher than when Obama assumed office).  The Obama Administration has also consistently pursued tax and regulatory policies that encumber small businesses (where most jobs are created).

This country needs a president who will not only make economic growth his highest priority, but one who knows what to do, and just as important, what not to do to encourage businesses to invest and to give consumers the confidence to resume appropriate levels of consumption.  Over time, steady economic growth, and only real economic growth, will restore prosperity to America.    The large impact of steady growth harnesses the power of compounding economic expansion.  Even 2.5% annual growth leads to a doubling of GDP within 29 years, just as China’s growth rate in excess of 8% between 2000 and 2010, led to a doubling of China’s GDP within 10 years.

This Administration has forfeited economic policy leadership to the Federal Reserve.  The Fed actually has made several questionable efforts to boost growth by injecting vast amounts of new money into the economy.  While one can at least credit Fed Chairman Ben Bernanke for trying, flooding the market with trillions of dollars devalues the currency; risks significant inflation; devastates the return on savings and threatens the role of the US dollar as the world’s reserve currency.  Our currency has been downgraded once already during the last four years, and flooding the market with newly printed dollars risks doing it again.  Moreover, inflation which has been quiescent, simply because the country is in economic doldrums, one day will come back and bite us quite painfully.  In any event, the Obama Administration has turned leadership over to the Fed, and the Fed is no substitute for a president who understands that sustained economic growth is the only sustainable way to lift people from poverty and to raise living standards.

The country needs a president who understands that perpetually borrowing to finance entitlements, pork and “investments” in government- blessed start-ups is not sustainable.  The Obama Administration is trying to deny an axiom (that which can’t go on, invariably doesn’t), and common sense is not deniable.  The Fed is engaging in one quantitative easing after another in order to suppress interest rates.  The fact is we cannot afford historical levels of interest on our debt.  While we now are at historically artificial low rates of interest, every additional 1% of rate increase (and those rate increases are coming) is equivalent to a $100 billion hit to our budget.  When we return to historical rates of interest of between 5% and 6%, we will add another half trillion dollars to our annual national budget for interest alone.

Let us look at the competing philosophies of the incumbent president and his challenger.  Democratic strategists know that the American electorate reacts very negatively to the term socialism, so they do their best to discredit any and all who call Obama a socialist.  But as Professor Paul Roderick Gregory, economist at the University of Houston observes, Obama is a socialist in the European reform Marxist tradition of Karl Leibknecht, August Bebel, Paul Lafargue and Leon Blum who together with others formed the European socialist parties we observe today in Europe.  “Whereas, the eighteenth century liberalism of John Locke and Adam Smith gave us our constitution and limited government, Marxism provided the intellectual foundations of the European welfare state,” he writes.  In France, Obama would be the candidate of the French Socialist Party; in Spain he would be at home in the Socialist-Workers Party.  In any event, he is leading far more like a European welfare statist than he is as the president of a market-driven, free enterprise-oriented nation.  We are not suggesting that Obama is some sort of a card-carrying socialist of the Cold War tradition.  Modern European socialists are proud of their rich tradition and heritage that dates back to the split with revolutionary Marxism at the turn of the last century.  In the United States, however, serious candidates for office conceal rather than openly proclaim their socialist beliefs.  But Obama did, however, in 2001, share with WBEZ, a Chicago public radio station his leftist views about our constitutional flaws concerning economic justice and redistribution of wealth.

“It (the Warren Court) didn’t break free from the essential constraints that were placed by the founding fathers in the Constitution, …that, generally, the Constitution is a charter of negative liberties. It says what the states can’t do to you, it says what the federal government can’t do to you, but it doesn’t say what the federal government or the state government must do on your behalf. .One of the… tragedies of the civil rights movement”, he said, “was because the civil rights movement became so court focused. I think that there was a tendency to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalitions of power through which you bring about redistributed change (emphasis added) and in some ways we still suffer from that.”

In a subsequent interview Mr. Obama clearly expressed his opinion that once a certain level of income is achieved, that people then have enough (and presumably, thereafter, all of the balance should be taxed for redistribution or some other government purpose). And while that was Mr. Obama’s view, he did go on to say that it wasn’t the American way. Fair enough.  It would simply be the Obama way, if he could have his way.

By contrast, Governor Romney offers a vision of faith in private enterprise and a distrust of excessive government intervention.  Obama disguises his views with slogans about fair share and only weak protestations of faith in private enterprise.  As Mark Henderson wrote in a recent edition of Forbes Magazine, the problem is that the dictionary definition of socialist sets an almost impossibly high bar for any leader.  Even Lenin himself could not meet that standard.  Actually Lenin tried to implement pure socialism when he first came to power, but when his policies caused the Russian economy to collapse all around him in 1921 he abandoned literal socialism and replaced it with a pragmatic expedient reform program called the “New Economic Policy”.  Under that policy, Lenin permitted various small privatizations while seeking state domination of the commanding parts of the economy. Of course, that ultimately led to collapse as well.

In an opinion piece written in The Boston Globe, Scot Lehigh drew the contrast.  He described the incumbent president as one who believes that an economically healthy middle class is essential to a prosperous nation (who could argue with that), and that middle‑class spending will stimulate the economy.  He thinks that federal expenditures for everything from training to investment in new government-favored industries are vital.  For Obama protecting that spending is more important than any growth resulting from tax rate reductions.

By contrast, Romney believes that small businesses are essential to a more robust recovery.  When Obama railed that letting the Bush tax cuts expire for upper earners would hit only 3% of small firms, Romney correctly pointed out that those companies account for well over half of all small business jobs.  Obama focuses on the mere 3% of small business his policies would burden while Romney focuses on the 54% of jobs those businesses represent.

So there it is.  We clearly have a choice to be made next Tuesday, November 6.  It is a choice between a state-directed economy where major decisions with major economic consequences are made by government bureaucrats, and in which bashing high earners is simply de rigueur; against a competing vision based on the power of the American marketplace in which more of what people earn is left in the hands of the people in the belief that they will, on balance, produce the most efficient allocation of the capital of the nation.  The choice is all of ours, and we make no secret of what we believe to be the better of the competing visions we have before us.