What this Campaign is About

There are two excellent articles in the New York Times this morning that I think clearly articulate the central fulcrum of this election.  The first by Tyler Cowen focuses on how America has begun to move from a wealth generating society into a wealth taking society by focusing too much of our energy on the political fight over how the pie is divided up, and not enough on actually enlarging the size of the pie.  The second by Chrystia Freeland compares the US to Venice in the 14th Century, and how the US is in danger of, as Venice did then, moving from an inclusive economy where there were opportunities for risk takers to enter the ranks of the elite, to a closed system where the elite just sucked as much wealth out of everyone else as they could and closed off opportunities to the rest of society to join their ranks.

Mitt Romney has recently been trying to apologize for and walk back his comments about the "47%" of Americans who are "takers" as opposed to "makers" in our economy.  A recent survey showed that 96% of Americans have received direct benefits from the government at some point in their lives (Mitt Romney's own father was on welfare at one point in his life), so the idea that there is one portion of society that takes and another that makes is absurd.  But beyond the absurdity of his comments, and the absurdity of his apology for them (Romney's first reaction to the public finding out about his 47% comments was to stand behind them), lies I think the essence of what this campaign is about.

Romney, even in his recent "moderate" incarnation, clearly believes that he and wealthy people like him are the primary engine of our economy.  He believes that the wealthy people, by putting their money at risk in the market help to grow the economy and create jobs through their support of new innovative ideas.  It's why Romney sees nothing wrong with his effective tax rate being far lower than most working class Americans.  In contrast the President  has always said that he "wants to grow the economy from the middle out."  Now Mitt Romney would always say that the middle class is important,  and that his policies will do more for them than the president, but let's go back to his comments on the 47% of Americans.  Think about the audience for those comments.  Mitt Romney made his makers and takers distinction before some of his very wealthy campaign donors, people who were spending thousands of dollars just to hear him talk and ask him a few questions. His message to them was that even though they and other people like them had been by far the greatest beneficiaries of the US's economic growth over the last half century, that it was the poor and the working class, who have hardly benefitted at all from that economic growth, who deserved to pay more in taxes.

This is the whole campaign. Mitt Romney is pretty vague about his policies, but one thing he has not been vague about is that he thinks that wealthy people like him are so important to our success as a country that we should keep cutting taxes on them to allow them to put more money into the economy and help it to grow.  What are the consequences of such a policy?  Well, there are really two possibilities.  If you want to cut taxes on the rich, or even just leave them where they are, you either have to raise taxes on everyone else, or you have to borrow more money which will eventually force everyones takes to go up.  The bottom line is that for the rich to pay less everyone else has to pay more.  That hurts social mobility.  If you have to pay more in taxes, you really aren't able to worry about taking a risk and starting a new business, or getting education to learn a new skills.  We need more people taking risks not less, and right now the system is set up to really only favor those at the top, whose only real concern seems to be to stay on top.  Which is why they're all too happy to hear from Romney that he sees them as the makers, and those who are the most vulnerable are the takers.  It absolves them of their responsibility to pay their fair share.  Can you close the budget deficit just by taxing the wealthy? No, but if you don't raise taxes on the wealthy, you have to make up the difference some place else, and all of the other options tend to hurt those Americans who can least afford it the most.

The consequences of such a policy put into action would be disastrous.  We have already seen how much the deck is stacked in favor of the wealthy with this recession. Wall Street gets a bailout and they're already back to making big profits.  Meanwhile, the payroll tax credit, which is a huge benefit to working families, will likely die at the end of this year, with neither party lifting a finger in its defense. If the President wants to win reelection, he needs to make this distinction clearer.  It's great to talk about growing the economy from the middle out, but Obama needs to provide a clearer vision of what that means.  America should be able to provide a quality education to all of its citizens. It should be able to provide anyone with a good idea the ability to put that idea into action in the marketplace. But those things are not true right now for any number of reasons. Obama has to show himself to be the president who will help change that, who will fight to make the system work for its citizens. We all have an ownership stake in America.  We don't need a president who absolves those who have benefitted the most from their responsibility to their fellow citizens, we need a president who fights so that everyone has the opportunity to achieve their version of the American dream.

The State of the Election

Obama and the Democrats had a great convention, and the Republicans and Mitt Romney had a bad convention, with Clint Eastwood merely the most memorably bad part.  Then Mitt Romney had a great first debate and Obama had a bad first debate, which was all the more bad because of how much it changed the narrative of the campaign (the media loves a new narrative!). So now we are back where we started, with the fundamentals making Obama a slight favorite, but with the election really anyone's game.  As an ardent Obama supporter this should have me worried, but somehow it doesn't at the moment. For one thing I am confident that the president will turn in a much better debate performance in the second presidential debate.  He didn't lose the first debate on arguments, he lost it on tone, body language and posture, which should not be discounted, we say a lot with how we carry ourselves, and no one wants to follow a president who is not confident and self-assured, especially when he's defending his record and his plans for the future of our country.  But the president has good arguments, he simply has to marshal them.  Here are some things I'd like to see the president do.

1) Directly appeal to young families and young female voters in particular by campaigning for mandating employer provided maternity and paternity leave.  Maternity leave should be a no brainer for the president.  It helps him highlight the Republican party's ambivalence to female voters, and the democratic party's historical strength with that demographic.  Also, this gives his younger supporters something to be excited about.

2) The payroll tax holiday is about to expire at the end of this year, and most economists expect the end of the holiday to exert a significant drag on the economy at just the wrong time. Why not commit to trying to extend it if you're president and make Mitt Romney say why he wouldn't support such a move. It's good policy and it's a strong direct appeal to the middle class, and as long as politicians are getting away with saying things they'll never do, why not at least try to reignite some momentum behind an actually worthwhile idea, even if Congress will never go along with it.

3) Talk more bluntly about why his record and his plans for the future of the country are better than Mitt Romney's.  Romney gave a rather generic republican foreign policy speech this week in an attempt to convince voters that he can pass the commander in chief test, but Obama has a lot of actual foreign policy accomplishments to point to. 1) Bin Laden, 2) a number of free trade agreements (despite Romney's contentions), 3) the sure handed Opening up of Burma, 4) Libya (the tragic death of our Ambassador and several embassy staff not withstanding), 5) the broad tough sanctions against Iran, which would never have been achieved if the president did not make it clear through his open overtures to Iran that the Iranian regime was not interested in diplomacy or compromise in ending its pursuit of nuclear weapons, 6) the elegantly executed safe-harboring of Chen Guangcheng, and the list could go on.  If he wants to talk about the economy, he can talk about the 2+ years of private sector job growth and the fact that the unemployment rate is now below where it was when he came into office.  If he wants to talk about healthcare he can talk about the 80 million plus people who would lose their health insurance under Romney's plan because they have preexisting conditions, or the fact that the federal government picked up a large part of the tab for Romneycare, and in the words of Jeb Bartlett, can we have our money back?  Also, and perhaps more importantly, it is obvious to anyone with a calculator that Romney does not currently have a workable plan to bring down the deficit.  Obama should call him on this, and do so succinctly and clearly.  He should say something like

"To reduce the deficit Governor Romney wants to start by reducing tax revenue by 5 trillion dollars, then he wants to increase military spending by 2 trilling dollars.  Then he wants to start reducing the deficit.  Now, you know, if I told my wife that my solution to our household budget problems was to switch to working half time and buy that new sports car I've had my eye on, she'd slap me upside the head and tell me grow up.  And she'd be right, because you know when you reduce the amount of money you have coming in, and you spend more on things you don't need like a $2 trillion increase the pentagon isn't asking for, well then you have to cut back on the basics, the things people are counting on like medicare, and medicaid, and funding for education and medical research, and for our crumbling roads and bridges, and pretty soon you're living in a country where it's everyone for themselves, and not a country where we care for and support each other."

The president is fully capable of making these arguments.  All he needs is 1) a good nights sleep before the next debate, 2) to remember that American's like presidents who want to fight for them.

I wish him all the best.  We still need him to finish the job he started.