Why the highly imperfect Barack Obama deserves to be--and will be--re-elected

President Barack Obama has succeeded in doing some of what he said he would do during his campaign four years ago, and he has failed to accomplish other goals he set forth at that time.  Oddly, there is a single common thread running through both successes and failures -- political compromise.  This is why he deserves to be reelected, and it is why he will be reelected.

Americans, for the most part, are in favor of political compromise.  In a prior posting you can read about the polling results showing that big majorities of those who identify themselves as Democrats and as Independents favor compromise.  This is how the middle of the political road is found.  Unfortunately, the leader who works through compromise is usually a disappointment to some, and perhaps even a villain to others.  Nowhere near a perfect outcome, is it?

The successes

Obamacare, as enacted, is a compromise.  It's based on the long-standing, market-based fee-for-service healthcare model that the country has always used.  Liberals would have preferred moving towards a single-payer system; conservatives would have preferred less, rather than more, regulation.  As President, Barack Obama succeeded with a compromise that found the middle of the road.

The Federal stimulus program of 2009 was a compromise.  Liberals--those of us, anyway, who describe ourselves as economic Keynesians--wanted a program that would have been at least twice its eventual size.  Conservatives--Republicans, in this case--apparently wanted nothing.  That's another compromise and another middle of the road.

New regulations for the financial system and continuation of the "Bush tax cut" income tax rates are the results of Obama's apparent proclivity to seek consensus since neither side in the debates came away in the end with all that was desired.  Political consensus is achieved only through political compromise.

The failures

He has failed to plan for the proper management of the Federal debt; for the closing of the detention facilities at Guantanamo Bay; for increased effectiveness of environmental protection in the face of an onslaught of global warming consequences; and there's no doubt that the rates of joblessness and underemployment are too high.  But for each of these, Barack Obama has proposed worthy, if imperfect, programs; and all of them have been stymied by a Republican-led House of Representatives.

The voters recognize that the Republicans have blockaded these proposals, and they know this not because it is somebody's opinion, but they know this because elected Republicans and the GOP have boasted of having done so.  And that helps to build the case for Obama as a compromiser and middle-roader.  Extraordinary, perhaps, but true.

The swinging door

The campaign for Republican presidential nominee Mitt Romney has primarily been one of looking for votes from people who don't like Barack Obama, his policies and his successes.  In this case, the successes are presented as failures, but such a presentation is political posturing.  If the man said he would do something and he made it happen, then it's a success, even if you don't agree with it.  This is a door that swings both ways in politics; sometimes the Republicans push harder to swing it in their direction, and other times it's the Democrats who do that.

The swinging political door isn't new, and it doesn't help all that much in winning elections.  It doesn't help because it sends a mostly negative message.  Both campaigns have indulged in negative advertising, but the Romney Republican campaign has mired itself in that environment.  As a result, any message promoting the specifics of what to expect in a Romney presidency is muted.

The election

In other words, where Barack Obama as President has succeeded, there is no specific evidence from the Republican campaign on how Mitt Romney as President would succeed further.  And, where Barack Obama has failed, there are likewise no specific proposals on how a Romney presidency would yield better results.  The Republican campaign spouts dogma--such as, decrease tax rates for the rich because they create jobs--but there are no specific proposals regarding how to make such a thing happen when it has never happened before. 

On the contrary, the specifics of the Romney campaign include such things as signing the Norquist "no new taxes" pledge, and publicly stating during the Republican primaries that a hypothetical offer of $10 in Federal spending cuts in return for $1 for new taxes would be unacceptable because that would amount to a compromise.  People want compromise.  That's the way the American government has succeeded for over two hundred years.  (What could be more "conservative" than continuing to do things the way that they have been done for two centuries and more?)

When confronted with the choice between the imperfections of the compromiser that is Obama, and the likely poor governance that will result from the lack of well-thought and carefully presented details that have so far been the hallmark that is Romney, the American voters will choose Barack Obama.

Writing a voter ID law? Better check the Constitution--and the history books--first

Should we do a better job of identifying voters in this country?  Perhaps, but if so, then we would have to deal with all of those nitty-gritty details about how to do it, and how to do it right.

First of all, this seems like a solution looking for a problem.  Cries of "voter fraud!" are dramatic and appealing, but they don't seem to be accompanied by proof of meaningful amounts of fraudulent behavior.  If such proof exists, it's apparently mighty hard to find.

There's an organization called True the Vote that has been active on this subject in some controversial ways.  So, I browsed on over to their web site, thinking that if anybody would be trumpeting some statistics on illegal voting or registration that it would be them.  Evidently, they either don't have anything like that, or they want to make it oddly difficult to find.

We dare you to learn more about voter fraud!

The web site offers a chance to "learn more" about how "True the Vote corrects the vote fraud deniers."  Making that choice presented me with a copy of a letter from their lawyer addressed to some other organization that has been criticizing them.  Well, you've probably guessed by now -- there wasn't much to be learned by reading that letter.

Delving further into True the Vote's web site--quite the intrepid investigator, aren't I?--enabled me to discover a section called "Latest News for Voter Fraud" which began by asking me if I was aware that there are "voter fraud convictions and investigations in 46 states?"  Well, no, I didn't know that, but with that enlightenment under my belt and thinking to myself "this must be where the meat is" I pursued the subject further.

Okay, now we double-dog dare you!

Sure enough, there's a list of states right there in front of me, all neatly arranged in alphabetical order and numbered from 1 to 46.  Yes, I counted them; and came up with 46.

One of the states listed was California, the most populous state in the country, and maybe it's chock full of illegal aliens all of whom are just itchin' to cast illegal ballots.  So, mumbling to myself "this is gonna hurt because they've gotta have a bunch of something from California that they want to go on and on about" I clicked on the entry for California.

On opening my eyes I found myself confronted with a single news article from a local web publication covering Escondido.  It turns out that an illegal Mexican immigrant in that municipality has recently admitted that he in fact cast a fraudulent vote in the 2008 election.  There was no mention of why he didn't trouble himself to vote in the 2010 election.

The 2010 Census counted something like 37 million people in California, and in the 2008 election the state counted more than 13 million votes.  Congratulations to True the Vote -- you've managed to find somebody's news article about one out of 13 million votes.

Their evidence about naughty voting is no more impressive for Ohio--less so, in fact--but they are still looking.    

See, for example, the recent article by the Los Angeles Times on related efforts in Ohio which have largely backfired.  Towards the end of the article is this statement by the Republican Secretary of State Jon Husted:  "When you cry wolf, and there's no wolf," he said, "you undermine your credibility, and you have unjustly inconvenienced a legally registered voter, and that can border on voter intimidation."  Nicely said, Mr. Husted, although it might also be true that such a border was crossed.

Where's the evidence of widespread voter fraud in this country?  Beats me.

If it's a good idea, it deserves to be well-handled

Which isn't to say that having a better and more positive way of identifying voters is a bad idea.  Maybe it's a good idea.  Seems like it's worth thinking about.

So far, though, any legislation and actions that states have taken in this regard have been very flawed.  It's all been based on photo identification -- what it is, how to get it if you don't already have it, and how it is used.

There are a couple of obvious problems with photo identification for voters, not that the flurry of legislation this year has given any thought to them.  To begin with, how do you keep photo ID's current with a person's changing appearance?  Appearances can change for a variety of reasons; age comes to mind as one, or am I the only person who has noticed my changing visage due to a receding hairline?  And it also seems like there would have to be ways of mediating disputes about the validity of photo identification, whether it is in-person or in some way connected with the ever more popular practice of vote-by-mail.

Anyway, instead of confronting practical issues that are presented by helpful citizens such as yours truly, some state legislatures are burdening us with faulty new laws on the subject.

Texas, for example, with a Republican-dominated Legislature, passed legislation that required voters to obtain their ID's by making a personal visit to a state office, branches of which are spread around that geographically-expansive domain.  However, about a third of the counties don't have any of those offices, and where there are offices they keep them open for--at best--normal business hours.  Whatever that might be in a state that prides itself on frugal state business operations.

Fortunately, the Voting Rights Act of 1965 and a Federal Court have put the kibosh on the legislation.

6 August, 1965 - Pres. Lyndon Johnson and Martin Luther King, Jr. at signing of Voting Rights Act

                                                      

In Pennsylvania, the Republican-majority Legislature enacted voter ID legislation that would require a person to present four forms of other identification first, one of which would have to be the individual's birth certificate.  And there would be a charge of about $20 or so for obtaining the birth certificate.  That's equivalent to a poll tax, and so another kibosh is applied.

It seems as if there might be job openings for constitutional lawyers in a couple of state legislatures.

By the way, this is the Pennsylvania legislation which, when passed, caused the leader of the legislature's Republican representatives to gleefully exclaim that they had just passed a law that would ensure the state's electoral votes go to the Republican presidential candidate this election year.  Judge for yourself what that man's motivation might have been in supporting the legislation.

Get trusted the old-fashioned way -- earn it

The states cannot be trusted on this subject.  The Fifteenth (1870) and Nineteenth (1920) Amendments to the Constitution are there for this reason, as is the Voting Rights Act of 1965.  They couldn't be trusted in the 19th Century; they couldn't be trusted in the 20th Century; and they cannot be trusted now in the 21st Century.  Some of them are regressing.

Which isn't to say that improving voter identification is a bad idea.  There's no obvious reason to fret about it and rush into it by enacting faulty legislation.  But if it is found to be a good idea, then it needs to be done at a Federal level, because there's a whole lot of history telling us that it cannot be done in the right way at the state level.

A different take on -- Government Deregulation: Be Careful What You Wish For

(This article is written and researched by Guy Heston, a good long-time friend and return contributor to LeftWingCapitalist.  It is thoughtful and insightful.  He is very even-handed about these things, so you will probably find this to be more informative and entertaining than anything I could have written on this topic.  --LWC, ed.) 

My friends on the right are in an election year tizzy over government regulations.  The United States Chamber of Commerce, of late funding a massive pro-Republican television ad campaign in battleground states such as Virginia, Ohio and Florida, has invoked the name of conservative icon William F. Buckley by declaring, “At some point we must stand athwart the growing regulatory blob and yell stop!”  The Republican Party Platform 2012 contains various references to regulations, including this doozy:  “Experience has shown that, in caring for the land and water, private ownership has been our best guarantee of conscientious stewardship, while the worst instances of environmental degradation have occurred under government control.”

Anyone who has ever dealt with a city planning department can attest to onerous regulations.  And I would argue that deregulation of the airline industry has been largely beneficial to the public.  We flyers get herded like cattle and nickeled and dimed on fees (at least the loo is still free) but the price and access are better under deregulation and the airlines do have to worry about competition.

But be careful what you wish for.  Deregulation does not always serve the public interest.

The radio broadcasting industry -- it used to be fun, but those good ol' days are just quaint

Take for example the radio broadcasting industry.  Once upon a time radio stations were closely regulated by the Federal Communications Commission under the Communications Act of 1934.  The theory was that since broadcast frequencies were limited and belonged to the public (unlike the newspaper industry or what’s left of it where anyone is free to publish) there should be some rules to protect the public assets.  And so it came to pass that no one, including corporations “who” have since been ruled by the Supreme Court to be people, could own more than seven AM and seven FM stations and no more than one AM and one FM in any city.  The idea was diversity of ownership and programming.  And a station was required to devote a certain amount of air time to news and public affairs. Radio flourished, even with the former and now quaint regulation limiting the amount of commercial time in any one hour of broadcasting.

Prodded by the Reagan administration, both the FCC and Congress began to ease regulations, lifting restrictions on the amount of advertising that could be carried, somewhat easing restrictions on the number of stations one could own and so forth.  Most famously, the Fairness Doctrine was turned off in 1987 (another quaint regulation that simply and without any prior restraint required broadcasters to be fair in the presentation of their programming). 

Fast forward to 1996 when the radio industry was vastly deregulated (OK, I admit it happened under a Democrat president).  With encouragement by the National Association of Broadcasters (NAB), those pesky regulations on ownership limits were mostly tossed.  Corporations were freed to buy hundreds of stations all over the country (there are still certain limitations to how many stations you can own in one market, so even today you cannot buy every station in Los Angeles and monopolize the market--a small tribute to government regulation).  

Radio broadcasting now -- all monsters, all the time

What do we have to show for this?  The radio industry is now dominated by a few corporate players such as Clear Channel, Cumulus and CBS Radio.  The largest is Clear Channel, which owns more than 850 stations according to its website.  As a result of a huge cost cutting effort at such companies, thousands of local DJ’s, newscasters and other radio employees have been laid off.  Much of the programming you hear originates from out of town via computer, explaining why you infrequently hear the time and temperature or much local news unless you are listening to one of the few metropolitan news/talk stations.  If you are traveling around the country, it’s often difficult to know what city you are in just by listening to the car radio since the programming is so often piped in from who knows where.  Kind of like elevator music.  So much for deregulation.

Let’s return to the National Association of Broadcasters, that potent force for the free market place.  It turns out that when it suits the interests of its corporate members, the NAB is all in favor of government regulation.  So for example it recently proposed the FCC require/mandate/order (pick your regulatory verb) smart phone manufacturers to include FM radio access on your device.  Some manufacturers already provide this option, so consumers are regulation-free to choose this if they so desire.  But, no, the NAB wants this regulated--consumers would get it and pay for it whether they want it or not.  Those blasted government regulations!

I can appreciate the NAB’s concerns.  Radio advertising has been sluggish.  More than 20 million Americans have freely chosen to subscribe to Sirius/XM satellite radio.  Pandora Internet radio is hugely popular.  And now even Apple has announced it’s getting into the personalized on-line radio game.  That blasted competition!

So by all means let those of us who wish stand athwart the growing regulatory blob.  Unless of course the blob affects your corporate interests.  Meanwhile, others of us occasionally listen to terrestrial radio and pine for the glory days of a little more regulation.

There's only one way to create more jobs, and you probably haven't heard it yet

Political Parties are here to stay
Some draw backs but there's no other way.
They are part of our political DNA
Whigs, No Nothings, Bull Mooses come and go
But GOP's and Demo's run the show.
People gather, goals are set
But without structure they can't be met.
So up with Parties is what I say
Bottom line--there's no other way.

Credit for that limerick goes to a friend whose career with the U.S. State Department took him around the world a few times.  He offered it after reading my August 28 posting "Would we be better off without political parties?"

The Democratic and Republican parties have held their conventions, their respective presidential candidates are officially nominated (no surprises were unveiled), the campaigns are fully underway, the polls indicate that jobs and the economy are the top issues in voters' minds, and yet nobody in the political limelight has ventured to state the obvious fact about these issues.

Let's get this out in the open right now.  That way, at least we will know this, even if nobody else does.

This is what is obvious, but it is being ignored:  The reality of the jobs and economy equation is this--it cannot be solved by manipulating the variables in the ways that are being proposed by the campaigns.

There's no complex or arcane economic theory being offered here.  I'm not qualified as an economist.  This is not a politically-partisan harangue, although my political affiliation and preferences are clear.  This is only a statement of facts and observations that could be made by anybody.

It's really pretty simple.  There will be more jobs only when businesses make decisions to hire more workers, and they will make these decisions only when they believe that demand is increasing for whatever it is that they are producing and delivering.  It's the whole supply-and-demand thing that is at the basis of a market economy.

The fly in the ointment is that demand will increase only when American consumers decide that the time has come to consume more, or when other countries want to import more of what American businesses produce here in the good ol' USA.

Since conventional wisdom--for whatever it is worth--holds that 70% of the American economy is the result of domestic consumer demand, then domestic consumption is the big lever that will bump up demand, thereby providing justification for businesses to hire more workers.

But that 70% was hurt pretty badly by that pesky Financial Crisis back in 2008, and they--we--are still healing from that hurt.  Much of that pain is the product of too much in the way of home mortgages and other such consumer debt.

As a result, an increase in domestic consumer demand will occur only when American households in the aggregate have decided that they have reduced their debt loads enough so that they are at the point where they will want to spend money on things other than reducing their debt loads.

Spending money on reducing household debt levels does nothing to increase consumer demand.  In fact, the result is just the opposite:  it reduces demand whenever money that might be spent elsewhere is instead being spent on retiring debt.  And that is what has been going on since the so-called Great Recession began in 2008; Americans have been financially-focused on reducing their household debt levels.

Forget about causing economic expansion and creating jobs by reducing tax rates.  It won't happen.  It has never happened, and there's no evidence to suggest that this time could be any different from the past.  Consider this graphic which I found on Zack's Investment Research web site:

Sources:  Tax Policy Center, Federal Reserve

That's a plot of the relationship between all of the top marginal tax rates and annual economic growth over the last century.  In this case, the last century is the time period that coincides with the adoption of U.S. income taxation through the 16th Amendment to the Constitution.

If you can see any kind of trending relationship between lower tax rates and higher economic growth--or, for that matter, between higher tax rates and lower growth--then you have a better imagination that do I.

Removing or reducing government regulations on business won't solve the jobs equation, either, because such an action does nothing to increase consumer demand.  Some regulations probably deserve to be taken off the books, but generally for reasons other than job creation.

And let's not have an increase in taxation of consumers that would make it more difficult for households to complete their debt reduction process and delay the eventual recovery in domestic consumption.  Instead, use government policy to encourage faster household debt retirement and a more expeditious return to growth in domestic consumption.

There's one more thing that neither campaign is brave enough to tell us:  The size of the national debt ought to be thought of as beside the point, because it is.  What matters is the annual debt service; in other words, the annual interest payments.  Even with a growing amount of national debt, the hyper-reduction in interest rates keeps a lid on the interest payments, most of which gets paid right back into the United States, anyway.

Don't waste your time on thinking about ways to pay off the national debt.  It's never going to happen.  More importantly, it never should happen.  The U.S. dollar is the world's most popular currency because people feel that it's the safest.  Safety comes from liquidity, transparency and supporting economic growth.  U.S. Treasury debt is highly-liquid, totally transparent, and American economic growth, though currently modest, is real.  Also, our economy is the world's largest (by far) and is supported by a mature and well-known legal system

Instead of fretting about the government's debt, aim your creativity at ways to increase the growth and size of the American economy, because the concern about the national debt will rightfully fade away once the nation's GDP is growing faster than is the size of the debt.  The country had a relatively much higher debt load after World War II, and it was American economic growth, more than anything else, that neutralized any negative effects caused by the debt.  Perhaps at some point it will turn out to be prudent to pay down a portion of the national debt, but if that ever appears to be so then everybody had better take a time-out and think again about how such an action could absorb money that would otherwise be used in consumption, and how that would cost jobs again.

Which brings us back to the American consumer, the demand from domestic consumption, and 70% of the nation's economy.

Our politics need to do something to make households comfortable with their debt loads so that they can consume more.  That will increase demand for goods and services, which will give businesses a justification to spend at least some of that horde of money that they have on hand by hiring more workers.

The devil, as they say, is in the details, and I'm not smart enough to figure out those details.  At this point, it does not appear that the party campaigns have people who can figure them out, either.  It's good to know that the problem isn't just with yours truly.

Somewhere along the line before the election, we deserve to be hearing an economic campaign theme that is devilishly different from what we have heard so far.