Having once written a column entitled, "Why Barack Obama will not be president," I am assiduously resisting any temptation to prognostication this electoral cycle. That is not to say, however, that I do not remain vitally interested in the outcome of the upcoming presidential election.
Sean Trende, one of America's leading electoral analysts, has written that few rules are as well established as the rule that elections involving an incumbent tend to be a referendum on the performance of the incumbent, so long as the challenger does not allow himself to be painted in an extreme light. If so, President Obama clearly faces a some significant hurdles ahead in his re-election bid.
Apparently the Obama election team agrees. Their strategy will clearly be to do everything possible to divert attention from the President's record in office to a host of peripheral issues: a thirty year-old incident involving Romney's dog: the "Buffet rule," which even under the most favorable assumptions would take 250 years to cover one year of the current national deficit, the GOP's alleged "war on women."
Thus, Romney's task will be to keep a relentless laser focus on Obama's record and to enunciate his own vision for handling the critical issues that the President has ignored or botched. Without specifically saying so, he would be well-advised to follow Mitch Daniel's advice of a quasi-truce on social issues. If the election turns on the latter, Obama's chances are much better. The most contentious social issues will largely be fought out at the state level beyond the reach of presidential power. And to the extent that they are resolved at the national level, the venue is more likely to be the Supreme Court than the Congress or the Executive branch.
The next president's impact on social issues will thus be largely indirect through his Supreme Court nominees. Social conservatives would therefore be well-advised not to push Romney to be too outspoken on irrelevant issues, and to remember that whatever Supreme Court appointments the next president makes could well be with us on the bench for the thirty years or more.
Romney should adopt Mitch Daniel's 2011 speech to the American Enterprise Institute, in which he labelled the deficit the "Red alert" of our times. And this is precisely the issue on which Obama is weakest. Indeed he has been entirely missing in action with respect to confronting the skyrocketing national debt. Obama appointed a bi-partisan commission to propose solutions to the impending budgetary crisis. And then he ignored their conclusions entirely. Even when he had overwhelming majorities in both houses of Congress -- a point Romney should emphasize when the President attempts to blame Republican obstructionism -- President Obama could not even get Congress to pass a budget, and his last proposed budget was unanimously rejected by the Senate, despite the Democratic majority.
In each of his four years in office, Obama has incurred budget deficits of over 1.29 trillion dollars, and brought annual deficits as a percentage of GDP to their highest levels since World War II. Under George W. Bush, budget deficits averaged 3.5% of GDP, except in 2001; under Obama they have averaged 9.1%. The Congressional Budget Office projects another 6.4 trillion dollars in deficits under current tax and spending policies through the end of the decade.
The $800,000,000 TARP stimulus bill at the outset of his presidency was touted as necessary to prevent unemployment from rising to over 8%. It was enacted, and employment nevertheless rose as high 9.2%, and has remained above 8% for almost the entirety of Obama's presidency. Those underemployed or who have dropped out of the labor market entirely is more than twice the number of those unemployed. The CBO estimates that the additional costs to employers imposed by Obamacare will reduce the number of jobs by 2021 by 800,000, while adding close to two trillion dollars in government expenditures.
Despite TARP and four years of highly stimulatory monetary policies, the recovery from the recession has been the most tepid in living memory, in terms of the rate of economic growth and job production. The United States has experienced four straight years in which government revenues were 16% of GDP, the lowest rate since 1950.
President Obama continues to nail his banner to the mast of the post-New Deal social welfare state at precisely the point in history when that model has proven itself to be antiquated. He has attacked Congressman Paul Ryan's plan to address the deficit crisis -- something which he has never offered -- as "social Darwinism" and a retreat from the traditional American vision. (Romney has given Ryan's plans a general endorsement.) Obama's vision remains steadfastly one of government expansion: higher taxes to pay for more greater investment in education, police and local services (remarkably, all areas with strong public sector unions). The only area of government that he has shown enthusiasm for cutting is the defense budget.
Yet the evidence of the growing inadequacy of the "blue social model" -- a regulatory state necessitating large bureaucracies, powerful public sectors unions, rewarded with large pensions by the beneficiaries of their political support, and generous social benefits -- grows by the minute. The death throes of the "euro," brought about by the budgetary prolificacy of an ever increasing number of member states, is but the most glaring. Europe goes on trying to paper over the sovereign debt crisis that could bring down its entire banking system. That sovereign debt crisis reflects years of stagnant growth, without any compensatory cuts in social welfare spending. Each meeting of European financial ministers takes on an ever more surreal quality -- so far removed are the proposed solutions from the task at hand and so quickly are they abandoned soon after being announced.
The overall European economy could suffer severe shocks prior to the election, with ripple effects on the American economy that would have an additional negative impact on President Obama's re-election chances. He, like most presidents during bad economic times, would not be entirely unjustified in blaming forces outside of his control. But there would a certain poetic justice given the President's habit of blaming his predecessor for all bad economic news during his tenure in office.
Closer to home, the failure of the blue model is most evident in the "blue states" from which it derives its name. Deep blue states, like California and Illinois, have had to continue piling on taxes to meet huge deficits, including pension obligations. The result has been the flight of businesses and workers to lower tax states, and even further budgetary woes. California municipalities find themselves choosing between paying the pension obligations to retired public sector employees -- e.g., policemen and firemen -- and maintaining current fire and police departments. Public sector employees in deep blue Rhode Island, whose union leaders negotiated decades of generous pensions from compliant legislatures, based on wildly optimistic economic projections have been told that there is no money to pay their pensions. That is a story that will be frequently repeated in the years to come, and which has already become commonplace at the municipal level.
Romney must not only attack the deficit crisis brought about by the blue model policies. He must make the case that President Obama's defense of the status quo is a recipe for economic stagnation and straitened opportunities, and that the burden will be felt chiefly by the younger generation -- which remains the most supportive of Obama. Social security receipts from the payroll tax are already lower than payments, and the gap will only increase. That means that younger workers paying in today can expect lower benefits. (Forget about the mythical social security trust fund. It consists of U.S. Government bonds, which would have to be redeemed by the same government.)
Obama's refusal to consider any changes to the structure of Medicare and Medicaid constitute a transfer from richer to poorer and from young to old. The average wealth of households headed by someone over 65 is currently 47 times that of households headed by someone under 35. And Obama's failure to muster bi-partisan report for changes in Medicare and Medicaid -- he prefers to demagogue the issue for electoral advantage -- amounts to allowing the older generation to demand benefits that effectively saddle future generations with unsustainable burdens.
Romney needs to hammer away at these points, and not allow the President to drag him into the mud of personal attacks. He must maintain his focus on policies that will foster growth and opportunity, as opposed to the President's vision of "fairness" that will only make us equally poor.