Wednesday, June 6, 2012

Right problem, wrong solution, right solution

My column in the Sky Hi Daily News today
According to recent polls, President Obama has plateaued at 48 percent, with Mitt Romney trailing slightly.

After a boost earlier this year, the job creation rate is disappointing though the economy is still growing slightly and jobs are being added. Economists predict recovery will limp along until November in the U.S.

To win decisively in November, Obama must convince more  voters GOP/Romney plans to heal the economy going forward are the wrong solutions and his plans are the right ones.

Last week former President Bill Clinton raised a ruckus when he criticized Obama for taking an anti-business tone by dwelling on Romney's mixed job creating record at Bain Capital. Lost in the resulting noise was a very important point Clinton made that could be the key to the president's winning the argument about the economy.

Clinton opined that Obama's plan for improving the economy was better than Romney's. That approach has real potential.

Such a comparison should include  more than rehashing the “trickle down economics vs. relief to the middle class” debate. The GOP's plan to stimulate growth is lowering taxes on the rich because they are the “job generators” and their wealth will trickle down to the rest but paid for by cutting programs that are perks for the middle class. Never mind the trickle trick never worked well, but history is not much of a political teacher.

Romney's newest argument is that if the president's policies had worked, we “would be much better along in the recovery.” That line is full of holes. The president was unable to do all he wanted to do because of obstructionist Republican Party control of the House, defeating the bill that would have added 2 million jobs. Obama could also argue that if Romney had been president we would have lost 3 million auto industry jobs because Romney's solution was to let the industry go bankrupt.

The other is that the GOP approach of nearly complete reliance on cutting government services was similar to the European austerity plans that resulted in loss of jobs, double dip recession or zero growth, and higher debt, and lowered demand. One wonders how much worse unemployment and the economy would be now if Romney had controlled the White House.

The GOP gives Obama no credit for coming so far along in the recovery, either. To Republicans, “partial success is total failure.” At least Obama's stimulus plan succeeded in reaching the goals he set in early 2009 when the depth of the recession was unknown and his stimulus/tax cut combination did create jobs. In spite of the GOP obstructionism, 4 million private sector jobs have been  added compared to the 700,000 per month we were losing. The economy is growing , the banking system and corporate profits are robust.

Romney has tried to head off any comparison of his plans with the failed European approach by saying he would only make changes “gradually.” “Gradual” is not what the Tea Party, the Republican base, or the under- and un-employed seek. Romney could find himself butting heads with his party's right wing on that one. Granted, Romney's plans are similar to the GOP plans that would require cutting spending drastically, depending too heavily on fundmental changes in Social Security and Medicare systems, back door privatization by using vouchers, and higher copays, while increasing defense spending.

Obama could also embrace the recommendations of the Simpson-Bowles commission that would keep the entitlement system in place we have now, but would simply gradually raise the retirement age and cut defense spending. If he adopted the Simpson-Bowles debt reduction recommendations now, he would be in even better shape to argue he has the right solution and Romney has the wrong one. 

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