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Sunday, April 15, 2012

ROMNEY: PROSPECTS AND OPPORTUNITIES


Now that Mitt Romney is finally free of Rick Santorum's quixotic campaign for the Republican presidential nomination he can devote his time, money and energy to the November election against Obama. He will find that the political landscape has changed in the last few weeks as some economic indicators have shown improvement. This progress and the damage done by Santorum's desperate political and personal demonizing of him have provided Obama with an advantage which is demonstrated in national polls. The President currently leads Romney in national head to head polling by2.6% (46.8 to 44.2). He has also improved his standing in critical “toss up” states like Ohio, Florida and Virginia, and the advantages of incumbency, including a supportive national media, present an up hill battle for Romney.

However, this president is still vulnerable and Romney needs to plan his campaign carefully to take advantage of a number of obvious Obama weaknesses. On a general level Obama's job approval rating on a national level is still at levels that fall into the “unenthusiastic” category. As of April, 2012 his average rating among several national polls is still less than 50% (47.2%). Thus Romney's first task should be to identify himself to the electorate by shedding the false identity contrived by Santorum and Gingrich in their failed attempts to send him to the sidelines. 

Even before the exit of Santorum, the Romney campaign chose to ignore him and the other primary hangers on, Gingrich and Paul and concentrate on Obama. This is the correct strategy. However, there are those in Santorum's religious right camp who are struggling to accept his loss and are seeking to make Romney the torch bearer of Santorum's failed “values” and social issues campaign. Ralph Reed, founder and Chairman of the Faith and Freedom Foundation wants Romney to become Santorum Lite: Reed says “. . .his immediate task is to consolidate conservative support and unify the party. The best way to do that is to appropriate the best parts of Santorum’s message.” Aside from the difficulty in identifying “the best parts” of Santorum's failed message, this is demonstrably bad advice. Santorum wanted to strengthen economic opportunities for Americans by strengthening families i.e “marriage”, in itself a positive goal, but his strategy for doing this was denigrating women who pursued careers and taking positions on issues that lacked popular support. On abortion (51% support; 43% opposed ); on gay marriage (46 % support; 44.5% opposed); and on birth control which generates support in the mid-70s. These are issues that are largely irrelevant to presidential powers and Romney would be foolish to go there. Given the choice of Romney or the most liberal president in modern times, if not ever, the idea that the disappointed religious right who Reed and others like Pat Robertson claim make up the “core” of the Republican Party and needs to be “solidified” for them to support the Republican candidate, makes little sense. 

There are several important areas where Obama is vulnerable and where Romney should concentrate.The most visible is the Patient  Protection and Affordable Health Care Act or “Obama Care” whose fate the Supreme Court will decide in the Fall. Romney need not wait for this decision to make this a campaign issue. While there are several components of the act which have appeal to voters such as requiring coverage for pre-conditions, keeping dependents on coverage until age 26, and making it more difficult for insurance companies to cancel coverage after large claims, the major flaw, other than the bureaucratic morass it creates, is the enormous public cost it generates. The latest academic study of the fiscal effects of the law predict an increase to federal spending of $1.15 trillion and $340 billion to federal deficits over ten years.
In political terms the importance of this issue is reflected in the fact that it affects every American in some way and 53% of the American public are opposed to it while only 39% support it.

Enormous federal debt and deficits: The existing federal debt is $15.6 trillion and growing. Even without Obama Care this debt is growing by $454.4 (2011) annually due to the accruing interest that must be paid on it but for which funds are not available. The Obama Administration's proposed federal budgets also are projected to run annual deficits in the area of $1.3 trillion dollars, all of which makes the new health care bill unsustainable and puts the future worth of the U.S. dollar in peril. The financial situation in the 17 nation Euro-zone is critical and instructive. The Euro-zone nations have a total government debt of $12.7 trillion which exceeds 100% of Euro-zone GDP (approximately 12.46 trillion (2009). U.S. debt is also exceeds U.S. GDP of $15.064 trillion ( 2012 IMF est.). The deficits and debt were the energizing focus of the Tea Party movement which helped capture the House of Representatives in 2010. This energy can be recaptured and spread to a wider electorate with common sense explanations and an agenda of specific spending cuts and tax reform.

Tax reform: There is general public acceptance that the federal tax code is too complicated and unfair. Obama's only focus on this problem is his attempt to politicize it by advocating the so called “Buffet Rule” which imposes a minimum tax rate of 30% on tax payers who make more than one million dollars a year. While this idea polls well with a public which is in general suffering from the economic downturn, as a financial strategy it does little to address the problems of debt and deficits. If enacted it would only bring in an average of $4.7 billion a year and thus have little impact on either the debt or annual deficits which measure in trillions, and is essentially a campaign tactic. The same thing could be accomplished by reducing the number of tax brackets and eliminating most deductions. This “simplification” would produce more “fairness” and could be structured to produce more revenue even if tax rates were lowered. Obama doesn't want to fully enter the politically sensitive area of tax deductions and “loopholes” from which some politically important groups benefit, but for the underdog Romney, the broad issue of tax reform offers an issue which could prove productive.

Jobs: Both political parties, and on the campaign trail, both Obama and Romney have expounded consistently about the need to create jobs in an economy facing 8.3% unemployment. The number is far greater when counting those workers who have become discouraged and stopped looking for work. Obama is vulnerable on this subject because his solutions are about government spending to support job creation rather than the private sector. His administration has two major examples of working against the private sector creation of jobs. 
 
Caving into environmentalist extremists who are ideologically opposed to fossil fuel development in any form, Obama rejected the huge Keystone pipeline project which would have brought oil from Canada across the United States all the way to the refineries in Oklahoma and on the Texas coast of the Gulf of Mexico. The thousands of jobs such a huge project would have required became the victim of disaster scenarios about alleged drilling based pollution in Canada and possible pipeline leaks over the vast aquifer in Nebraska. The fact that the pipeline sponsors offered to revise the route away from the aquifer did nothing to change Obama's politically inspired opposition to the plan.

In 2011 the Democrat appointees to the National Labor Relations Board accused Boeing aircraft company who wanted to complete construction on a new manufacturing plant in South Carolina to build the new 787 Dream-liner aircraft. This was based on a trumped up charge by union opposition to the non-union character of the new plant, in spite of the potential creation of thousands of new jobs in economically strapped South Carolina. It was resolved only when Boeing made concessions to its union workers in Seattle, Washington. 

While the unemployment rate has in recent weeks declined, the record of job creation since the beginning of the recession in December, 2007 has been one of private sector declines and government sector increases. Between 12/2007 and 2/2011 alone, while the private sector lost 7 million jobs, government workers increased in number by 230,000. In first two years of the Obama Administration the numbers were: private sector, down 2.6 million; government sector up 144,000. Obama's Fiscal Year 2012 budget (which failed to pass) included an additional 15,000 new federal jobs (4.182 for the Internal Revenue Service, 1,054 to enforce Obama-care’s mandatory purchase of health insurance.)

SOLYNDRA: The Solyndra scandal is noteworthy not only because it resulted in the loss of $500 million dollars of tax payer money but because it reflects the ideologically based commitment of the Obama government to reflexive support for anything labeled “green”, without common sense financial analysis. It is clear that Obama, who visited the solar panel manufacturer for a “photo op” when the loan guarantee was made, was trying to establish his environmental credibility for political purposes without regard to market based business principles. Romney should constantly remind voters of this financial disaster as part of his own long range policy of mixed fossil fuel development and alternative energy.

IMMIGRATION REFORM: Little has been said so far by either campaign about the festering problem of immigration. It is indeed an issue with potential electoral risks. However, it is certain to come up in televised debates in the Fall. Obama, will generalize the issue and talk about “comprehensive” immigration reform which has long been a euphemism on the Left for amnesty for the 12-14 million illegal immigrants currently residing in the U.S. To this end, the Obama Department of Justice has sued states which have passed laws attempting to deal with the financial and law enforcement issues created by large illegal immigrant populations. Romney will have to address the immigration issue and while noting the impracticality of deporting the millions of illegal residents, he can offer much tougher border control and take a more supportive position with respect to state's efforts to deal with their particular problems. The so called “Hispanic vote” will go to Obama in any event but a fair minded approach to the issue would be beneficial in practical terms and win the approval of independents in border states and beyond.

FOREIGN POLICY: It is hard to discern a consistent “policy” on the part of the Obama Administration in any of the many areas of the world where U.S. interests are important. The Middle East and South Asia of course remain prominent. The war in Iraq has been finally ended. The result is not what was hoped for. This is no surprise to foreign policy analysts who are not part of the political process. Certainly the Bush Administration is responsible for the initial effort to “democratize” by force, a nation divided by powerful sectarian orientations. But Obama was has been committed to the same path. The result has been three additional years of expenditure of billions of dollars, the death and injury of thousands of American military personnel, and the installation of a hostile Shi'ite government seeking support from Iran and under daily attack by the Sunni minority. Romney should be careful not to overtly support the position of foreign policy hawks who believed the U.S. left Iraq too early but it is not clear how Obama's delay in starting U.S. withdrawal benefited American interests.

A similar but more futile outlook remains in Afghanistan. Obama's “policy” is to continue to throw billions of dollars at the corrupt Karzai regime based on a questionable withdrawal date of 2014. This is the continuation of a failed effort to convert a tribal society with little sense of national identification , a medieval religious orientation, and an economy so devoid of the resources necessary for wealth creation that the growth of a middle class necessary for political and economic stability is virtually impossible. Romney will have ample opportunities to offer a different, more common sense strategy and a quicker withdrawal date.

Meanwhile, relations with Pakistan which is a forced marriage of convenience because of its necessary role in the prosecution of the U.S. (NATO) war in Afghanistan, continue to deteriorate. The end of that war before 2014 would do much to relieve the necessity for the U.S. to both support and endure the hostility of the Pakistani population and the inconsistent relationship with the Pakistani government and military.

In general Obama's post 2008 election decision to “extend the hand of friendship” to the Muslim world has been rejected. Although several of the authoritarian Arab regimes have succumbed to the “Arab Spring” movement, the nature of the successor governments is still in doubt and there is little indication that these governments, when they are eventually consolidated, will contribute to regional stability or be cooperative with respect to American interests. While their development is largely beyond U.S. influence, there is little evidence that the Obama Administration has developed coherent policies to advance such interests.

In Syria, besides the usual State Department nostrums that “condemn violence”, there is no U.S. policy, although it would be in U.S. interests for the Assad regime, which is an Iranian client and supporter of the anti-Israeli terrorist groups, Hezbollah and Hamas, to fail.

The Iranian nuclear development program has approached the crisis point as Obama, after three years, has only recently reached the point of applying significantly punitive economic sanctions to bring the Iranian government to possibly productive negotiations. It may well be too late, given the Iranian's decade long strategy of delay and denial, and the Israeli government's belief that Iran's continued progress in hardening the sites of it's nuclear research and development will shortly make a military strike ineffective. Such a strike in the next few months will create a significant military and energy related crisis. Obama will need to make clear to the American public exactly where he stands on this issue but he is not likely to do so, preferring to put such difficult decisions off until after the election.

The Romney campaign will have to be focused, avoid serious gaffes and miscalculations and offer substantive policy alternatives to Obama's three plus years of inconsistency and liberal growth of government. He is at a disadvantage to start with because the Democratic “core” which is less interested in good governance than in it's various special interests being protected is larger than the Republican core. Thus the battle will again revolve around the moderates in both parties and Independent voters. Obama's lack luster support among these groups provide an opportunity for Romney but he will have to conduct a much better campaign than he has in the Republican nomination struggle.

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