Posts Tagged ‘US elections 2012’
Tags: Barack Obama, Democratic Party, economic policy, Mitt Romney, Paul Ryan, Republican Party, US elections 2012
Tags: Barack Obama, George Bush Jr., John Maynard Keynes, Keynesianism, Milton Friedman, Mitt Romney, monetarist economics, Paul Ryan, Republican Party, supply-side economics, US elections 2012
Mitt Romney recently announced in Norfolk, Virginia that his vice presidential running mate is Rep. Paul Ryan of Wisconsin.
ABC News reported on the elaborate measures taken by the Romney campaign to keep the decision under wraps until the right moment. The report (http://abcnews.go.com/blogs/politics/2012/08/how-mitt-romney-and-paul-ryan-tricked-the-press/) read: “Mitt Romney decided on Paul Ryan on Aug. 1, the day after returning from his trip overseas to the Olympics in London and to Israel and Poland. The candidate and his campaign kept the secret for nine days, according to campaign sources. Romney and Ryan met secretly on August 5th, after the decision had been made and just before Romney submitted to round-the-clock coverage by reporters who had been traveling with him.”
Ryan is known as a fiscal ideologue who is in favor of spending cuts to reduce the government budget deficit. He is respected within the Republican Party for his economic acumen and is considered by many as a key party leader. Romney’s choice of Ryan as running mate reportedly energized party activists.
The choice of Ryan is considered by many to reflect the fundamental truth underlying the 2012 US elections: “It’s the economy, stupid!” Both the Republican and Democratic parties must answer voters’ queries on immediate prospects of the sluggish US economy beset with unemployment since the start of President Obama’s term.
Ryan tangled with President Obama repeatedly in the past over proposed budgetary allocations for the Medicare program (the so-called ObamaCare). The Wisconsin representative believed that Obama’s allocations were not sustainable given substantial US budget deficits.
Notwithstanding these public deficits, Ryan follows the lead of several Republicans since the late 1970s to propose cuts in tax rates, especially for upper income individuals and corporations. This suggestion is counter-intuitive and must have some solid theoretical backing.
During the late 1970s, the Western countries dealt with a new phenomenon–‘stagflation’–the coexistence of high prices and stagnant economic growth. It was theorized previously that these cannot happen simultaneously–that inflation sets in only during full employment and that recession dampens prices. This was the Keynesian consensus at the time.
Keynesians ordinarily prescribed increased government spending (and sometimes tax cuts for ordinary consumers) to get out of economic slowdowns. For this reason, Keynesians are called demand-side economists. On the other hand, monetarists or so-called supply-side economists, led by Nobel Prize-winning economist Milton Friedman of the University of Chicago, believed the key policy tool is the control of money supply to control inflation, that is, tighter money leads to lower prices. They also believed that artificial market imperfections such monopolization by trade unions of labor markets, capital controls, and excessive government regulations should be dealt with since they raise wages, interest rates and overall prices.
Supply-side economic policies were adopted by President Ronald Reagan during his first term in the early 1980s. The situation then was similar to current conditions: tax cuts were proposed for corporations and upper income individuals amid US deficits. The reasoning: corporations did not invest as much so the economy could grow because of excessive tax rates and regulations. The tax cuts were adopted but the deficits did not decrease; in fact, they increased.
The clarion call then was deregulation. Government should stop regulating and interfering in the economy and allow market forces to work freely.
However, it was not to be a simple binary choice. One policy program does not exclude the other. When the big US financial institutions started to go under in the aftermath of the 2007-2008 housing crisis, the US Congress at the urgent request of President George Bush Jr. approved a $700 billion bail-out program for the Wall Street banks as well as General Motors and Chrysler. Alienating many within his ‘Main Street’ constituency, President Barack Obama had to maintain the program. In many instances, Obama was accused of being soft on the banks, considered by many to be responsible for the financial crisis. The five biggest banks were recently allowed to settle lawsuits over practices that forced millions of American families from their homes(see https://www.commondreams.org/headline/2012/02/09-5).
Our historical discussion shows that political leaders cannot be held captive by their ideologies. They may be forced to adopt policies that work, pragmatic policies that is. Should Romney and Ryan get elected in November 2012, I will be very interested to see if their ideology survives its first brush with reality.
Tags: Barack Obama, Ed Miliband, Israel, Jerusalem, London Olympics 2012, Mitt Romney, Prime Minister David Cameron, United Kingdom, US elections 2012
Mitt Romney is considered by most survey respondents so far to be very weak in foreign affairs relative to incumbent President Barack Obama.
He decided to do something about it by travelling to the United Kingdom and Israel; the United Kingdom being the Americans’ closest ally in the North Atlantic Treaty Organization (NATO) and Israel, the most reliable friend in the volatile Middle East.
Did the visits help? Based on reports, it looks like they did not.
When he met British Prime Minister David Cameron, he pointedly asked if London had the capacity to host the 2012 Summer Olympics.
What was he thinking? That he can do a better job, having managed the 2002 Winter Olympics in Utah?
For Mitt’s information, the Summer games are bigger with more events and athletes than the Winter edition.
Some Brits rightfully complained: Hey Mitt, isn’t your plate full enough? You are already standing for the presidency; you still want to run OUR Olympics?
You think that’s the end of it?
Mitt is just beginning!
When he met Labour Party leader Ed Miliband, Mitt called the latter “Mr. Leader”. Technically, Mitt was correct because Milliband led the Labour Party. I am sure however that Milliband want to be called by his Christian, rather than generic, name.
Perhaps, Mitt’s aides heaved a sigh of relief as their jet left Heathrow for Tel Aviv.
Mitt was just warming up.
In Israel, Mitt espoused the thesis that cultural difference was the reason why Israeli GDP was twice that of Palestinian GDP.
Sub-text: Palestinian culture is inferior to Israeli culture. Since culture defines a people, then Palestinians are inferior to Israelis.
Of course, he won a lot of brownie points with the Israelis but obviously not with the Palestinians.
A survey commissioned by the Begin-Sadat Center for Strategic Studies (BESA), the Bar-Ilan University Center for International Communication and the Anti-Defamation League revealed that Israelis generally trust Republican presidential candidate Mitt Romney more than current US President Barack Obama, according to the Jerusalem Post.
But Mitt’s remarks might not be a mistake after all because Jewish-Americans and the so-called Israel lobby are formidable political forces in the United States.
The liberal press back home pilloried Mitt as a racist and a bigot and for failing to recognize that continued Israeli occupation of Palestine had adverse effects on Palestinian productivity. The conservative press, meanwhile, praised him for supposedly telling the truth.
Later, Romney recognized Jerusalem as the capital of Israel in a round-about manner. The Jewish state has long maintained that Jerusalem is its capital city, a claim that is contested by Palestinians and the international community. The claim also runs counter to U.S. policy. Most nations, including the United States, have their embassies in Tel Aviv.
Romney made Jerusalem a campaign issue. In his latest ad, the voice-over intoned: “[A]s President, Barack Obama has never visited Israel and refuses to recognize Jerusalem as its capital, Mitt Romney will be a different kind of president, a strong leader who stands by our allies. He knows America holds a deep and cherished relationship with Israel”.
Contemporary Republicans are either prone to gaffes or have strong convictions.
My personal favorite remains the party’s 2008 candidate for vice president Sarah Palin, who was governor of Alaska.
When asked about her foreign affairs acumen, she proudly declared that she had a lot.
Asked to elaborate, she explained that Alaska is separated only from the Russian Federation by the narrow Bering Strait.
The state capital of Alaska is the city of Juneau where Governor Palin held offices, is tucked near the eastern pocket of the Gulf of Alaska and is adjacent to northern British Columbia. Juneau is hundreds of miles from the Bering Strait.
Her house in Wasilla, Alaska is further inland and does not give one a regular glimpse of the Russian homeland, a requirement she apparently allows one to claim a respectable foreign affairs resume. If she stayed and held offices in Nome, then perhaps that would do the trick. Crossing the Bering strait into Russia might also exercise immigration officials on both sides.
And that, folks, may be the sum of Palin’s foreign affairs expertise!