THE TROUBLE WITH ROMNEY… A FAILED ECONOMIC PHILOSOPHY.

September 23, 2012 by · Leave a Comment
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 ADAM SMITH.

 

 

 

 

 

 

 

 

ADAM SMITH’S IDEA THAT THE INVISIBLE HAND THAT REGULATES MARKETS MAY WORK BUT IN EXTREMES WHEN POWERFUL INTERFERENCES BY NON NEUTRAL FORCES INTERVENE THINGS GO AWRY.

The trouble with Romney is that he holds the same beliefs that the Republicans brought in with Ronald Reagan, but he can’t say that because of the disastrous results of those policies culminating with George W. Bush. Thus he has no new ideas to run on and the old ideas based on Milton Friedman’s extreme belief that free markets would always balance any inequities were disproven once and for all under George Bush. Even Federal Reserve Chairman at the time, Alan Greenspan, a true believer, was flummoxed by the free market’s failure to correct the mortgage and derivatives bubble and prevent the meltdown.

Did Bush juice up the economy by cutting taxes? No. Did he create a better economy and make a more stable life for Americans? No. Did he make the World safer by the judicious use of military power? No. Did he head off terrorist attacks that intelligence sources said were imminent before 9/11? No. Did he foresee the  mortgage/Wall Street crises in the face of a growing bubble and make corrections before the economy imploded? No. Did he lower the National Debt which was on track to becoming zero before he took office? No. Where is he in this election year?  Hiding, because he is a liability to the Republican campaign. Thus Romney has no Republican record to run on.

However Romney is now trying to get elected on double talk he would be a better manager of the economy and foreign policy without any specifics.  Bush ran after a Democratic President had achieved outstanding economic growth during the Nineties; paid down the debt and held government spending in check including defense spending. But Bush won by a suspect Supreme Court decision authored by a cadre of Republican appointed justices. Gore, the Democrat, was the likely winner.

Now Romney can’t seem to connect with a broad cross-section of America needed to win the election. His words lack sincerity, he has misspoke numerous times, he has sequestered his tax returns. His wealth hangs like a dead dog around his neck. He is ambiguous as how he would achieve prosperity for the majority of Americans and provide economic safety for the aged, disabled and children. What his foreign policy would be is any one’s guess but probably it would be similar to that of Bush.

He threw 47% of Americans under the bus in a speech that was only supposed to be heard by wealthy donors, yet was secretly videotaped by a wealthy donor and released to the media. If that was the case one wonders how solid his alleged radical base really is.

He nominated Paul Ryan to be his Vice Presidential running mate. Ryan has alienated almost every segment of society except maybe the Koch brothers.  Ryan is against woman’s rights, wants to eliminate Medicare by a phony voucher system, has alienated the Hispanic vote and almost all other segments of society except the Tea Partiers and the super rich.

Yet Romney plows on attempting to win an election by going back to failed economic policies of the past. We know that free markets don’t regulate themselves. In the most recent financial disaster the alleged free market was run by Wall Street. Someone always is dominant in a market unless the government makes sure all players are treated equally and then there are still inequities.  Adam Smith and the other  classical economists were  great economic and political thinkers but  free markets only exist in theory because all markets are regulated in some degree and as said not always by neutral forces and often the invisible hand that is supposed to balance out for the greatest public good is required to destroy a market that is too far out of balance . The truth of this  bears witness in all the financial crises since the beginnings of capitalism.

Romney’s only hope is that he can buy the election with the backing of large donations and the Super PACs. Yes, money can win elections but there is a point of diminishing returns and he is past that point.

Romney’s Achilles heel is his own lack of sincerity which is based on his own lack of belief in the Republican mantra of the last twenty five years; low taxes on wealth, reduction of spending on entitlements, increased spending on defense and less government regulation of Wall Street and business in general.

He is running on a failed philosophy of government and lacks the ideas and the courage to say how he would correct those failures and resuscitate the Republican philosophy

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INTERESTING ARTICLE ON HISTORY AND INFLUENCE OF CONVENTIONS

Politically Uncorrected

By G. Terry Madonna & Michael L. Young

DATE:9/10/12- Please find below the most recent Politically Uncorrected ™ column, jointly authored by Dr. G. Terry Madonna and Dr. Michael Young. In this column, Madonna and Young provide an analysis of the importance of past national conventions. Madonna is Professor of Public Affairs at Franklin & Marshall College, and Young is a former Professor of Politics and Public Affairs at Penn State University and Managing Partner of Michael Young Strategic Research. Madonna and Young encourage responses to the column and can be reached, respectively, at terry.madonna@fandm.edu and drmikelyoung@comcast.net .

This column can be found at http://politics.fandm.edu

CONVENTIONAL WISDOM – CIRCA 2012

Let’s say it clearly. The Democrats had a good convention, one clearly reflected in a respectable post-convention bounce – the Republicans, not so much.

Not that the GOP had a really bad or a dreadful convention. In truth, it had its moments. As conventions go, however, mediocre would describe it best. It wasn’t the worst and certainly wasn’t the best.

But the really interesting question is whether it matters that one party had a solid convention while the other party’s convention was merely so-so. Will it alter the outcome of the presidential race?

While many modern conventions of both parties have been uniformly dull affairs, long forgotten by Election Day, historically some party conventions have mattered a great deal.

The record suggests, in fact, that conventions are much like vice presidential choices. A “bad” or controversial V.P. selection can hurt a ticket as happened to Democrats, for example, in 1972 and Republicans in 2008. But a “good” V.P. choice almost never matters in the outcome of the election. The exception probably was Lyndon Johnson in 1960. He helped John Kennedy capture Texas’s vital electoral votes.

Something similar seems to characterize party conventions. “Bad” ones can inflict serious, sometimes fatal, damage on a party and its presidential aspirants. But “good” ones seem to matter much less in terms of their ultimate impact on the November election.

Numerous examples exist of damaging conventions in each party. For Democrats the most recent if not most egregious “bad” convention was the 1968 edition held in Chicago. There the party, amidst rioting in the streets, fist fights on the convention floor and acrimonious debate among delegates, nominated a fatally damaged candidate (Hubert Humphrey) who went on to lose to Richard Nixon in November. Democrats staged an encore convention four years later in 1972 when a badly divided, poorly managed party nominated George McGovern. He eventually lost by one of the most lopsided tallies in modern times.

For Republicans their most recent “bad” convention was 1976. Wounded by lingering residue of the Watergate scandal, the Nixon pardon and split between Ford moderates and Reagan conservatives, the GOP barely managed to nominate an incumbent president. The result was a nail biter victory by Jimmy Carter in November.

An even better example was the bitter nominating struggle the Republicans had in 1964 at the Cow Palace in San Francisco. Conservative icon Barry Goldwater won after a raucous convention that split the party so badly that Democrat Lyndon Johnson won the presidency in November by landslide proportions.

The pattern exhibited in these relatively recent elections also manifests itself in presidential elections at least as far back as the Civil War. Several examples will suffice to illustrate the pattern.

The first dates back to 1860 when Democrats met for their Charleston convention, only to adjourn in deadlock unable to nominate a candidate. This contentious convention led to a split of the party into northern and southern wings, each of which eventually nominated different candidates at later conventions. Most historians believe the Democrats schism contributed significantly to the outbreak of the Civil War. It also guaranteed the election of Republican Abraham Lincoln.

Almost 40 years later, in 1896, a tumultuous convention struggle over the gold standard and populism led Democrats to reject an incumbent president (Grover Cleveland) as well as most of his economic policies. Their convention thrown wide open, Democrats then chose the youngest man ever nominated by a major political party, William Jennings Bryan. He went on to lose narrowly to William McKinley in one of the most dramatic elections in American history.

But perhaps the most famous example of a party convention gone awry occurred in 1912. This time it was Republicans battling the forces of party discord. A raging battle between incumbent William Howard Taft and former president Teddy Roosevelt ripped the GOP apart at their Chicago convention. The Taft forces eventually renominated their candidate, but the outraged Roosevelt bolted the convention with his supporters to run as a third party candidate. The Republican split led to Democrat Woodrow Wilson’s victory in the only election in American history in which an incumbent president came in third.

What if anything does this history forecast for 2012?

Certainly, nothing like the convention calamities portrayed above happened this year. Republicans may not have had a great convention but it wasn’t disastrous either. And American history suggests it is the disastrous ones that matter most.

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THE DEMOCRATIC CONVENTION 2012: SUMMING UP: PARTY IS UNITED BEHIND RE-ELECTING BARACK OBAMA AND JOE BIDEN. POLICIES OF THE OF THE FIRST TERM WILL BE CARRIED FORWARD TO CREATE PRESIDENT OBAMA’S VISION OF AN EGALITARIAN SOCIETY.

September 9, 2012 by · Leave a Comment
Filed under: Barack Obama, Obama 

 DEMOCRATIC VISION FOR THE FUTURE OF AMERICA

 

Unlike Mitt Romney who is struggling to keep the base of the Republican Party from fracturing into sub groups of moderates and radicals, Barack Obama has his party solidly behind him. Romney had to swallow the bitter pill of nominating Tea Partier Paul Ryan  as vice Presidental running mate,  a man at opposite poles of the policies he endorsed as Governor of Massachusetts, a blue state which elected a Republican to Ted Kennedy’s Senate seat. It is the only real indication of what he will be as a president if elected. Thus he sacrificed his chances of moving towards the middle and capturing more of the woman’s vote, the Hispanic vote and the more moderate independent vote which he will need to win this election.

Barack Obama had none of these problems and the convention unfolded smoothly and rationally with strong speakers who defined his qualities as a husband, father and a leader, and laid out  his accomplishments so all that was left was for him to state was  the policies that he would  follow to create his vision of a future of America.

DEVAL PATRICK AND EZIZABETH WARREN

Deval Patrick, black Governor of Massachusetts, gave a powerful speech on what it means to be a Democrat  in America and what needs to change.

Then came Elizabeth Warren, a Harvard professor, running for the former Senate seat of Senator of Ted Kennedy now held  incongruously by a Republican. She is a long time consumer rights advocate and eloquent proponent for the Dodd-Frank Wall Street Reform Consumer Protection Act. She also spoke powerfully in behalf of woman’s rights as well as consumer rights.

DEFINING THE MAN AS A HUMAN BEING

Michelle Obama spoke with eloquence and passion about the qualities of her husband as a man, a spouse and the father of their two girls Malia age 14 and Sasha age 11. She also described the passion he held for the American people, not just the well off but for the middle class, the poor, the disenfranchised, America’s children, the disabled and for all Americans even the wealthy. It was a moving speech.

REBUTTING THE REPUBLICAN POLICIES LINE BY LINE

The piece de resistance of the convention was the  speech given by former President Bill Clinton. He gave the Democrats answer to the proposals made at the Republican convention and particularly those of Paul Ryan which were full of misstatements and the twisting of facts. He particularly noted that Ryan had a “lot of brass” for criticizing President Obama for Medicare adjustments he himself had previously proposed. He took the Republican policy proposals apart by using “arithmetic”  and facts, figures and logic to show how they had been tried over the last 30 years and would fail again. On a lighter note he noted after listening to Michelle’s speech on the previous evening he reflected how one could not but  reelect a man with the good sense to marry her.

DEFINING  PRESIDENT OBAMA AS A LEADER

Joe Biden’s speech added to Michelle’s speech by defining Presidential Obama as a man of   the courage and vision to make the most difficult decisions and to make them after reasoned debate among his advisors.

Biden said he always put the welfare of the American people first even if what he had to do at times was politically unpopular. In effect it was a reasoned, stirring endorsement of the leadership qualities of Barack Obama.

THE PRESIDENT: POLICIES AND VISION.

That left the final speech for President Obama which had to be held in doors instead of a stadium as original scheduled because of rain.   He again gave a resounding speech using his impeccable rhetorical skills and logic to define his vision of the future and the policies that would get us there. He spoke of universal medical care to create a healthier America, more educational opportunities for the young to help America forge ahead in the 21st Century, paying down the debt by balancing spending and taxation and in general strengthening the middle class along with business while providing a safety net for the poor, disabled and elderly. Policies in the long run that would result in jobs, profits and prosperity for all.

In the end the Democrats presented a united front with all sides in full agreement on policy issues that would allow America to continue as the leader of the world in the 21st Century and not return to unfettered pre depression capitalism, but improving on the capitalism that was reformed and improved by the New Deal, Fair Deal and the Great Society Programs that made us the leader of the 20th Century. Now the challenge is not from Communism or Socialism but Capitalism managed by a communist dictatorship vying for a preeminent economic position and thus power and political status in a new world.

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THE GOP CONVENTION 2012: SUMMING UP: SCHISMS REVEALED: POLITICS OF POLARITY CONFIRMED.

 CONDOLEEZZA RICE SPEAKING AT GOP CONVENTION: AT LEAST SHE WAS RATIONAL BUT HER CRITICISM OF DEMOCRATIC FOREIGN POLICY AND CLINTON’S EXECUTION RANG HOLLOW. BEST SPEAKER THOUGH.

The GOP convention ended with a whimper not a bang. Mitt Romney was the last speaker and his speech was vague and full of meaningless slogans. Toward the end it turned jingoistic with veiled threats to Iran and Russia.

Nowhere in his speech were the nuts and bolts of specific steps he would take to achieve the broad policies he spoke about. Mainly improve the economy by cutting spending, cutting taxes and to take a stronger stance against perceived foreign enemies. Internally on a social basis we know he is against gay marriage, abortion, and other issues like gun control and for reduction of Social Security, Medicaid and Medicare. However he has flip flopped on these issues depending on whom the audience was and where he was speaking.

We know that his Vice Presidential nominee has taken positions on these issues quite different from his apparent stands. This was not reconciled nor was the party platform stance on these issues which are quite different from his reconciled at the Convention. This leaves vast schisms in the party yet to be healed. For instance the platform makes no distinction between abortion for incest or forcible rape. Would that be a no legal abortion situation?   Will he follow the party platform, Paul Ryan’s stance or his own statements made from time to time that there would be an exception for those situations.

RYAN’S MISSTATEMENTS

Ryan says he will save Medicare from The Affordable Health Care Act which he contends will take over 700 billion from Medicare. (Seniors would get the same care under the AHCA so this is another false issue). Yet he is on record as stating that he is in favor of a limited voucher system for seniors on Medicare. This means apparently they would buy health care through a private plan.  Independent analysts estimate that it would cost an additional $6400 per year for a senior to obtain the same benefits they are now getting.  The average Medicare recipient is on a yearly income of $22,000 dollars. Obviously this is not a solution but a ruse to end Medicare in order to lower taxes on the wealthy.  If it is such a great idea why doesn’t he try it out on Congress before he takes it to all seniors to see how they like it? Of course the answer is obvious; the Congressional health plan is so far superior to Medicare as it is presently constituted or Ryan’s voucher plan he would be laughed off the floor when he proposed it. But the fact remains what’s good for seniors ought to be good for Congress.

Ryan’s emotional speech had many misstatements of fact like the innuendo that he was a working class kid who pulled himself up by the bootstraps. In fact he is the beneficiary of a trust based on the giant Ryan Construction company set up by his grandfather. He was a Congressman at 22 that dosen’t happen to a poor working class kid. He is worth many millions of dollars as is his wife who inherited $5 million.  Both are lawyers. He is not  mega rich like Romney but at least Romney made it himself.

Another misstatement, if it was a misstatement, was that somehow President Obama was responsible for the closing of the Janesville GM plant. Records show that this plant was destined for closure under President Bush and while Ryan was the Congressman for the Janesville district. If anyone bears responsibility it is Bush and himself. When President Obama took office he fought for policies that came too late for the Janesville plant but saved much of the entire United States Auto Industry including G.M.

Ryan’s speech was full of misstatements like he came up the hard way,  Obama was responsible for The Janesville plant closing or the biggest one of all: he and Romney would fix Medicare with vouchers.

THE CONVENTION WAS A TRIBUTE TO THE POLITICS OF POLARITY

The convention was merely a meeting of the radical wing of the Republican Party to introduce up and coming radicals and to announce a foregone conclusion that Romney and Ryan would be the nominees.

The policies that would be followed are the same ones that George W. Bush followed: cut taxes on the wealthy by reducing government, limit government regulation, engage in fruitless foreign wars as a method to increase unfunded defense spending and in general starve government by creating huge deficets.

HISTORICAL ECONOMISTS SAY STUDIES SHOW IT TAKES SIX YEARS  TO RECOVER FROM A FINANCIAL RECESSION.

Bush’s policies led to the current financial crisis which competent economic historians estimate will require at least 6 years for the country to recover from. This is based on research on financial crisis over hundreds of years where there are reliable records. This appears to be correct in the current case since the mortgage crisis which precipitated the problem still has over a million mortgages a year adjusting to new rates that drive the underwater mortgagees into foreclosure. Five years from 2008, the period when most mortgages will stop readjusting, is 2013 thus that is when we will see a general economic recovery and when new construction activity comes back.  Construction activity is one of the main drivers of the economy.

Thus the convention was a confirmation of the GOP politics of the past and sharp political polarity. Polarity even within even in the GOP. This  reminds one of Lincoln’s famous quote taken from the bible: “A house divided against itself cannot stand, Mark 3:25.”

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