It looks like Obama has lost the great Tax Cut Battle.
And with it, he might just win the War – Re-election in 2012.
Right before the mid-terms, the poll that struck me as most interesting was one where 80% of Americans said they wanted compromise. The winner in 2012 will be the politician who claims the middle ground.
And there Obama stood yesterday talking compromise and how the USA was founded on it.
Obama is polling ahead of every major possible GOP opponent for 2012, including the front-runner Palin, who he beats by a huge 12%. And that’s at the moment, with a low approval rating. Fast forward to the election debates. The politician who can claim the other side is belligerent – and who knows the difference between North and South Korea – will be the one who wins office in 2012.
Obama stays on this path, the GOP stays on theirs – and no third party candidate runs and throws a spanner in the works, Obama has his second term.
I was on FBN’s Cavuto last night and the question posed was: would the best stimulus for everyone be that there are no tax hikes for anyone?
For the majority of American economists and politicians, it currently appears too revolutionary a suggestion that since the US economy has expanded for 5 consecutive quarters and that such indicators as charitable giving are now on the rise, that the recovery is secure enough to stop stimulus altogether.
But, at some point in the near (ish) future, the US deficit will have to be addressed. And to deal with the deficit there will HAVE to be a combination of tax rises and spending cuts – no politician has the stomach for the level of spending cuts required without tax rises, it is why even Republicans have been resolutely quiet on exactly how they would implement deficit reduction. Defence, Social Security and Medicare spending will all have to be reduced.
The Bush tax cuts, as I have said before, come from another era. An era where Dick Cheney said: “deficits don’t matter”. Well, deficits do matter. Reducing them, by definition, is deeply unpleasant. Everyone will suffer from the prolifagate spending of the past. It isn’t fair. Yes, everyone should have lower taxes. Unfortunately the numbers don’t add up.
Since in the near future, most of the American powers at be are determined to keep some sort of stimulus in the form of these tax cuts, let it be short term stimulus, an emergency measure, before the job in hand is focussed on – deficit reduction.
Millionaires were up by 8% in the US last year – they don’t need this stimulus. However, in the same time period, the number of Americans living in poverty had their highest ever increase since records began – up to 14.3%. Those earning the least are the ones who need the cash now and will spend it now, thus helping stimulate the economy immediately and sure up the recovery. The rich typically save the money not spend it, as they can – they don’t need this measure to remain and the country can’t afford for it to remain for them.
Wikileaks has not helped America this week. But both Secretary of State Clinton and the chairman of the Joint Chiefs have stated that the deficit itself poses a threat to national security. For America’s – and the world’s – sake, I hope that in the near future, somehow Washington, from politicians to lobbyists and special interest groups, can work together and address this ticking timebomb.
In the short term, Ireland, predictably, will be bailed out by the Eurozone. It has to be. For a significant number of its problems have arisen from being within the Eurozone.
Yes, in the boom years, much of Ireland’s wealth stemmed from its European links. But at present, being part of the Eurozone has been a hindrance as much as a help. Compare it to the UK.
Since 2007 the pound has fallen by nearly 25% against other currencies. Ireland, as part of the Euro, has had to fight the crisis with a strengthening currency. It has not been master of its own economic destiny in the way that the UK has, having had no control over essential elements of its economy such as currency and interest rates.
Short term the Euro will live. But long term I wonder whether the PIGS may bring it down after all. Is economic union possible without political union? I honestly can’t see political union happening in Europe – the countries are fundamentally too disparate. But economic union without it, as the PIGS have proven, is seriously flawed.
Castro recently came out and condemned “QE2″.
Not the boat. But the sinking ship that some are calling the Fed’s recent policy of Quantitative Easing AKA Printing Money. (I do wish that Economists/Accountants/Lawyers would call things by their proper names – they think they justify their existence by making us feel inadequate when they start speaking in their “special” codes).
Perhaps I have always misjudged Castro. Up to this point I had him in the “crackpot dictator” category. Which of course he is, but underestimate such men at your peril and I feel suitably chastened. His views (if they indeed were penned by him) were eruditely put.
Not, however, as well put as this piece of genius. Have a little watch of this: http://www.youtube.com/watch?v=PTUY16CkS-k
It may be a cartoon. But it is no joke.
Whilst at airline security a man from California, enroute to South Dakota for a hunting trip, had what we call in the UK a “strop” (it’s what toddlers do when they’re having a hissy fit and when applied to an adult implies they are somewhat juvenile and pathetic).
It being 2010, the guy taped the whole incident and it’s now gone viral. The Transportation Security Administration, in its defence, has said it tries to be sensitive to individuals, but everyone getting on a flight must be screened.
YES, EVERYONE GETTING ON A FLIGHT MUST BE SCREENED. Is this man trying to win Muppet Of The Year? Quite frankly strip search us all to high heaven if it means we’re not knocking on heaven’s door because a terrorist has blown up the plane we’re on.
The man’s first objection, before the whole “pat down” drama, was about basically an X-Ray machine. The machines will cut down queues (a good thing at airports) and are so not a big deal. They can’t save or print the images. They blur your face.
I cannot even believe this is a topic for complaint. The TSA, which has access to intelligence information that we don’t, is there doing its job to deter terrorists. LET THEM GET ON WITH IT.
George W. Bush is out and about promoting his autobiography, “Decision Points”.
I’ve got a better title for it: “Je Ne Regrette Rien”. Two points of many stand out.
1. Whichever way you look at it, waterboarding is torture. Throughout history, tyrannies have practised the form of torture that is repeatedly bringing someone to the verge of drowning. This is not just a breach of the UN convention against torture, but a breach of the American constitution. An American President doing anything other than condemning torture does nothing for America’s moral authority worldwide.
2. I note that although Bush admitted that he “wasn’t a very good economic prognosticator” (you can say that again), he wasn’t regretting his actions in regards to the economy. This is the man who as well as financial Armageddon happening on his watch, appointed Dick Cheney Vice President. The “deficits don’t matter” Dick Cheney. OH YES THEY DO.
Next time Bush appears on my television set I’m putting him on mute and playing Edith Piaf warbling very loudly over him instead. They’re both saying precisely the same thing.
It was a privilege to be right in the thick of it at Fox last night – on so many levels I’m an outsider and it was fascinating to watch and commentate on how the Mid-term process unfolded.
It is far too soon to be writing obituaries on Obama’s administration – anyone who did that to Reagan in 1982 and Clinton in 1994 was proven very wrong. History will be kinder to the first two years of Obama’s Presidency than the Electorate. History loves lists and Obama’s legislative achievements have not been seen since the Johnson era.
Last night made me recollect my first American History supervision at Cambridge University. Mid-terms, my eminent Professor proclaimed, were a kind of a ritual thrashing for Presidents, who invariably lost Congress to an extent. Most Presidents, he went on, also arrived in office with some sweeping talk about changing the Domestic agenda – but then switched their focus to foreign policy when facing gridlock back home. (Remember Reagan and the Russians etc.).
In textbook style, Obama is off to India on Saturday for a ten day tour of Asia. Make no mistake, Obama’s standing in the world is still impressive. He is more popular in Europe than most of the continent’s own leaders. Under Obama, internationally the US has reclaimed much of its moral authority, which was gravely weakened under Bush with “shock and awe” and the global financial crisis.
Two things have really stood out for me this week. The first is the Stewart/Colbert rally last weekend – 215,000 people turned up to be moderate. And in a recent poll, 80% of voters wanted Republicans and Democrats to work together and compromise in the event of the GOP taking control of one or both chambers.
The Republicans did well at galavanising their support base to get out and vote last night, but they should be wary. I believe that Congress has now swung further to the right than the US as a whole. The Politician and the Party who reclaims the middle ground will be the winners in 2012. If the GOP gets too belligerent, if Obama can look reasonable and blame gridlock on them a la Truman, he will come out ahead and win his second term.
Can Obama compromise? I think he’s already making noises – we saw it in the New York Times interview he gave a few weeks ago. And ask yourself this: who will be more willing to compromise and have a solution even if it’s non-purist – a Palin or Obama? The problem for the Republicans is they don’t have a moderate leader to emerge from the centre. Until they get one, Obama remains in control and victory in 2012 will be his…
… Unless a credible independent such as Bloomberg runs. Then it all gets very interesting.
A debate for another day!
I’ll be talking the mid-term elections tonight on FBN with Cavuto. There’ll be discussion of Republicans, Democrats, gains, losses, international perspectives… But it comes down – for me at any rate – to this.
I do not care who you vote for. However if you are lucky enough to have the vote, you must vote. It is quite simply a moral crime for you not to. In America, universal enfranchisement is still less than a hundred years old. I truly believe that countries such as Australia, where it is compulsory to vote, absolutely have it right. If you dislike the choices, spoil your ballot paper, register your disgust.
In my view, unless you get yourself to a polling station today, you have no right to have an opinion. You think you won’t be making a difference so there’s no point in voting? Well you certainly won’t be if you don’t exercise your right at the ballot box. What you do today will impact not just your hometown and state, not just the rest of the country, but the world.
The world needs America to lead. It is still the world’s only superpower. It still represents freedom in a way that is impressive to all.
So exercise that freedom for those who still don’t have it around the world. Vote.
I was on Cavuto last night and he had a very interesting first segment about some recently released opinion polls: Americans wanted spending cuts but were coming over all NIMBY about them. Cuts were fine as long as they happened to someone else.
Of course this was their response. That is human nature. We’re seeing this very reaction in the UK at the moment now George Osbourne has actually announced how GBP81 billion in spending cuts will occur over the next 5 years. However, these cuts are absolutely necessary for Britain’s long term financial stability and I do believe that the British know that they are. Cameron and Clegg are dealing with a generation of Thatcher’s children – they know tough times are sometimes required for good.
But what of the US? Do American politicians have the stomach – or the mandate – for the level of spending cuts – and tax raises – that the Deficit Reduction Commission will inevitable recommend on December 1st? Because make no bones about it, there is no chance of reducing the US deficit without tax increases and spending cuts together.
I’m not so sure the politicians in the US do. At the moment, it’s all about the election and winning votes, so it’s unsurprising that neither Republicans nor Democrats are talking about specifics. But after, what are we going to have? A gridlocked Congress? Politicians and lobbyists looking out for their own agendas?
Tough decisions need to be made for the good of America. But will they? It’s a worry, and the American people deserve better.
Various Democrats are now campaigning on the tweaks they’re going to make to Obamacare.
From what I understand, it is perfectly normal for any large piece of legislation to be tweaked along the way – and the scale of the law has not really been seen since the Lyndon Johnson era.
But it’s the change in the Democrats’ rhetoric that is fascinating me. They are reclaiming the middle ground. We saw it in the New York Times profile of Obama last weekend. As Congress lurches towards the right, it is the Democrats who are claiming that THEY are the reasonable, balanced ones.
In many of its specifics, health reform is quite popular: for instance the pre-existing condition provision and the 26 year olds on their parents insurance.
The Republicans need to be wary. Yes, they are going to be more effective at galvanising their supporters to vote in the mid-terms. But a result of that will be a Congress further to the right than the American people as a whole. Act too belligerent, get over zealous in their Conservatism in the next 2 years, and the very people who opt out of this election will come out in force and hand Obama a landslide in 2012.