Wednesday, October 24, 2012

“The Ascendency of Mitt Romney”

Sydney M. Williams

Thought of the Day
“The Ascendency of Mitt Romney”
October 24, 2012

The world loves an optimist, but the optimist must be a realist. In his wrap-up statement at Monday’s debate, Mr. Romney spoke of his belief in his country and its people, but he also spoke of the necessity to right America’s sputtering economy and to reduce its deadening debt.

Our primary system is flawed. As the New York Observer noted in their editorial last week endorsing Mitt Romney, primaries “reward strident rhetoric and hyper-partisanship,” so that “candidates tailor their messages to fringe elements in small, unrepresentative states.” Growing up in New Hampshire, I take some exception of that description of my home state, but agree with the thesis. However, one has to admit that despite this “flawed” system, with its heightened partisanship, it did produce the most moderate and electable candidate. Would Republicans be so close to potentially electing the next President if the candidate had been Michelle Bachman or Rick Santorum?

Voters must differentiate between what is said by a candidate to secure the nomination from what is their true philosophy. For Mr. Romney that was easy, in that we he had a record. Maureen Dowd, in my opinion, is just wrong when she writes in this morning’s New York Times: “Mitt may have made so many compromises to get the prize that he doesn’t have a true sense of self anymore.” We have his experience and ability to reach across the aisle as Governor of Massachusetts, as well his success managing the 2002 Winter Olympics in Salt Lake City. We know of the experience he gained in managing Bain Capital, and of the compassion and dedication he showed as a leader in his church. We can fault candidates for misleading the electorate, as the New York Times is wont to do when their favored candidate is at risk, but must understand that deception is common to both parties in primaries – and sometimes not just in primaries! On the other hand, newspapers like the Observer, the Washington Post (which has not endorsed either candidate at this point) and the Orlando Sentinel (which has endorsed Mr. Romney) have the capacity to place in context comments made during primary contests. At this point, what is imperative is to elect a President who will put ideology aside and focus on the imperatives of reviving the economy and repairing the nation’s balance sheet. Mr. Romney, in my opinion, is that man.

There is no issue facing the United States as critical as our fiscal mess. For four years we have run deficits in excess of a trillion dollars. That suggests an enormous mismatch between government’s revenues and outlays. The problem did not originate with Mr. Obama, but it has worsened considerably under his watch. We must first determine what we want government to provide. Then there are three steps that are necessary. Most importantly, the economy needs to be rejuvenated. Spending curbs must be imposed. Tax revenues must be increased.

When politicians talk of cutting spending, it is important to remember they are not talking of spending less next year than the year prior; they are speaking of reducing the automatic increases in spending. Politicians find it easy to give, but almost impossible to take away. It is the reason why the term “third rail” has been assigned to any attempts to reform Social Security and Medicare. It accounts for the brutalization by Democrats of Paul Ryan when he attempted to raise the issue. Yet, if we do not address the long term costs of these programs they will either go bankrupt, or they will be funded by greatly depreciated dollars. The latter seems most likely, if nothing is done. But there are some relatively easy solutions to at least get a start that Mr. Romney and Mr. Ryan have recommended, such as means testing and gradually increasing the age of eligibility.

An improvement in the economy will automatically increase revenues, but that alone may not be enough to offset the spending gap. Baked into the DNA of Congressmen and women is a gene that causes them to spend any additional funds that come over the transom. The most proven way of jump-starting the economy is to streamline regulation and simplify the tax code, both ideas that Mr. Romney has proposed.

But it is possible that revenues may have to increase at a rate higher than the natural increase that comes from an expanding GDP. Two alternatives for raising tax revenues have been offered. Mr. Obama has proposed raising taxes on those making more than $250,000 – what he calls “millionaires and billionaires.” Mr. Romney has suggested lowering nominal rates, but then reforming the tax code in such a way to limit deductions to something, for example, like $17,000 on high income earners. Despite Mr. Obama’s objections, that would be meaningful. Average deductions on incomes above $250,000, according to the IRS for the tax year 2008, were $137,000. Limiting deductions, despite lower nominal rates, would certainly increase the amounts paid by the wealthy.

The advantage of raising tax rates on high-income earners is that it is relatively easy to do; as such a tax would affect only 2% of wage earners. The negatives in doing so are that the very wealthy, those like Warren Buffett, have the means of hiding income, thus the tax increase would not have the desired affect. Additionally, thousands of small businesses file as individuals, thus any tax increase would negatively impact hiring by thousands of small businesses and, consequently, economic growth. Europe pays for their welfare societies by means of a VAT, which is enormously regressive, but which is where we will be headed if we do not curtail the path we are on.

The greatest benefit awarded Mr. Romney from the recent debates was not the failure of Mr. Obama in the first debate; it was the opportunity for Mitt Romney to showcase the fact that he is not the extremist, cold-blooded, woman-hater that mainstream media has presented. Millions of voters who get their news from network television, CNN and MSNBC, and the New York Times were exposed for the first time to an obviously intelligent man who is not the immigrant-hating, war-mongering anti-feminist person he has been portrayed. Mr. Obama looked outright silly claiming that the sober and cool Mr. Romney would provide “wrong and reckless leadership” and that he was a man who had “never offered the right opinion.” At the last debate, as the Washington Post put it, Mr. Romney began “by striking an elevated tone – only to encounter an aggressive and slashing opponent.” Such condescending aggression may work in Chicago, but it does little in terms of successfully working with Congressional leaders from across the aisle, as we learned from Mr. Obama’s failed attempts over the past four years.

While there is no question in my mind as to which man would be best for the long term interests of the United States, I am not a fan of Mr. Romney’s trashing of China and his accusing them of currency manipulation. It strikes me as a case of the pot calling the kettle black. There are few countries that have been as aggressive as the United States in artificially keeping interest rates (and thereby the Dollar) at extraordinarily low levels. In the almost four years Mr. Obama has been President, the Dollar has declined about 7% – a regressive tax on consumers. However, as Mr. Romney noted in Monday night’s debate, both in relative and absolute terms, the U.S. is more important to Chinese exporters than is China to U.S. exporters. So we do have some leverage, but trade wars should be avoided at all costs.

Other than a declining sense of personal responsibility and what Victor Davis Hanson has referred to as a nihilistic attitude toward federal debt, social issues in my opinion take a decidedly back seat to financial concerns. It makes no sense to me to save every spotted owl on the planet if we allow Social Security or Medicare to go bankrupt. There are some pretty basic problems that need to be addressed and solved before we go tilting at windmills or being seduced by solar panels. It may be that Mitt Romney will not be able to address what is a very difficult situation, but there is no question that four more years of Mr. Obama’s policies will result in a deeper and darker hole.

There are some who feel that we have not been presented a great choice for November 6. Again, I disagree. Does Mr. Romney reflect all of my wishes? Of course not. But does he represent a considerable improvement over the incumbent. I answer that with a resounding yes. An enormous quantity of debt is weighing unfairly on future generations. Unfunded entitlement programs risk turning our nation into a Greece. Our economy risks descending back into recession. Confidence in government has eroded. Partisanship has become heightened. The sunny optimism which is so characteristic of our nation is hidden behind a curtain of pessimism.

Mr. Obama’s election four years ago represented a great turning point in our nation, as I wrote last week and as I wrote four years ago. Every re-election is a referendum on the work performed by the Administration in power. If their performance merits retention, we should keep them. When it does not, we should try something new. Three Presidents in the post-War period have not had their contract renewed by the electorate – Gerald Ford, Jimmy Carter and George H.W. Bush. All were considered good and honorable men. But all exited the scene early because things were not working well. When such is the case, it is not only our right, but it is our obligation to try someone new. This November is such a time.

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