Obama and Romney Ohio speeches: some thoughts

President Barack Obama

More than any other single factor, the deep thinkers tell us, a presidential election is a referendum on how the electorate thinks the economy is doing. If so, President Obama will probably lose.

The U.S. economy is much healthier than the European economy (which, one should note, has tried to address its issues with austerity, similar to the Republican approach), but that may not matter politically. The stock market is up about 50 percent during the Obama years, which is pretty amazing and ought to make Obama popular with the investor class, but doesn’t. We’re going on three years of slow, steady job growth and GDP growth, but the “slow” seems to trump the “steady” in public perception.

The Republican argument is pretty simple. If you don’t like the economy, fire the incumbent and hire – well, you really only have one other choice.

In his big speech yesterday, Obama tried a more complicated argument that could summarized thus:

I inherited big mess, worse than I even realized at the time. The things I am doing are working, but slowly. I know you’re frustrated by the slowness and so am I. But the alternative offered by the Repubs is to go back to the lower-taxes, less-regulation approach that got us into the mess in the first place.

Furthermore, the Repubs want to blame my policies for not bringing the economy back more quickly, but they bear at least some of the blame for blocking the things I’ve been trying to do in the second half of my term, since they gained enough power to block pretty much everything.

It’s not really all that complicated of an argument, but it’s considerably more complicated than if-you-don’t-like-the-economy-fire-the-incumbent. It requires voters to have position on the perpetual argument over Keynesian economics. It requires them to think back at least a far as the Bush (II) administration. It requires them to make a judgment on how quickly a new administration and new set of policies can reasonably be expected to produce a turnaround. It requires them to make a distinction between slow growth and negative growth.

It’s reasonable to wonder whether, in U.S. politics, a complicated argument can beat a simpler one.

Comments (28)

  1. Submitted by Dennis Tester on 06/15/2012 - 10:08 am.

    The simplest argument

    is that the average net worth of the American family has declined 39% since Obama’s been in office. That’s due to under-employment, people who still have jobs are working for less money, but it’s also due to the sharp decline in the value of their homes. Over 40% of people’s homes are still under water.

    Because if you’ll remember, it wasn’t “lower-taxes and less-regulation” that caused this mess, it was the bursting of the housing bubble … created by the democrats in congress who insisted that everyone be given a mortgage whether they could afford one or not. That’s not a republican principle, that’s a democrat policy.

    Obama “audacity” was that he tried to exploit the recession by dumping more than a trillion dollars into his (and Krugman’s) Keynesian experiment that we can now all declare as a disasterous failure and that no one would recall the sequence of events that got us here.

    With help from the press, he at least has a shot at accomplishing the latter.

    • Submitted by Neal Rovick on 06/15/2012 - 11:10 am.

      I hate to burst your bubble, but the 39% decline was measure between 2007 to 2010, with the avalanche beginning in the Bush administration.

      Lower-taxes and less-regulation–what was their role in the current problems?

      Well, also, history shows that the Bush administration and Greenspan pushed through tax cuts in 2001 because ALL federal debt would have been paid off by 2011. So the debt the US had coming into the crisis is their repsonsibility. What a different place we would have been in if we had entered the crisis with little or no debt.

      Less regulation of the financial markets led exactly to the problem of issuing mortgages to those who couldn’t pay them based on the idea that the danger of default could be hedged away through all sorts of dodgy financial instruments. Have you forgotten the name AIG already?

      So once again, the tired old “cut taxes and cut regulations” is trotted forth as the panacea. Eight years of Bush certainly gave lie to that “answer”.

      • Submitted by Dennis Tester on 06/15/2012 - 11:43 am.

        I wish someone would

        explain to me how lower taxes on the people causes a recession. Remember, ALL the people had their taxes cut, not just the rich. It defies logic.

        While you’re at it, explain how less regulation on business is bad for job creation.

        The Left knew that eventually, some day, the sub-standard education provided by their teachers unions would pay huge dividends. This is that day, apparently.

        • Submitted by Neal Rovick on 06/15/2012 - 02:26 pm.

          First of all. lower taxes and unfunded wars lead to deficits and were added to the debt. You know, the debt that “fiscal conservatives” are all fired up about. As a result, instead of coming into 2011 without any debt, we ended up with record debt. We entered the recession with an unnecessary debt.

          Also, with respect to regulation and employment–just look at the employed percentage of the population–it grew steadily from the 50’s onward, in your era of “increasing” regulation. And oddly enough, the employed percentage fell like a rock when GWB came in with his era of deregulation. And oddly enough, the fall has stopped in Obama’s administration.

          See http://research.stlouisfed.org/fred2/series/EMRATIO

    • Submitted by Paul Brandon on 06/15/2012 - 08:56 pm.

      not sure where you got your numbers

      but see
      http://krugman.blogs.nytimes.com/2012/06/15/wealth-destruction/
      for some real ones (graphs even).

  2. Submitted by Neal Rovick on 06/15/2012 - 10:11 am.

    While Americans have a short memory, the balancing question to Obama’s economic performance is whether a reprise of the Bush era represents a step forward.

    Is four years too long for people to remember?

    Why do you think GWB hasn’t really had many public appearances?

    (quote)

    After months of silence, George W. Bush finally weighed on the presidential race — with four short words.

    “I’m for Mitt Romney,” the former president said Tuesday in Washington as the doors of his elevator shut, perhaps his only public statement on the race before the Nov. 6 election. Romney’s campaign doesn’t foresee the 43rd president playing a substantive role in the race. Aides are carefully weighing how much the former president should be involved in the GOP convention — and for good reason. The Bush fatigue that was a drag on GOP nominee John McCain four years ago, and on the country, still lingers, including among Republicans….

    …There’s another risk: Romney linking himself too closely to the former president in any way would give Democrats ammunition to boost President Barack Obama’s argument that his Republican rival would restore Bush-era policies….

    …Behind the scenes, Republicans close to Romney’s campaign say there are no plans to use Bush in a significant way and that the signal from Romney’s Boston headquarters — it’s loaded with veterans of Bush’s two successful campaigns — is that any role for Bush would be minimal at best. The Republicans, who insisted on anonymity to discuss strategy, said Romney’s team will determine, if it hasn’t already, how best to recognize Bush at the party’s national convention in August in Florida, where Bush’s brother, Jeb, was governor.

    Romney’s advisers are studying exit polls from the 2008 presidential election, when nearly three-fourths of voters, or 71 percent, said they disapproved of Bush’s job performance…..

    … Democrats’ central criticism of McCain was that his presidency would have amounted to a third Bush term.

    Of those who said McCain would continue Bush’s policies, just 8 percent voted for McCain; 90 percent supported Obama. McCain carried a substantial majority of those who approved of Bush’s performance. But of the 51 percent who strongly disapproved of Bush’s performance, McCain won just 16 percent….

    http://www.mail.com/news/politics/1290130-role-unlikely-george-w-bush-romney-bid.html#.311202-stage-teaser1-2

    (end quote)

  3. Submitted by James Hamilton on 06/15/2012 - 10:43 am.

    Simple beats complicated every time,

    even when the simple is simple minded. Simple appeals to the gut, complicated to a small part of the brain that requires effort to use. Moreover, an argument based on facts requires that one capture and retain the audience’s attention.

    Of course, the primary problem here is the idea that a president has much, if anything, to do with the state of the economy in the first place. This myth is the basis of both of our largest political granfalloons.

  4. Submitted by Paul Brandon on 06/15/2012 - 10:52 am.

    It can

    But it’s not likely, particularly if the simple argument plays on people’s fears.

  5. Submitted by Justin G on 06/15/2012 - 11:05 am.

    Correlation and Causation

    “the Repubs is to go back to the lower-taxes, less-regulation approach that got us into the mess in the first place”

    Every time I hear the President use this sad statement, I’m reminded of a latin phrase “Post hoc ergo propter hoc” or “”after this, therefore because of this” used by fictional President Bartlett on The West Wing to point out a logical fallacy in one of the first episodes of the show.

    The President hopes we’re stupid enough to buy his assertion that because the financial crisis followed lower taxes and reduced regulations, it must have been caused by those policies. Sadly, many people have bought into this empty rhetoric.

    The fact is that the widely-bipartisan idea that everyone has to own a home is to blame for the financial crisis. Yes, Wall Street types speculated in an insane and irresponsible manner but people on both sides of the aisle created the environment that made that speculation possible by seeking to keep interest rate too low for too long and making it way too easy for people to qualify to home loans. It was classic well-intentioned social engineering at its best.

    As with any huge catastrophe, there were a multitude of factors that played into the financial crisis but if you remove the government-induced housing bubble and the crisis never happens.

    It’s ironic that everyone loves to complain about the lack of bipartisanship these days, but ignore the fact that it was only through bipartisanship that the financial crisis was possible. If the President wants to place blame for the financial crisis, he should spread the blame around because everyone was at fault including Republicans, Democrats and every person that bought a house that they could not afford or thought they’d try to get rich off the housing market.

    • Submitted by Jon Kingstad on 06/15/2012 - 11:45 am.

      Bipartisanship the problem?

      It is but in the “everyone ought to own a home” sense. Bipartisanship between the center-right Democrats and Republicans and right wing Republicans (I think that covers everybody in the House and Senate because there is no real left wing in national political office) starting under Reagan brought us financial deregulation. The 1980’s were one financial disaster after another culminating in the S&L crisis.

      Not having learned from this series of mistakes, the center-right/right wing consensus brought us more deregulation, including opening up the commodity markets to derivatives and other financial instruments. Then we get the dot-com bubble, energy deregulation and the 2000-2001 energy crisis, followed by the housing bubble, which was fueled by Mr. Greenspan’s policies.

      We are here today because of incompetence and ineptitude of historical proportions, and bankruptcy of right wing “free market” ideology. And the giant sucking sound we all heard was the wealth being sucked by the financial elites into their own pockets. That’s your bipartisanship. Don’t blame the millions of people trying to improve their lives for the incompetence of the right-center right leadership.

  6. Submitted by Dennis Tester on 06/15/2012 - 11:14 am.

    This would be like

    after four losing seasons as the Vikings head coach, Leslie Frazier was still blaming Brad Childress for his failures and actually expected to be re-hired.

    Good luck with that argument.

    • Submitted by Neal Rovick on 06/15/2012 - 02:46 pm.

      It is really quite simple minded to think that an economic crisis that had been in the making for decades, and intensified by a final outrageous 8 years of skyrocketing deficits and debts with the addition of an obviously unsustainable and entirely unprecedented real estate boom and an unleashed predatory looting by financial corporation–it really is simple minded to think that the situation could be turned around in 4 years.

      And by the way, have you noted that the rest of the economic world is in the toilet also (and perhaps worse off)?

      Is that Obama’s fault too?

      How’s that austerity program similar to what the Republicans want working out in England?

      (quote)

      Exports plunged 8.6 percent from March, the most in almost six years, pushing the trade deficit to 10.1 billion pounds ($15.7 billion) from 8.73 billion pounds, the Office for National Statistics said today. Construction output dropped 13.2 percent, it said in a separate report.

      The data highlight the vulnerability of the U.K. to the euro-area crisis, two days before elections in Greece that may spark a breakup of the 17-nation common currency area. King said yesterday the case for more stimulus in the U.K. is “growing” and he and Chancellor of the Exchequer George Osborne unveiled measures to help bank liquidity and boost lending.

      (end quote)

      Hmm, “the case for more stimulus….”, not more austerity.

      Or perhaps you can blame Obama for all ills in the world.

  7. Submitted by Lance Groth on 06/15/2012 - 12:48 pm.

    Jefferson

    Well, if the argument Obama put forth is too complicated for the general public (it does include three whole concepts in two paragraphs, after all), and if Jefferson was right that democracy can only exist with an educated and informed electorate, then our democracy is in big trouble.

    The repubs know that and exploit it, because in their view a one party state is just fine, as long as it’s Republican.

    As for the ridiculous notion, endlessly repeated by those on the right, that Obama’s policies have been a disastrous failure while the repub plan would save us all, one need only look to the example of Europe to see what happens with an all-austerity approach. The EU circles the drain ever faster, desperately bailing out state after state (Italy next?), while sticking to what is essentially the Repub plan. The US economy, in contrast, is growing, albeit slowly. Our only mistake was that the stimulus was too small, and poorly targeted. We need to double down, and target the spending better, before it’s too late. But the repubs blocked that, so here we are.

  8. Submitted by Ray Schoch on 06/15/2012 - 12:48 pm.

    Thank you, Mr. Kingstad

    Nicely phrased, and according to most genuine economists, right on the mark.

    Twenty years ago, I thought term limits was a terrible idea. Now I’m increasingly of the opinion that term limits are an essential piece of the governmental puzzle as the nation grows every-larger and wealth continues to flow to the top from those at the bottom and middle. It’s too easy – almost axiomatic – for a decade spent in Washington D.C. to corrupt whatever connection with ordinary Americans someone seeking political office might have had.

    Obama went to Washington as a (very) moderate Democrat, someone with real-world experience with those in the bottom half of the economy, and has been transformed into what we used to call a moderate Republican. A low-level millionaire, but one with occasionally murderous intent overseas, who increasingly relies on advice from corporate business interests at public expense. I’m not an Obama enthusiast, but the alternative represents catastrophe for all but the one percent. Mr. Romney, who’s never had any of that “common man” connection at all, doesn’t even pretend to feel any “noblesse oblige,” as any plutocrat aware of his own society ought to do.

    Mr. Kingstad also seems accurate to me in characterizing the governing coalition as center-right. I’d argue that it’s more right than center, but in any case, he’s absolutely correct that there’s NO left wing in national political office. I don’t think Hubert Humphrey could get elected to anything outside Minnesota now, and perhaps not even here.

  9. Submitted by Nathan Roisen on 06/15/2012 - 01:33 pm.

    Simple beats complex, every time. No argument there.

    I don’t know how the electoral college math stacks up right now, but it certainly seems like the Republicans have the wind at their backs recently, especially given the Walker victory in Wisconsin and the generally stagnant economic news of the last two months. Congratulations to them; they have managed parlay a wave of global pessimism into a neck-and-neck presidential race.

    A word of warning to the conservatives out there: it is, as always, a hundred times easier to criticize those in charge than it is to actually deliver on promises. If the Obama team is right that the economic recovery is, by nature, a slow and painful process because of the depth of the drop and the accumulation of private debt, (and I think they are) then absolutely none of the proposals on offer from Romeny’s team will be in the least bit effective. And if the European example is valid (and I think it is) forced austerity will likely lead to another, deeper recession.

    And in four years we will likely be a poorer, angrier bunch, still looking for the magic rebound. So don’t gloat too much, conservatives. There’s a lot of hard work to be done.

  10. Submitted by Matt Bowers on 06/15/2012 - 02:07 pm.

    Or, it would be like 2008, when Bush and his backers blamed Clinton for the financial meltdown. Republicans still trot out “Clinton did it” whenever they run into a problem. So, yeah, since Republicans still blame Clinton twelve years after his presidency, Mr. Obama is well within his rights to blame Bush only four years later.

  11. Submitted by Peder DeFor on 06/15/2012 - 03:34 pm.

    Simple And Complicated

    It’s only simple and complicated if you frame it that way. For instance, the main point emphasized by Dems in 2008 was that the country was going downhill and Bush was at the wheel. That’s a simple argument. Fast forward four years and you get a similar argument from the Romney camp but that’s not all. Romney is also pointing out areas where Obama has made recovery harder. He is arguing that Obama’s energy policies have leaned too far green and made energy more expensive than it needs to be. He has also suggested that the regulatory uncertainly caused by Obamacare (and overly aggressive executive departments) had made it harder for businesses to get their footing and expand.
    Disagree with him if you’d like but don’t pretend he’s not making them.

    • Submitted by Charlie Curry on 06/15/2012 - 05:17 pm.

      Simple and Complicated

      Mr Defor makes an interesting contradiction to his own argument: “Too green” is a simplistic identification of why energy is more expensive. Other factors include increased global demand, (slightly) better understanding of the cost of not getting stuff correct in the first place – e.g.: BP oil spill, size of the population that is using energy, etc.

      It really isn’t “cheaper” to foist the problems of developing energy off on other sectors of the economy or on future generations. It’s the same quarter-oriented short term result mentality that prevents us from doing a lot of necessary and important things.

      • Submitted by Peder DeFor on 06/15/2012 - 11:54 pm.

        Yes, Too Green

        Obama has consistently worked against developing energy in the US and he has done it largely for ‘green’ reasons. That’s true with the Keystone development. It was true with the Gulf drilling moratorium that went on and on even after his own scientists suggested it be lifted. It’s true with with rising regulations on coal plants. With every trade off presented, Obama has chosen the costlier choice, presumably because of his environmental beliefs.
        And yes, the entire energy sector is complex and I’m not suggesting that a few tweaks from Obama would have brought gas prices down to $1.09. (Though somehow W Bush was responsible for high gas prices in ’04. I guess we’ve learned a lot about economics in eight years!) But that doesn’t mean that we can’t look at actions in aggregate. We keep discovering more and more energy resources under the US. They will be much more developed with Romney in the White House than with Obama.

        • Submitted by Charlie Curry on 06/18/2012 - 03:15 pm.

          “too green”

          Mr. Defor, I think you’ve made my point: if the only way to develop energy cheaply is to push environmental costs onto future generations or to the government, the costs are understated & the price one pays to an oil or gas company/utility is not representative of the real cost.

          BTW – the projects you’ve cited, especialy Keystone, is not stopped dead, but proceeding more slowly. AND some of the outputs of coal are real killers, period. Black lung disease is not just a figment of the environmentalists, and it seems to me that we should be cautious about proceeding apace with new emphasis on coal.

          I used to do some consulting work with energy companies back in the days when developing oil shale and coal gasification seemed like a good idea. One of the things the energy companies themselves found out was that when massive amounts of oil shale are reduced to ash, there is a moderate amount of radioactive material that, although dispersed at safe levels in coal “in the wild,” is a worrisome waste product when one consumes 700,000 tons of raw material per week.

          The point is this: TOTAL costs need to be considered when we develop natural resources, and WHO will pay, and WHO will profit.

    • Submitted by Paul Brandon on 06/15/2012 - 05:32 pm.

      It’s easier

      when you’re not the incumbent and don’t have to defend a record (although Rmoney is trying to tap dance around having invented Obamacare, etc).
      Then all you have to do is be negative, which the R’s are demonstrably better at.

      What made 2008 different was that Bush had started two expensive and unnecessary wars, and introduced an expensive drug benefit to boot. He made himself an easy target by taking some very poor advice that may have profited some people, but not him or the country as a whole.

      • Submitted by Peder DeFor on 06/16/2012 - 12:08 am.

        Negative

        If you really think that R’s are better (even ‘demonstrably’ better) at being negative than I don’t think you’re open minded enough to really convince of anything. I am curious though, why you put Afghanistan in the unnecessary war category. Back in 2001 I had many libs tell me that ‘even Gore’ would have gone into Afghanistan after 9/11. There was very little disagreement with the decision. Very little from congressional Dems and very little from the editorial left. Is there any reason to think that a President Gore wouldn’t have gone in?
        As to the rest, Obama wildly over-promised what he would do in office, both in action and in temperament. His signature achievements were openly written by insurance companies and banks. Cronyism has run rampant under his watch. He hasn’t changed one thing about the culture that he ran against in ’08. If anything he has either embraced it or ignored it and allowed it to fester. He told us he would be better than this and he’s been wildly disappointing. I think that makes him an easy target as well.

        • Submitted by Paul Brandon on 06/17/2012 - 09:34 am.

          Not my point

          Peder–
          Where did I say that ONLY the Republicans were wrong about Afghanistan (‘the graveyard of empires’)?
          I only said that -Bush- had made what was, in hindsight, an obvious mistake. And he knew better; he took office vowing to avoid foreign ventures.
          What happened was 9/11, and a politically unavoidable but ill advised (letting Bin Laden escape in Tora Bora by turning the operations over to the Afghan army) response.

        • Submitted by Jon Kingstad on 06/17/2012 - 02:27 pm.

          Obama “wildly overpromised”?

          I don’t know if I’d agree he was wilder in overpromising what he would do than any previous President but you are right in pointing out that he did not deliver on some of his major promises. For one thing, he backed off on his promise on having a public option in health care, In fact, he backed off even before he put his own ideas on the table. I’m inclined to be more forgiving in his inability to deliver on his promises, except for that one and creating the Simpson-Bowles Commission which unfortunately we have not heard the last of yet.

          Obama was unable to accomplish anything more in his first term, including changing the tone, because the Republicans vowed to make him a one term President before he even took the oath of office. The Republicans have used the filibuster rule in the Senate to make any achievement impossible. I remember reading how this negative tone and nastiness deprived Obama of even any “honeymoon period” which other Presidents have been accorded. So, the Republicans have prevented this President from achieving any of his goals that he was elected to fulfill and now they’re complaining that he’s failed and things aren’t working.

          As far as energy policy goes, Obama has done everything to the favor of the fossil fuel industries. He probably would have approved the Keystone pipeline if the Republicans had not forced him to decide before the EIS was completed (if he had decided the courts would have stayed it and it would have been postponed anyway). The Republicans want to completely ignore the threat of human caused climate change and the window of opportunity for doing anything about it. Unfortunately, Obama is quite happy not having to debate that issue because his policies have done little we need to do to curb greenhouse gas emissions.

          I’m personally surprised that more people don’t see the Republicans as the bullies they are, using unfair and negative tactics of which they continually accuse the other side when they are called on it or stand up to it. I have to ask myself, do people think of themselves as bullies so they agree with these bullying tactics? Or are they blind to them? Or are they intimidated and cowed by them?

          • Submitted by Peder DeFor on 06/18/2012 - 09:15 am.

            Working Together

            A few days after he was inaugurated, Obama met with GOP leaders to talk about the upcoming stimulus bill. He made it clear that he wouldn’t listen to their ideas and shut them down by simply saying ‘I won’. He has tried less than any modern President to work with the opposition party. This is a man who couldn’t work with Olympia Snowe, for goodness sake! Read this:
            http://news.yahoo.com/blogs/power-players-abc-news/frustrated-senator-olympia-snowe-gives-obama-f-101657433.html
            Somehow the lefty blogs missed this story, but Obama never bothered to talk to a Senator that values compromise above almost anything else. Why do you think that is? Would it upset his carefully laid out narrative about those meanies on the other side of the aisle? Keep in mind that the GOP leadership loathed Clinton but they still worked with him. Why is Obama different? He’s different in part, because he has decided that he won’t worth with them either.
            And really, if Obama can only be an effective President with super-majorities in both houses of Congress, then he should stand down and let someone else run for the Dem nomination.

            There is quite a bit else that you either get wrong or ignore. I don’t remember Obama running on a single payer platform but he did campaign specifically against an individual mandate. And no, Obama has not done everything he could for fossil fuel industries. This statement is either ignorance or wishful thinking. He’s been harder on the coal industry than any President in living memory. He has worked against the oil industry, especially in areas of access and pipelines. (And seriously if he had to stand against the Keystone Pipeline because the EIS wasn’t completed, then he isn’t serious about policy.)
            And yes, he wildly over-promised. His whole term has been marked with special interests and companies getting special access. He hasn’t done a thing to change the culture of Washington, even on the Dem side. I don’t know about Hope but there has certainly been no Change.

            • Submitted by Paul Brandon on 06/18/2012 - 12:09 pm.

              Just a couple of points

              Olympia Snowe is not the Senator he needs to work with, since much of the time the Republican leader ship won’t work with HER. She’s just one vote.

              And Obama did not in fact take ANY action (I assume that that’s what you mean by ‘taking a stand’) regarding the Keystone Pipeline since any action would have been premature. If you’re asking him to over ride the whole regulatory system to favor the oil and coal industries, you’re a lump short of a bucket.

  12. Submitted by Paul Brandon on 06/18/2012 - 07:59 am.

    It’s not bullying

    when you’re the one that’s doing it.

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