If the campaign for the U.S. presidential elections can prove anything, it would be the truthfulness of the old adage saying that people think with their pockets. In my last article on the issue of these elections last week, I said that it is the economy, rather than any other issue, which is going to determine who shall win the race to the White House, come November. Everything I read or heard since then only reinforces my conviction. The latest poll conducted by The Washington Post and the ABC network showed that voters are equally divided between Barack Obama and Mitt Romney, with each commanding about 47 percent of voter support, and the rest remaining undecided. But in truth, this has been the same result in almost every previous poll for a year now. The president suffers from a negative view of the way he has handled issues like the economy, healthcare and immigration, while his rival is seen even more negatively, in light of his past as a businessman, before he went into politics. I feel that the voters are holding Obama responsible for what he had inherited from the administration of George W. Bush. To be sure, Bill Clinton had left behind a surplus of US$ one trillion, but Bush's wars and tax cuts for the rich created a deficit in the trillions of dollars, which Bush then bequeathed to the current president. I noticed that Obama, in his latest campaign tour, started emphasizing this point. He told voters in Ohio to recall what he had inherited from Bush before they judge his performance. Obama would perhaps also do good if he reminds voters that the House of Representatives, which has been dominated by the Republicans since the last midterm elections, has obstructed all his economic proposals – as though wanting to sustain the recession to deny the president the chance to win a second term. Obama said that his administration created 4.4 million new jobs in 28 months, including half a million jobs in manufacturing. This is true, but what happened recently was that the high monthly rate of job creation seen before started to decline in April. The figure posted in May was 77 thousand new jobs, and 80 thousand in June. The economic recovery had begun back in June 2009, but lukewarm recovery meant that unemployment remained above 8 percent (the latest figure I have is 8.2 percent) – which means that the administration's hopes of driving unemployment below 8 percent are no longer realistic. Regardless, there is enormous chutzpah in the way the Republicans have dealt with Obama, as they have blamed him for their own policies, which had led to the global financial crisis back in 2008. Bush had approved tax cuts that only benefited the wealthy, or 2 percent of the people. These cuts expire at the end of 2012, and the Republicans are claiming that if Obama does not extend them, he would be increasing taxes on the American people. This is while Obama insists that he wants to go back to the tax levels under the Clinton administration. The Likud-leaning The Wall Street Journal entitled its editorial on the issue Off the Tax Cliff He Goes, without saying who had built this cliff in the first place. The editorial concluded with these words: “Republicans can win this debate by stressing growth over fairness and jobs over income redistribution". To me, the words above are an admission that Bush's legacy was unfair, and that he had not tried to achieve equality in income distribution among the American people. In all cases, Mitt Romney's track record in business remains the best argument against him. Romney transferred a lot of his wealth abroad to avoid his tax liabilities at home. When he ran companies, he cut jobs, and for this reason, a poll in the states where voters are equally divided between the two candidates has shown that many believe Romney would be unable to create new jobs, and might even cut them further. Four months separate us from the vote. Experts say that the economic situation will not improve much between today and the first Tuesday of November, when the Americans shall cast their ballots. While I am no economic expert, I have a good memory. I thus recall how these same experts had asserted earlier this year that the economic recovery is sustainable, only to be proven wrong with the start of the decline in April. Therefore, they might be wrong once again, and the decline might not continue as they expect this time. I began with an adage and I shall conclude with one. If the experts are to be proven wrong once again, they would be confirming an American piece of wisdom, which is that an economist is someone who tells you what is going to happen next year, and then explains the year after why it did not happen. [email protected]
