Showing posts with label economic disaster. Show all posts
Showing posts with label economic disaster. Show all posts

Monday, October 29, 2012

Mitt Romney will have to do more than play Ronald Reagan to Barack Obama's Jimmy Carter

Sadly, this summer Andy Griffith died. Growing up in the 1970’s, watching the Andy Griffith show was simply part of our day. Between episodes of Howdy Doody, The Brady Bunch and Gilligan’s Island, the Andy Griffith Show was just another show where life lessons played out on TV. Together these shows were “Americana” incarnate, where stories about honesty, hard work and community were on display daily.

My wife, who was born and raised in France, recently stumbled across Andy Griffith reruns and decided to record them. She finds them quite entertaining and I’m happy to watch them with her as I find great pleasure in explaining the subtleties of life in the United States that one might not pick up if they did not grow up here.

I often find myself thinking about the 1970’s in a very nostalgic way, which is probably not unusual for anyone who spent their early teens growing up then. Of course from the perspective of an adult the memories of the 1970’s are probably a bit less sanguine. New York City almost went bankrupt in 1975, went black in 1977 and its stories of the Son of Sam and the killing of John Lennon shocked the nation. And things weren’t much better in the rest of the country with lines at gas stations winding around city blocks, labor unrest rampant, and smokestack industries choking… the United States was an economic basket case. By the end of the decade the misery index was at a record high (inflation + unemployment) and interest rates were sitting at 15%. To put a bow on it, the decade ended with Love Canal, Three Mile Island, a coming Ice Age and 52 American hostages in Iran scaring Americans into thinking the world was coming apart at the seams. Things looked dark indeed.

Thankfully, in 1980 Americans threw out the dour and clueless Jimmy Carter after he scolded them the year before:
In a nation that was proud of hard work, strong families, close-knit communities, and our faith in God, too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does, but by what one owns. But we've discovered that owning things and consuming things does not satisfy our longing for meaning....

I'm asking you for your good and for your nation's security to take no unnecessary trips, to use carpools or public transportation whenever you can, to park your car one extra day per week, to obey the speed limit, and to set your thermostats to save fuel....
Carter was right about part of that… for most of the United States’ history Americans have indeed been proud of hard work, strong families and close-knit communities. And a belief in God too. Fundamentally they felt that, in America, anything and everything was possible. Anyone, regardless of their background, could be successful, or could at least work hard and set their children up for success. Why? Because America was, well… free.

In 1981 Ronald Reagan rode in on a white horse and saved the country. More than the tax cuts, more than his building up the military and the breaking the Soviet Union, more than shrinking the rest of government, Reagan made Americans believe again that they could succeed, that they could once again find prosperity and they could once again live in the Shining city on a hill to which he so often referred. Fast forward 30 years and the United States finds itself in a similarly dire situation where the economy is in the midst of an economic malaise, a befuddled president is clueless as to how to successfully direct the nation out of its storms, either domestic or foreign, and a wide swath of the nation feels like the country’s best days may indeed be behind it.



The question is, can Mitt Romney reprise the roll of Ronald Reagan to Barack Obama’s Jimmy Carter? Maybe, but in all reality, Mitt Romney will have to do far more than was ever asked of Ronald Reagan.

Why? Because the borg of government has made success so much more difficult. In 1981 the world was a different place. The EPA had only been in existence for a decade and its budget was $3 billion. Today the EPA has metastasized into a $10 billion octopus that is far more aggressive as it seeks to extend its tentacles to virtually every aspect of the economy from spilled milk to broken light bulbs to the carbon dioxide we exhale. In 1981 our national debt was 35% of GDP and while today it approaches a staggering 110%. In 1981 the federal Department of Education was a mere two years old and played almost no role in education while today it’s a $150 billion a year leviathan that infects schools across the country.

In what is perhaps the most telling illustration of a government out of control, take a look at the laws themselves. In 1981, after 194 years of the Republic, the Code of Federal Regulations (the complete list of federal regulations) was approximately 80,000 pages long. Today, a mere 31 years later Code has more than doubled to 170,000 pages! Every one of those pages, be they focused on employment, school lunches, banking, TV advertising or toys, makes it far more difficult for the nation to pull itself up off of the ground, dust itself off and continue the march to prosperity.

Unfortunately, it’s not just the federal government. States and local governments have grown similarly oppressive, with their obscene union contracts, which land on the shoulders of taxpayers, their onerous regulatory environments, and their abject failure in education combining to handicap Americans in the fight to regain their economic footing. The tentacles of these local leviathans show themselves every day in stories about children’s lemonade stands being shut down, people being arrested for cutting hair illegally, or more painfully, in the students who leave schools poorly equipped to face the challenges ahead.

For most of the country’s history the United States has been one of the freest nations in the world. It was that freedom that helped the United States rescue the world from two world wars, win a Cold War, invent everything from the mechanical reaper to sliced bread to silicon chips, and revolutionize industries from automobiles to spaceships and everything in between. In short, the United States has been the economic engine driving the world’s prosperity for a century. For most of the 80’s the United States was generally considered the third freest country in the world, behind Singapore and Hong Kong. Today, the Frasier Institute ranks it 18, not only behind Hong Kong and Singapore, but also behind such bastions of freedom as Bahrain, the United Arab Emirates, Finland, Chile, Estonia and Denmark.

It was a different world indeed. In 1981 Americans were sufficiently free to shake off the body blows of progressivism and resume that march towards prosperity. By 1984 Ronald Reagan had the economy growing by 7% a year. Today? After experiencing a far less severe recession, Barack Obama has the US economy growing by less than 2% a year. To put that in perspective, growing at 7% a year, it would take you a little over 10 years to double your income. At 2% a year it would take you 36 years. Now expand that to the national economy and you see the difference freedom makes.

The country is certainly a different place than it was when Andy Griffith was keeping the streets of Mayberry safe from pick pockets or settling disputes between feuding clans. It’s also a different place from the one Ronald Reagan inherited in 1981. While Americans may no longer be tethered to a telephone hanging on the wall or stuck getting their news or entertainment from a newspaper or television, those new freedoms and choices pale in comparison to the freedoms and choices lost in terms of their own economic opportunities. At the end of the day it’s great that you can get the latest football scores or watch YouTube videos on your iPhone, but at the same time it’s far more difficult to start a business to pay for it or keep a job to pay for the house you live in.

In order to help lead the country out of the economic abyss that Barack Obama and a quarter century of progressivism has plunged us into, Mitt Romney will not only have to be Ronald Reagan, he will have to be something more as well. He will not only have to reawaken the American spirit of possibilities, he must play the role of Alexander in the face of the Gordian Knot of government regulations. If he can accomplish those twin tasks by the end of his first term, his reelection campaign should be a simple one: “Are you better off today than you were four years ago?” A successful Mitt Romney should be able to hear a resounding, enthusiastic, unambiguous yes from everywhere in the country, including the little town Andy Griffith based Mayberry on, Mount Airy, North Carolina.

Monday, January 16, 2012

Rick Perry should harness an imploding Europe to define his message to GOP voters.

It is said that history is written by the victors. In the case of the 2012 election it’s hard to see how that’s even possible given that with the current trajectory of the GOP primaries we’re all going to end up losers.

Rarely does it occur that choices and consequences of government policies are so starkly presented for an electorate as they are today. Unfortunately, I’m not talking about the GOP field as an alternative to our big government president.

Today, the national debt stands at approximately $15 trillion, or almost $50,000 per American citizen. $4.6 trillion of that debt was run up under Barack Obama. That exceeds the combined amount of debt accumulated by every president from George Washington through the first George Bush. Everyone knows that too much debt is a bad thing. Even Candidate Barack Obama knew enough and told us on the campaign trail:
The problem is, that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents, # 43 added $4 trillion by his lonesome so that now we have over $9 trillion of debt that we are going to have to pay back, $30,000 for every man woman and child. That’s irresponsible. It’s unpatriotic.
So what George Bush accomplished in eight years, Barack Obama has accomplished in three. And it's only going to get worse. By Candidate Obama’s rationale that must make President Obama über unpatriotic.

Well, the President will tell you that the policies behind that spending were necessary to save the country from a depression and are finally beginning to bear fruit. He’d point to December’s unemployment rate that dropped to 8.5%, from a peak of 10.1% in November of ’09. As the fourth best president in our history, he’s obviously doing something right.

Or maybe not… When Barack Obama took office the population of the United States was 306 million and there were 186 million people working with an additional 14.9 million people looking for work, resulting in an unemployment rate of 7.4%. (14.9 million / 201 million) That 201 million is called the Workforce and it’s the key to understanding unemployment numbers. Workforce is defined as the following:
Total number of a country's population employed in the armed forces and civilian jobs, plus those unemployed people who are actually seeking paying work.
Today, three years after Barack Obama took office the population has grown to 312 million but the workforce has actually shrunk from 201 million to 199 million. That means that despite adding 6 million people, the number of Americans working or actively seeking work has dropped by 2 million. Add to that the 4 million working age new Americans and you have a total of 6 million more people not working or even looking since Barack Obama took office. That’s how you get to 8.5% unemployment; you get people to stop looking for a job in the first place. He’s definitely doing something, but it’s not good. Nor is it unprecedented.

The big government policies that Barack Obama is shoving down American’s throats are this very day showing themselves to be utterly unsustainable a mere 5,000 miles away. Within the last week S&P downgraded the debt of nine (9) European countries, including EU giants France, Italy and Spain. The Euro is on the brink and the economies are disasters. If that were not bad enough, unemployment in Europe is so high (10% overall and 9% in France, 14% in Ireland, 18% in Greece and a whopping 23% in Spain) that a continent already unable to replace itself is shrinking even faster as an increasing number of its citizens emigrate to seek jobs elsewhere. In Greece the economic problems are so bad that parents are now abandoning babies and children at hospitals and churches across the country.

Which brings us back to the American election of 2012. The big government policies of Barack Obama are bringing the train wreck that is Europe to our shores. Unfortunately, the candidates leading the GOP charge to unseat him are little better, despite their protestations to the contrary. They claim to be conservatives, but they are not. They are big government advocates, just less so than Barack Obama.

Even more unfortunate is the fact that the only candidate in the GOP field who actually has a record of pursuing small government policies is seemingly unable to articulate those ideas to the average voter. If that candidate, Rick Perry, is to have any chance at all to resurrect his campaign he will have to do something dramatically different and he’ll have to do it soon. He should drop the oafish Bain Capital attacks and instead focus in a laser like fashion on smaller government. That is the one issue that every American can relate to regardless of age, sex, race etc. The rapacious nature of government must be demonstrated in a way they understand. In South Carolina, where the NLRB just tried to kill a Boeing plant, that message should resonate particularly well.

And how should he do that? With PowerPoint of course. PowerPoint might be a stretch, but not by much. The image of a burning Europe with its big government economies in ruin, double digit unemployment, rioters in the streets and babies abandoned on the sidewalks makes a perfect foil for the big government policies of both Barack Obama and the rest of the GOP field. Those are the kinds of images that voters can relate to because they see more and more of them on our own shores. And of course PowerPoint would come in handy when trying to remember what agencies to cut…

It would be a shame if when the history of the 2012 election is written Rick Perry is reduced to a 53 second footnote. Particularly because that means that some big government advocate won. Despite how damaging that sub one minute episode was, it need not be fatal to his campaign, but the time is getting short. With only 2% of the delegates decided, Rick Perry still has an opportunity to resurrect his campaign and maybe change history. His only hope is to harness the power of what Americans clearly don’t want, which is on such brilliant display right across the pond. With the images of Athens on fire, London under siege of by rioters and Naples covered in trash, even the least engaged voter can understand the correlation between big government and economic ruin and social failure. It’s up to Rick Perry to figure out how to make that case. If he does he has a shot at winning. If he can’t he’s destined to be a footnote in American political history.