Well, the election is next Tuesday, so I figured I would try to lay down some of the arguments I have for and against each one of the two guys running this year. I guess this exercise is more for my own records because it will be interesting to go back few years down the road and see how my opinion has changed overtime.
Naturally I’m inclined to favor liberal ideas on social and monetary policy, thus I’m predisposed to like Mr Obama. That said, I think there are a whole slew of more rational arguments one can make for and against the current president and his challenger. I’ll try to break down a few aspects of each one’s platform and analyse pros and cons of those.
Deficit and Monetary Policy
While Obama can’t tout his record for fiscal prudency he also is able to justify these shortcomings. Inheriting an economy in a free-fall, there was not much he could do but to spend money in order to plug the gaping hole in demand that was created by the credit bubble. There are disagreements as to how that money could have been spent but another depression was averted. I wish Mr Obama provided some sort of credible plan of how he plans to reduce the deficit in the medium term, while propping the economy in the short run. Obama, unfortunately, never laid out any specific platform of what exactly he is going to do for the next four years. I wish he did.
When it comes to Mitt Romney, however, the story is even worse. Huge tax cuts are at the core of his platform, while his plans on how he wants to pay for them are conveniently vague. Eliminating deductions from the tax code is a great idea, but mathematics don’t seem to add up in this one. In the light of that I can understand why Romney is not giving out any specifics. One reason is that upsetting certain constituencies has some real electoral consequences; the risk he would not want to take. Second reason is the fact that it gives him an ability to argue that math here actually does work; it’s easier to argue with very vague assumptions rather than putting specifics on the table. I do understand that whatever he proposes will get modified 20 times over in the congress, but it would be worthwhile to provide some specifics to the voters because it will give them an idea about what his agenda actually implies. Bottom line is: most independent economists argue that it is mathematically impossible to administer those tax cuts, not increase burden on low/middle income classes and reduce the deficit at the same time. In the light of that, the centerpiece of Mr Romney’s platform is a bunch of bull.
As a pretty progressive person, this part of Romney’s platform is not even anything I would contemplate a lot about. While Romney is probably a moderate at heart, his party dragged him so far to the right that his social policy positions (like stance on abortion) alone are enough to make me never want to vote for the guy. The current social platform of GOP is something that should have been abandoned 500 years ago and the fact that so many people are still pushing these ideas is indeed scary.
Obama is pretty cautious about his stances on social issues, but at the very least he is moving in the right direction.
This is the part where both candidates leave me wishing for a third alternative. It seems like any kind of talk of reducing military spending due to absence of any feasible threat is not even being discussed anymore. The only real difference in the stance of Obama and Romney on foreign policy is how much they want to spend on defense budget with Romney wanting to increase it beyond what the defense department is actually asking for. Knowing a few people who have actually worked on defense contracts, I have a slight idea about how much waste there is in the system. Increasing the spending will just cause more of the same wasteful spending that could be used for things like research or education.
Regulation and Commerce
Here, I actually believe that Romney could, in fact, be more competent than the president. There is a decent amount of red tape that was put in by Obama administration, which according to experts is useless. Obama also supports unionised labour, which, in my opinion outlived its usefulness. Romney has worked as a consultant and probably does understand business better so I do think he would be better suited in regulating regular businesses. There are caveats here though. One caveat here is environmental regulation, which Romney seem to think is not needed. To be fair, outside of putting up a requirement for fuel efficiency, Obama has not done much to halt the effects of global warming (he did invest a lot of money into green technologies, but this is not regulation). Second caveat is regulation of financial institutions. Majority of Romney’s big donors are investment banks like Goldman Sachs and Meryl Lynch – the same guys that got us in the hole we are currently in. He wants to repeal Dodd Frank and never specified what it would be replaced with. In my opinion we would be better off if things like derivatives and credit default swaps were banned altogether. Unfortunately, neither one of the candidates will do anything remotely close to this, but Obama is more likely to go in the right direction.
Entitlements are one thing that will deal with us unless we deal with it. Due to that, Romney’s plan seems more credible to me that that of Obama. No matter how much we dislike it, we have to come to terms with the fact that, unless we tax everyone at some astronomical rates, we will not be able to afford the current level of Medicare spending. Turning Medicare into voucher system might not be the best idea but, at least, it deals with the problem. Obama has proposed $700 billion reduction in payments to the hospitals, but this money is not going to be saved, but given to Obamacare. Beyond that, the amount that the government spends on Medicare is going keep getting bigger.
Romney has actually said that the state of Arizona could be the model for the nation. He also likes his “self-deportation” approach of making immigrant life so miserable that they will leave. He never talked about streamlining visa process and lifting red tape for educated immigrants. Enough said.
Romney: being severely socially conservative and running on the plan that resembles wishful thinking, I would not expect much good to come out of Romney’s administration. The “5 Point Plan” the he is running on is not really a plan but a set of, at times vague, goals. A plan would be a more concrete description of how those goals are going to be achieved. Romney used to be a consultant but his current behavior cannot be further from what behavior of a real consultant would resemble. I’m a consultant as well and, if on an assignment, I told my client “You need to cut costs”, I would expect to hear something like “Thanks, Einstein we already knew that. We need you to tell us how to do that”. How he is going to do that is precisely what Romney’s “plan” lacks. This, on top of the fact that current Republican party seems to be falling off the cliff of sensibility and reason, makes Romney look like a poor choice to me.
Obama: while there were a few things to be disappointed about (like president’s inability to work with the congress or perhaps sub-optimal use of stimulus money), I think Obama deserves re-election. His proposed policies make way more sense that those of Romney. Taxing the affluent in order to pay for things like research, education and infrastructure is something that every nation does, while America has essentially regressive tax system. I wish he was more aggressive in dealing with the fiscal problems and pursuing other parts of his rhetoric. Given the options, however, there is no question about who I would support.