Obama Changed The Conversation About What Ails The US Economy – The Debate is Not About His Bad Record As Economic Steward – It Is All About His Fight For Fairness – Absent a Positive Economic Message From The Republicans, Expect Obama To Get Re-elected

By Paolo von Schirach

November 7, 2011

WASHINGTON- President Obama may not get re-elected. But, so far at least, he has managed an extremely clever political come back. Instead of defending his poor record as mediocre (at best) steward of a sick US economy, he managed to reshape the unfolding political campaign narrative as a fight between the rich and the impoverished middle class that he staunchly defends. here is the new take. Obama is standing by the vanishing middle and the poor. He really wants to do more for them. He has plenty of jobs programs, great legislation ready to go. We should only agree, as a nation, that the rich, who have gotten so much richer in recent years, should pay the bill. This would be only fair, says Obama, who morphed from president of the United States who is supposed to run a country to “Tribune of the Aggrieved  People Fighting For Justice”.

Obama: the problem is that rich Americans do not want to pay

Of course Obama knew in advance that the Republicans would object and that they would block all his “jobs” legislation in Congress. But this is precisely the objective. The goal here is not pass anything, but in creating an emotional political issue that will ignite some passion within the dispirited Democratic Party base. Nothing better than telling them who the enemy and the cause of all this suffering really is: the rich.

Obama can go into the general election next year claiming that he has a plan; but the mean spirited Republicans, the political agents of the super rich, derailed it. If Obama manages this stunt, and my hunch is that he will, “the real issue” in front of the voters next November will not be, as it should,  Obama’s dismal economic record. The “real issue” will be the need to redistribute income in America. If we re-elect Obama, we could have public programs that could hire millions of unemployed Americans. But we have to elect Democrats in the White House and in Congress, so that they will make the rich pay. 

The real issue is lack of growth

And so, rather brilliantly, Obama managed to change the story, at least so far. In a more sober environment, thoughtful people would agree that America’s most fundamental problem is not income disparity but slow growth and the progressive erosion of US international competitiveness. In other words, the US pie does not grow. The economy stagnates and thus it is good bye to higher middle class income and easy upward social mobility.

Well, no, Obama tells America that the real problem, at the same time an economic obstacle and a moral disgrace, is the extravagant income inequality which has gotten worse in the last two or three decades. And so this is the issue at hand and the problem that needs to be corrected by voting for Obama in November 2012.

Obama does not defend his poor record, he attacks the rich, and the strategy works

It is  rather amazing that Obama managed to change the topic and the entire flow of the national conversation on what needs to be on top of the political agenda. But I think that politically he did well and that this populist  concoction may actually stick. It resonates. The somewhat disjointed Occupy Wall Street Movement in a rather confused way is premised on the same basic point that Obama is making: just 1% of greedy Americans, very much like a medieval times European feudal aristocracy, have stolen our lunch. And so we are the dispossesed 99%. The business at hand is to force the evil 1% to give back the stolen assets. To do this, no better way than re-electing Obama. 

Opinion polls indicate that income disparity is rated as a key issue

So, this is Obama’s take. And the American public, confused as it may be by this crisis that never ends, is buying it. Large majorities in opinion polls indicate that there is way too much income disparity in the US and that the rich should pay higher taxes. Of course, nobody would care to tell them that even the total confiscation of all the ill gotten gains of the greedy 1% will not solve the basic American structural problem: anemic economic growth.

Obama talks about a real issue, however this is not the central problem 

Look, what Obama says about an alarmingly high degree of income inequality in America is true. And it is a real issue. It is unhealthy for a society like America, predicated on openness, fairness and access to all, to show that in fact the game is somehow rigged and that you no longer have much of a chance to get into the big leagues because the well connected rich gamed the system and amassed huge fortunes by ripping off all of us.

Still, while some of this is quite true, this is not the main issue. The main issue is lack of growth. A somewhat weaker and less energized America has been hit badly by globalization. Many sectors are no longer competitive, while the “system” has generated few new areas in which the US is still world class. Outside of Information Technology, in fact, hard to name any.

Disoriented Republicans do not have a compelling message

While Obama changed the conversation and started his fight in his new role of protector of the Poor and of the vanishing Middle Class, the Republican Party looks disoriented. In Congress it has of course the power to block Obama’s legislation. But this is hardly a winning strategy. As I said, Obama is counting on this opposition, so that he can run against it.

The real problem is that the Republican Party lacks a message of hope and genuine inclusiveness that can truly resonate with Middle America and with minority voters. Its blueprints to reform the welfare state, even the serious ones like Paul Ryan’s budget proposal, have been dismissed as mean spirited attacks against the elderly and the very fabric of US cherished social programs.

GOP base seeking only conservative candidates with ideological purity

To make things a lot worse, right now the hard core Republican base is enthralled with rather stupid ideas of conservative radicalism. And this is what we see when looking at opinion polls taken among Republicans regarding their preferences within the current group of candidates running for the party White House nomination. The “base” would love a true, genuine super conservative hero who would come along and recreate the ancient Yankee splendor. And so they love Herman Cain who says all the right things, even though he is clearly ignorant on policy and has zero political experience. (His fortunes may change if the damaging allegations of sexual harassment that have just emerged somehow will stick).

Romney ignites no passion

Mitt Romney, the centrist candidate, does not electrify the “base”. And so he is looked favorably only by about 20 to 22% of Republican potential primary voters. All this may change, and quite soon. If Cain implodes, because of his lack of substance, and because of his personal issues related to revelations about sexual harassment, Romney may be the candidate, after all.

But Romney lacks the passionate conviction that propelled Ronald Reagan in 1980. Obama has now become the left wing populist fighting for justice. This clearly resonates with millions of Americans who are once again told that there is a free lunch and that it in fact moral to demand it. The government will do things for you. Vote for us and we shall make the the rich pay the bill. This is the Democrats’ clever message, disguised as moral righteousness. What is Romney’s battle cry? Hard to tell.

Republicans need an inspiring political platform 

The challenge for the Republicans and for Mitt Romney, assuming he will be the last man standing, will be to counter Obama’s unabashed populism with something positive and inspiring. But if the only thing the Republicans have is their pledge never to raise taxes under any circumstances, this is a rather sorry looking platform. Absent a more inspiring GOP message, you can count on  Obama’s Robin Hood promises, as misguided and deleterious as they are for the long term health of this nation, to carry the day.

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