Guest Post by Brad Barth
President Obama entered office with a mandate to change America, with a strong majority of his supporters hoping for major health care reform and a strong majority of the country hoping for major Wall Street reform. President Obama proceeded to push and pass major health care and Wall Street reforms, which jointly yielded the emergence of the Tea Party movement. Republican legislators have since been motivated by a libertarian vision of limited government, which profoundly conflicts with the vision on which President Obama was elected, thereby severely inhibiting legislative progress in either direction.
Legislative stagnation persists during our heretofore slow and fragile recovery, with no apparent end in sight to the strategic and ideological inconsistencies between the two visions. President Obama is unlikely to concede, for two reasons. First, because seeking compromise is unlikely to be productive: by ramming through transformative laws during a recession, he spawned a passionate opposition, which – for Republican legislators – made voting for an Obama-approved bill about as wise as buying a Greek bond. Second, because he genuinely believes in his vision for the country: like many Americans who share his political orientation, our President believes that more closely aligning our social and economic structures with those of Europe will yield a higher quality of life for Americans.
Republican legislators are also unlikely to concede, for two similar reasons.
First, because – as mentioned – a press release announcing a Republican congressman’s support for an Obama-approved bill is tantamount to a press release announcing that congressman’s retirement from the House. Second, because the European sovereign debt crisis has – for many Americans – further legitimized the economic libertarian argument compelling Republican legislators to limit the scope of government.
In the meantime, two types of opportunity costs compound every day that the federal government’s policy structure remains unreformed. The first type is the cost of needlessly remaining less economically competitive than we should be (the most obvious examples are simple reforms to the tax code, in order to make employing people in the United States more attractive to firms, until which time millions of Americans needlessly remain unemployed). The second type is the cost of needlessly remaining more financially vulnerable than we should be (the most obvious examples are simple reforms to entitlements, in order to make our sovereignty less reliant on the bond market, until which time trillions of dollars are needlessly being added to our unfunded liabilities).
Given that this is the state of our union, we, the American electorate, are left to contemplate the most plausible post-election scenarios, in order to identify the course of action most likely to result in the necessary turnaround of America – making us more economically competitive and less financially vulnerable.
One plausible scenario includes the re-election of President Obama. As mentioned earlier, under this scenario there is no evidence that he will concede his vision to make America more like Europe, which would be unproductive on two levels: first, because there is no evidence that Republican legislators would cease to passionately oppose his efforts to make America more like Europe, and second, because there is no evidence – based on the state of affairs in Europe – that making American more like Europe is a good idea.
A second plausible scenario includes the election of Senator Santorum. Under this scenario we might consider what evidence there is that Senator Santorum’s experiences have prepared him to lead the necessary turnaround of America. He was a lobbyist, then a legislator, and then a lobbyist again, which unfortunately offers us no evidence that he can lead this turnaround. In addition, given the recently disappointing consequences of failed bipartisan leadership, we might also consider the likelihood of a social activist president resulting in a liberal movement akin to the Tea Party, which would threaten us with a symmetrical version of our present legislative stagnation.
A third scenario includes the election of Governor Romney. Under this scenario we might consider what evidence there is that Governor Romney’s experiences have prepared him to lead the necessary turnaround of America. He was the leader of two large companies, the leader of the Olympics, and the leader of a state:
*At one of those companies, Bain & Company, he was brought in as CEO at a time when the company was facing a financial crisis. Within one year, he led the company through a turnaround and then turned it over to new leadership.
*At the other one of those companies, Bain Capital, he acquired over 100 businesses, many of which were failing or distressed. He and his team
successfully restored many of them to financial health and learned how American businesses compete around the world.
*At the 2002 Olympic Games, Governor Romney was brought in as CEO at a time when the Games were running a nearly $400 million budget deficit and had been badly damaged by allegations of bribery involving top officials. By the time the Games were put on, he helped turn the nearly $400 million budget deficit into a $100 million profit, and the Games were deemed the most successful ever.
*In the State of Massachusetts, Governor Romney was elected at a time when the State faced a $650 million shortfall and a projected $3 billion deficit for the next year. He balanced the budget every year he was in office, cut taxes 19 times, and before the end of his first term the State had a $700 million surplus (again, given the recently disappointing consequences of failed bipartisan leadership, we might consider that Governor Romney accomplished all of this with an 85% Democratic legislature).
May we, the American electorate, adopt the course of action most likely to lead to the necessary turnaround of America.
Mr. Barth lives in Salt Lake City, UT with his wife, Brittany. He works in investment banking and earned degrees from the University of Utah and the London School of Economics.