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James Marshall Crotty

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Obama Has Won Almost Every Policy Argument, But Could Lose on Topicality

Posted: 09/05/2012 8:07 pm

Obama Dnc Speech

2012-09-06-emptychair.jpeg

In policy debate, we have this term called topicality. You can win every single argument in a debate round, but, if your affirmative case is not topical (that is, within the strict definitional boundaries of the resolution), you lose.

Barack Obama faces a topicality conundrum this November. Faced with a national resolution calling for immediate and effective answers to our expanding debt, lukewarm jobs growth, anemic GDP, ballooning entitlements, and costly first-ever credit downgrade that - regardless of the other culprits -- occurred on Mr. Obama's watch, the President has fixed his rhetorical gaze elsewhere. That is, he has not been topical.

And Tuesday's speeches at the Democratic National Convention only confirmed that Mr. Obama and his party have chosen to move the debate off those key economic issues that swing voters care most about to issues of concern to the President's fervent share-the-wealth base.

In the President's defense - and what liberal doesn't welcome external blame for personal failure -- he was dealt a tough hand by both parties. The housing crisis - born of the myopic, if politically correct, loose lending mandates of the Community Reinvestment Act (or CRA), greedy home buyers who took out loans they knew they could not afford (and lied about their assets on mortgage applications in order to do so), overzealous brokers, collateralized debt obligations (CDOs) to protect banks from CRA-mandated risk, for-profit rating agency failure to properly vett and rate those CDOs, and, naturally, Too Big To Fail (an Occupy Wall Street obsession, but only one of many causes of the ensuing financial crisis).

Though the housing market collapse and resulting economic debacle was as much a consequence of liberal loan orthodoxy as lax Republican oversight, the facts on the ground were undeniable: extraordinarily high unemployment, a Great Recession, and a foreclosure tsunami.

Continuing with the Democratic mantra of You Didn't Cause It, You Didn't Build It, and You Can't Fix It, Mr. Obama was also handed two wars (Iraq and Afghanistan), and a no-win political football in Gitmo (as intractable in its way as the thorny stalemates with Iran, Syria and North Korea). Moreover, Obama was forced to work with a right-wing government in Israel not particularly amenable to Mr. Obama's historic outreach to the Muslim world (a prime inspiration for "the Arab Spring").

On the upside, Mr. Obama had a Democratic Senate and House at his back for the first two years of his administration.

By most objective measures, Obama did an admirable job in his first term. He got U.S. job numbers headed on a firm, if slow, upward trajectory. He brought U.S. troops home from a deceitfully sold war in Iraq. He passed meaningful, if not perfect, health care reform. He adroitly offed Bin Laden. He helped end the wiggy reign of Muammar Gaddafi. He cooly told Israel's codependent paper tiger, Bibi Netanyahu -- whose bellicosity is enabled by billions in yearly U.S. aid to Israel -- where he could stick his settlement strategy. He put education and the environment back on the front burner of public policy, where they should forever remain. And he ended the egregious "Don't Ask, Don't Tell," and -- after much hemming and hawing -- "came out" in support of gay marriage, despite opposition from many of his homophobic black preacher backers. All spectacularly worthy accomplishments for the first term of any President.

The only problem for Obama is that, as admirable as these accomplishments are, by the end of his first year honeymoon, they were no longer topical. The resolution on the table in year two of the Obama presidency was no longer Iraq or Afghanistan, or even the financial crisis (most of the heavy lifting on that issue had been done by former Treasury Secretary Hank Paulson during the waning days of the G.W. Bush Regency). The resolution that most concerned the American people in early 2010 was the fiscal solvency and economic future of the nation itself.

Unfortunately, just as G.W. Bush cynically used 9/11 to justify his preordained war on Iraq - further deepening our preexisting debt and entitlement crisis - so too Obama used the financial crisis to advance a preordained agenda on health care, alternative energy loans, tax breaks, and subsidies, wage, job, and pension protection for members of public employee unions, and amnesty for select illegal immigrants (or "dreamers," as they are misleadingly re-framed by open-border Dems). Worthy objectives in many quarters, but not what the 2010 resolution called for.

I am sure that Mr. Obama thought that his preordained agenda would neatly, if miraculously, dovetail with the larger national demands for jobs, a balanced budget, robust economic growth, and entitlement reform. Mr. Obama no doubt assumed that any kind of stimulus, no matter where the money was directed, would, even if dropped as cash from the sky (as Paul Krugman famously argues in a paraphrase of a former Fed chairman), grow jobs and the economy. Even the Pelosi-crafted, pork-riddled stimulus bill would invariably, by Obama's logic, bring more money into the federal coffers, thereby postponing the debt and entitlement crisis for another administration, or at least another "grand bargain" come December.

As we all know now, miracles didn't happen with the Obama stimulus. And Mr. Obama knows that you aren't usually reelected telling brutal economic truths to the American voter.

Unfortunately for Obama, such economic truths are now inescapable. Moreover, the American people are showing a surprising appetite for truthtelling. In fact, many are basing their November ballot decision on which candidate is not only candid about these economic truths, but who can best explain how he plans to tackle them in earnest.

The hard inescapable truths are these:

1. The Obama-Pelosi stimulus did not give the economy the much-needed lift-off that the President hoped when he promised unemployment below 6%;
2. U.S. Fed Chairman Ben Bernanke - whose quantitative easing has been the greatest source of market and job growth during the Obama presidency - recently said that U.S. job growth is likely "stuck in the mud."
3. 110 million Americans received a welfare benefit in 2011, mostly food stamps and Medicaid. This number is far higher than at the peak of the financial crisis in 2008. This outrageous statistic is leaving swing and independent voters scratching their heads. If the President has dramatically grown private sector jobs and the economy, as he and his surrogates fulsomely claim, why are substantially more Americans receiving a handout on his watch than when he started? Moreover, if he is serious about reducing entitlement spending, why is he dramatically increasing the number of Americans who receive welfare? I don't have a Nobel prize like Mr. Obama and Mr. Krugman - who must be deploying some complex Ivy League math to explain about how expanding the welfare state grows jobs and a self-sustaining private sector - but, to a simple, run-it-up-the-gut Cornhusker like me, the President's logic is puzzling.
4. 50% of Americans do not pay any federal income taxes. Meanwhile, the top 10% of wage earners pay 71% of all federal income taxes, even though they earn 43% of income. Moreover, the bottom 50% of earners pays 2% of income taxes, though they earn 13% of total income. This is about as "progressive" as a tax regime can get. In the minds of many swing voters and small business job creators, it's positively draconian.
5. Our debt as a nation is now 70% of GDP, much higher than when Obama entered office. At the height of the Great Depression, when FDR's outsized stimulus spending was at its peak, the debt was 46% of GDP. Among developed nations, the U.S. debt to revenue ratio is now second only to Spain and Ireland. And you know how those two countries -- and other government-dominated Euro economies -- are faring.
6. ObamaCare will cause spending on health programs to grow from more than 5% of GDP today to nearly 10% of GDP by 2037.
7. At the current Obama spending rate, the debt will be 200% of GDP by 2037, with a true future fiscal gap estimated to be around $222 trillion.
8. Meanwhile, Dodd-Frank barely addresses Too Big To Fail. Our banks are estimated to be $50 billion short on meeting new capital requirements as dictated by Basel III.
9. The major buyer of U.S. debt is China, our largest economic and military competitor.

Those are the uncomfortable facts, friends. The key facts of this election. However, you won't here much about them this week in Charlotte.

What you will hear is Mr. Obama's trite remedy to all that befalls this country's economy: increased taxes on those villainous "millionaires and billionaires." No doubt, many of these villains run small businesses, which are widely credited with creating around 70% of new jobs. No doubt, many of these small business job creators report their business income on their individual tax returns. And no doubt a few of these villains make money off their equity and bond portfolios, just like the millions of working class and middle class Americans and assorted retirees with money in 401K plans and other retirement accounts. That uncomfortable fact has not stopped Mr. Obama from calling for radically increased taxes on income from interest, dividends, and capital gains, which will hurt every single one of the 54% of Americans with money invested in the stock market.

And here's the kicker: Mr. Obama's taxes on "millionaires and billionaires" will do nothing to grow jobs, let alone GDP (and will likely stymie both). Mr. Obama knows this. It is why he littered his stimulus bill with tax cuts, however meager; he knows they work, though he is politically reticent to admit it.

Moreover, he also knows that his increased taxes on "millionaires and billionaires" won't make a sizable dent in the deficit. By most generous estimates, Mr. Obama's dramatically increased taxes on the normal income, dividends, interest and capital gains of "millionaires and billionaires" would pay for the operation of the U.S. government for less than 25 days.

It is not a serious proposal to deal with debt, 23 million unemployed or underemployed, exploding entitlements, or sluggish economic growth, though it is a plan that is symbolically popular with Obama's rabidly anti-corporate base. In the irony of ironies, in order to appease this base, Obama rejected all corporation donations to the Democratic National Convention in Charlotte. This had the unintended consequence of forcing the Dems to shave off one day of their convention, due to lack of financial support.

Oops.

You'd think that after the drumming that the Democrats received at the polls in 2010 over entitlements, jobs, and, above all, debt -- the issues that swing voters care about most -- Obama would get on topic. Unfortunately, he subsequently ignored the recommendations of his own Bowles-Simpson Debt Commission (what Obama backer, Warren Buffett, called a "travesty"). Republican VP candidate, and deficit hawk, Paul Ryan, ignored it too, but then came up with his own credible plan to deal with this country's crippling debt and entitlement obligations.

Mr. Obama's subsequent plan was far weaker and far less courageous. Though it borrowed from Bowles-Simpson, the Obama plan was not taken seriously by either party. In fact, it now seems that Obama's token deficit reduction plan was offered merely as a way to stake out the President's reelection strategy of Blame, Bain, and Avoidance of Pain. A strategy that makes a mockery of Obama's signature selling point in 2008: that he was the Great Compromiser who would transcend the partisan divide to do what was best for the long-term interests of the nation.

As I said at the beginning, Mr. Obama has been deft on a range of policy issues. However, on the issues of most concern to the very voters he needs for reelection, Obama has been AWOL. In a February New York Times/CBS poll, 59% of Americans said they disapproved of Mr. Obama's handling of the deficit crisis. Moreover, in a July New York Times/CBS News Poll, 55% of respondents said they disapproved of Mr. Obama's handling of the economy. In the Times/CBS News poll from April, 48% said they disapproved. Moreover, more Americans now disapprove than approve of Mr. Obama's handling of the jobs crisis.

Meanwhile, Mr. Obama wants you to know how much he cares. Furthermore, he wants you to know what a horrible uncaring man Mr. Romney is, what with his Swiss banking accounts and that enormous leg up he got from his carpenter Dad. In other words, with his baseless ad hominems and other distractions, Mr. Obama is showing quite clearly that he is not serous about tackling the issues of most concern to the average swing voter.

And, in this regard, Mr. Obama is proof positive of an argument we know very well in debate circles. You can be absolutely competent, prescient, and correct on a range of policy arguments, but, if you are not topical, you lose.

Sensing this, Mr. Obama will trot out Wednesday night the only Democratic President in the last 50 years to successfully advance a pro-growth, job-creating agenda, while still balancing the budget.

Former President Bill Clinton will try his level best to make the case for Obama the Economic Centrist. However, swing voters know that Barack Obama is no Bill Clinton. After all, Obama beat Clinton's most effective surrogate - Secretary of State Hillary Clinton - precisely because Obama was not an economic centrist in the Clinton mold. To now claim otherwise will strike the centrist voters the President desperately needs as preposterous and his die-hard base as apostasy.

This debate judge, for one, isn't buying it. Sorry Chris Matthews. As the noble Jimmy Carter proved, it doesn't matter how smart or compassionate you are, you simply don't win reelection in America on a "center-left" economic platform, especially one one shorn of hard-nosed solutions to the nation's looming insolvency.

This is why I have to vote this otherwise admirable President down on topicality. Don't act shocked, Obama-heads, when millions of other swing voters follow suit.

 

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