THE BLOG
10/22/2012 03:15 pm ET | Updated Dec 22, 2012

Is It Really the Economy, Stupid?

I am confused. Niall Ferguson, the Harvard economist, concludes that in spite of what people say about the economy being the number one issue in this election that may not be the case. For one, I say it can't be the economy! If it were, there would be far more than an insignificant 3 to 4 percent of undecided voters. And, voters would be looking to hold this administration to task for its actions or inaction towards the economy.

We are entering the final weeks of an excruciatingly long presidential election campaign. The incumbent, while admittedly having inherited a terrible economy, has done little to make it better. Unemployment remains chronically high, hiring is not keeping pace, the GNP is growing at an anemic rate, far too many recent college grads are not finding jobs, a record number of Americans are on food stamps and we face a frightening fiscal cliff. Yet, despite identifying the economy as their primary concern, voters are not holding the administration accountable. While some polls suggest a tightening of the race, the gap between the incumbent and the challenger still exist.

So, how can this be about the economy?

As a registered independent, a moderate one at that, I find this situation perplexing. If a new chief executive was hired to turnaround a troubled company, he would find his board's patience worn thin if there were no clear signs of a turnaround after four years on the job. Especially, if there were obvious actions that might be taken that might have helped turn things around.

It appears the electorate is not considering economic performance to date or a candidate's experience as indicators of who might be most qualified to lead us out of this economic malaise. On paper, Romney would seem to be the more qualified candidate, if for no other reason than that the incumbent has not been successful. According to David Leonhardt in The New York Times, this administration has consistently underestimated the extent of the economy's weakness. Worse, the administration in speeches to its base of students, teachers and unions has not cited specifics on how it will confront and manage the economic problems we face. Funny, the administration never seems to speak to employers. Instead, it spends its time bad-mouthing the challenger and his politics with vague generalities, little data and negative comments about the so-called "millionaires and billionaires," which is unfortunate and unproductive. Many of those demonized have made significant and positive impact on America as they built successful enterprises, which generate tax revenues and employ Americans.

Some time ago, the president commented he would step down if he were not successful in turning around the economy, which included getting unemployment down below 8 percent. Excluding September, we have had 43 months with unemployment over 8 percent, a post-WWII record. What is worse, there are many things left undone that could have helped.

  • Obama has ignored the recommendations of The Simpson-Bowles Commission, a bipartisan task force he created yet whose recommendations on debt reduction, economic growth and comprehensive tax reform he has yet to embrace.
  • Obama has lobbied against legislation to build the Keystone Pipeline, which could add many thousands of new jobs and also promote the elusive goal of US energy independence. This legislation enjoyed bi-partisan and union support.
  • Obama has not defined his administration's future tax policy. The resulting uncertainty, which is shown to slow if not stop new investment, has been exacerbated. Professors Scott R. Baker and Nicholas Bloom of Stanford University and Steven J. Davis of the University of Chicago, in a recent study, found that uncertainty over federal tax policy has markedly decreased hiring and investment.
  • Obama has not reduced the burdensome and costly regulatory environment facing innovators and entrepreneurs. n the life sciences, where I have built a career, companies and technologies for saving lives and improving care have gone away due to either lengthy or uncertain FDA approval timeline.
  • Obama has done nothing to change existing and burdensome tax policy to incentivize American companies to repatriate the over $1 trillion held outside the United States. Repatriation of this cash could have a profound impact on job creation. The liberal-leaning Huffington Post quoted Apple CFO Peter Oppenheimer saying, "We think current tax laws provide significant disincentive to U.S. companies that would otherwise repatriate the cash they have on hand." A coalition of companies has appealed to the government seeking a onetime tax holiday to repatriate these funds arguing they would use the proceeds to invest and create jobs.

So, is it really the economy? I think not. If this election were truly about the economy, this country's voters would either hold this administration's feet to the fire and force it to be more specific about its solutions to this economic crisis or it would be voted out of office in November. Regardless of one's politics, the administration should swallow hard and re-consider their inaction on these and other economic tactics that, individually or in the aggregate, might provide economic relief to our country.

Joe Mandato is a 2012 Fellow of the Advanced Leadership Initiative at Harvard University. He can be reached at joe_mandato@harvard.edu.