05/21/2012 11:04 am ET Updated Jul 21, 2012

Managing Disappointed Expectations: A Major Challenge to President Obama's Re-Election

Eric Hoffer said that "disappointment is a sort of bankruptcy -- the bankruptcy of a soul that expends too much in hope and expectation." The author William Blake offers a corollary: "It is often easier to forgive an enemy than to forgive a friend."

The rise of instant communication and ubiquitous social networks during the administration of our nation's first African-American president makes the management of these disappointed expectations a formidable challenge for President Obama. The actual or perceived failure to address this challenge risks that the hopes and dreams of those who voted for him in 2008 could, in the words of the poet Langston Hughes, become "dreams deferred that will dry up like raisins in the sun."

Shaping much of the disappointed expectations of voters who elected President Obama and supported him during his first term in office are: high gas prices, widespread housing foreclosures, high unemployment, the continued American presence in Afghanistan, unprecedented public debt, continued high cost of Medicare and Medicaid, rising income inequality, the increased cost of education, continuing social and the economic costs of unresolved illegal immigration. Resurgent attacks on the Roe v. Wade decision empowering women with the right to choose or not choose to have an abortion may also be turning of a significant number of independent votes. (This is obviously my own personal speculation.)

Addressing Obama's disappointed expectations will not be successfully achieved by resurrecting the scurrilous attempt to scare potential voters for him by the media's caricature of the "liberation theology" of Reverend Jeremiah Wright -- the president's former church pastor and spiritual adviser. Reverend Wright's relationship with Obama will not materially reduce or increase unemployment, raise or lower our deficit, continue or abate housing foreclosures, reduce or increase the costs of healthcare or materially and immediately change the growing and severe economic inequality between the top 1% and the 99%.

We were pleased to see that Governor Romney renounce and disassociate himself from the planned line of attack against Obama based on his earlier relationship with Reverend Wright. His response and criticism of the proposed personal attack on Obama was quick and decisive. Apparently, this is more in keeping with the man described by Jodie Kantor, a reporter for the New York Times, who wrote on May 19, 2012, in her story covering aspects of Governor Romney's personal life that: "Outside the spotlight, Mr. Romney can be demonstrative about his faith: belting out hymns ('What a Friend We Have in Jesus') while horseback riding, fasting on designated days and finding a Mormon congregation to slip into on Sundays, no matter where he is."

"Every presidential candidate highlights patriotism, but Mr. Romney's is backed by the Mormon belief that the United States was chosen by God to play a special role in history, its constitution divinely inspired."

Meeting the "Disappointed Expectations" challenge has apparently emerged as a front and center obstacle to President's Obama's re-election. Recent national polls indicate that Romney now commands a lead beyond the margin of statistical error among voters who were polled on the question of whether the economy will get better if Obama is re-elected. Polling results show that most people polled do not believe the economy will get better if President Obama is returned to office.

In an earlier blog, "The Politically Treacherous Landscape Confronting President Obama's Re-Election," on April 25, 2012, I wrote:

"The principal components of the Romney campaign theme to defeat President Obama's re-election have now emerged in our national political landscape. They are:

  • President Obama is personally a nice person with a nice family; but
  • He is inexperienced as a "business manager" and his record of high unemployment, gasoline prices, unprecedented public debt and government spending are a consequence of this; and that
  • The Hope and Change inspired during his election in 2008 have not been fulfilled; and
  • Promises candidate Obama made to America have not been kept; and
  • Elect Romney in November 2012; and "This time we (Romney) will get it right"
  • The Republican presidential campaign seeks to tap into and exploit the electorate's anxiety, uncertainty, and disappointment voters have experienced during the past four years."

Apparently, Romney's strategy is experiencing some initial success. If this success continues in critical battleground States of Iowa, Virginia, North Carolina and Ohio, the importance of addressing and managing "Disappointed Expectations" among President Obama's 2008 supporters assumes even greater importance.

The Occupy Wall Street Movement suggests proposals that could constitute effective management of the disappointed expectations among earlier and current Obama supporters. Our only difference with the proposals of Occupy Wall Street is that they subordinate and minimize the importance of the recommendations of the Simpson Bowles Commission for reducing the deficit, curbing the rising costs and Medicare and raising taxes through closing the multi-billion-dollar tax subsidies and loopholes in the current tax code.

Nevertheless, we recommend that the White House and Obama's re-election team review such proposals and consider their immediate implementation. Among other things, they include recommendations which would:

  • Tax the highest income, the top 0.1 percent of U.S. taxpayers -- the wealthiest one in one thousand who have seen the share of their income paid in total federal taxes drop from 60% to 24.3%. "America's highest income-earners -- the top 400 people who have wealth equal to 154 million Americans -- have seen their federal income tax drop from 51.2% in 1955 to 18.1% in 2008."
  • "If the top 400 paid as much of their incomes in personal income tax as the top 400 of 1955, the federal treasury would have collected $50 billion more in revenue from just those 400 taxpayers."
  • "If the top 0.1% of taxpayers -- Americans with incomes that averaged $4.4 million -- had paid total federal taxes at the same rate as the top 0.1% paid these taxes in 1960, the federal treasury would have collected an additional $250 billion in revenue."

  • Not extend the Bush tax cuts ; thereby adding nearly $500 billion each year in tax revenues to the Treasury.

  • "A tax of a half of a percent or less on Wall Street speculation could raise over $800 billion in a decade. The Speculation Tax on the purchase of stocks, bonds and derivatives would be a tiny tax with a big impact." (People in the U.S. pay much higher taxes on purchases of food and clothing; it is only fair that the wealthy pay taxes on purchasing wealth instruments.)

  • A fair tax on capital gains, treating it as ordinary income would raise $1 trillion over a decade. Wealth-based income and work-based income should be treated equally under the law as it used to be.

  • Congress should enact a "pure worldwide" tax system, in which all profits of U.S. corporations, whether they are generated in the U.S. or abroad, would be taxed by the U.S. "This would end "deferral," i.e., where taxes are deferred until money is brought back into the United States. U.S. corporations would continue to receive a credit against any taxes they pay to a foreign government (the foreign tax credit) so that profits are not double-taxed. Under such a worldwide tax system, corporations would have little or no tax incentive to move jobs offshore because the U.S. would tax profits of corporations no matter where they are generated." The Treasury estimates that deferral of U.S. taxes on offshore corporate profits costs close to $50 billion each year, and many experts think this estimate is substantially understated.

  • Hundreds of billions are lost through tax havens. Accordingly, "Tax havens" should be shut down through the passage of the Stop Tax Haven Abuse Act. "The U.S. Treasury estimates this costs $100 billion each year. (In 2006 the U.S. Senate Permanent Subcommittee on Investigations reported that Americans now have more than $1 trillion in assets offshore and illegally evade between $40 and $70 billion in U.S. taxes each year through the use of offshore tax schemes.)"
  • Close corporate tax loopholes, thereby, returning the fair share of taxes paid by corporations to the funding of government. Declining corporate taxation is another prime factor in increasing deficits." Corporate income taxes have fallen from roughly 4.8% of GDP in the 1950s to only 1.8% of GDP over the past decade. Ending just two large breaks, deferral of overseas revenue and accelerated depreciation would raise about $114 billion over a decade."

The taxes described above would generate at least $600 billion annually. Failure by the Obama re-election team to address and seek to implement these proposals will only further fuel the fires of actual and potential disappointed expectations among previous supporters of President Obama.

This, coupled with widespread voter anxiety, frustration and impatience over continued joblessness, rising food and gasoline prices may persuade many voters this November to overlook Romney's significant personal wealth disparity from their own. This, together with an effective media promotion by the Romney for President campaign of his business management experience could result in America electing a Mormon as the 45th president of the United States.