Obama, cornered by the deficit elephant in the room, gets squashed
What struck me most about last night’s Romney/O’Bama TV debate? Firstly, as a European, I was left smiling when seeing the centre-left President wearing a blue tie and his arch conservative opponent a red one. Secondly, I was amazed to see the confidence in Romney’s appearance, given his weak position in the polls and O’Bama, who should be strident in his performance, behaving like a beaten man.
I shall desist from trying to value the ideological contents of the two candidate’s utterings as they were not exactly directed at us but at what they refer to as the American Middle Class. Apart from that, the real issue, the elephant in the room, is the need to square the circle of managing the debt and deficit at the same time as trying to grow the economy. The sovereign debt crisis here in Europe has forced this very issue on to the table and so far no solution has been found.
The world has moved on in the past four years and, no matter how hard O’Bama tries, he struggles to simply paint a picture of Romney as “Son of Dubbya”.
Using figures given by the Congressional Budget Office, the federal deficit for the current year will be $1.1 trillion. That works out at just over $2 million a minute so, while the two mighty ones were ripping strips off each other in Denver for an hour and a half, the deficit had risen by over $188 million. It’s fine and dandy talking about making life better for hard working American families – one of O’Bama’s favourite lines – but lumbering them with this kind of debt burden is hugely deceptive. Morphine hides pain, it does not cure it.
I was of the impression that the President was keenly aware that his efforts to spend the country out of recession have failed, or are at best not succeeded, and he patently avoided getting into verbal warfare with his opponent. I commented on Monday about the risks he was exposed to in terms of his own arrogance and by refusing to spar with Romney and by instead addressing lectures to the camera, he demonstrated, to me at least, his disdain for those who disagree with him and who are smart enough to make criticism stick.
Whatever it was we saw, a debate it was not. Even his early attempt to do the Mr Nice Guy thing by declaring it to be his twentieth wedding anniversary seemed contrived, flat and scripted by the PR folks. The world has moved on in the past four years and, no matter how hard O’Bama tries, he struggles to simply paint a picture of Romney as “Son of Dubbya”.
First blood very clearly to Romney.
Meanwhile, the ISM is looking up
Meanwhile, Wednesday’s economic releases were once again on the better side of expectations with the ISM Non Manufacturing Composite Index reporting in at a very firm 55.1. This particular diffusion index has been in positive territory since January 2009 and has been a significant part of the positive economic story.
However, the consciousness as to where all this might go if, as and when the Unites States comes up against its “fiscal cliff” is growing. I recall discussing this time last year that 2012 would be economic no-man’s land as whatever harsh budgetary decisions would have to be taken would not be faced up to until after the election. That makes a full year and a half of lame duck economic and fiscal policy in the world’s leading economy and largest debtor. All in the name of hardworking American families. Really?
It is a truism that politics can override economics for some of the time but that, sooner or later, pretty words run out of purchasing power. Whether it is to do with the conviction that the political will to create a single European currency was stronger than the divergence in the member economies and their respective citizen’s productivity or the belief that Islamism and oil make your economy bullet proof. The demonstrations in the streets of Tehran yesterday show an increasing dissatisfaction with poverty justified by ideology and even Hugo Chavez’ grip on Venezuela - oil without Islamism - is possibly beginning to slip. Interesting times, indeed.
In fact, in many ways, far more interesting that the Presidential debates on American television.