Economic Interests

If you owe the bank £100, that's your problem. If you owe the bank £100 million, that's the banks problem.

The best man for the job?

America will decide on Tuesday the leader of their country for the next 4 years. The choice is between Barack Obama, the current President and Mitt Romney, the challenging governor. Both have run expensive campaigns on vastly different policies, yet the polls are evenly split. This is because neither candidate has particularly won over the American public and seem to be campaigning more on the criticisms of their opponents than their own positive attributes.

Barack Obama has already held the office for 4 years to mixed results. His campaign for re-election is largely going to be decided on this first term and whether the American public are happy for a continuation in current policy. So it seems best to assess how he has done is his first term.

In economic terms he has brought growth back to America (albeit very slow), reversed the mass job losses (though unemployment is still high) and saved the car industry (an important supplier of jobs). But the huge budget deficit that Mr Obama promised to cut, currently at 7% of GDP, has only increased as the Obama administration spent their way out of recession. Each of his 4 years in charge has seen trillion dollar budget deficits and it has lead to America’s public debt to GDP ratio expanding to over 100%. This has been the weak link in Barack Obama’s campaign, as many American’s worry the huge debts owed to the likes of China are weakening America’s position as the world’s strongest economy. In foreign policy, Barack Obama holds a much stronger argument. He can boast the killing of Osama Bin Laden and Colonel Gaddafi, the pulling out of Iraq and (soon) Afghanistan and in general the more peaceful and calm image he has created of America. Even with the upcoming problems facing the USA, including the Syrian civil war and Iranian Nuclear program, Mr Obama has shown a strong confidence in his decisions. He has promised to the world that Iran will not attain Nuclear weapons and has backed that up with strong economic sanctions that are only now beginning to take a real affect. In social policy Barack Obama has helped improve work conditions for women, supports gay marriage and is pro-choice (an opinion I share). While he has also brought in a new healthcare program nicknamed ObamaCare, a much needed reform that has solved America’s problem of having millions of people without any sort of healthcare.

This paints a picture of a successful Commander-in-Chief, but a weak leader of the economy. Yet this could be a harsh assessment as Barack Obama took over when the American economy was suffering one of its worst recessions in its history. Confidence was low, banks were under capitalised and large industries were falling apart. Even considering one of his main weaknesses, the large deficit and public debt, there are some mitigating circumstances. The Obama administration decided that a large stimulus was needed to get the economy growing and that deep cuts into the budget would only disrupt the recovery. In countries like Spain and Britain, where austerity has caused new recessions in their economies, it’s fair to say a delay in the much needed cuts might have been a correct decision. Barack Obama has essentially campaigned on this argument, that the economy could have been a lot worse than it has been.
But it also could have been a lot better. Barack Obama has completely failed to work alongside the Republicans during his first term in office and it has lead to the impending fiscal cliff in January, where an array of spending cuts and tax increases could cause a 5% decline in GDP and a return to recession for America if both sides can’t agree on how to cut the deficit. Mr Obama has also showed a poor understanding of private sector; continually criticizing big businesses and investment firms, strangling credit with heavy regulation and making poor choices on which firms to invest government money in. Finally, his legacy policy –ObamaCare – has failed to solve the big problem with healthcare, mainly that is unaffordable and only growing in costs.

The fiscal cliff that America is facing.

Mitt Romney in contrast offers something completely new. He has heavy experience in the private sector and has based his campaign around creating jobs for the millions of Americans out of work. He also boasts experience of working alongside democrats during his governorship, a clear weakness of Mr Obama’s. He even chose a popular running mate in Paul Ryan, whose budget plan Mitt Romney has chosen to use in his campaign. This entails cutting taxes, transferring more responsibility to state level and shrinking the public sector to allow private industries to grow. Fundamentally he is a great candidate to run against Barack Obama.

But this would only be describing one side of Mitt Romney. The candidate has flip flopped between so many different policies it’s hard to know what he will do when in power. He has regularly adopted contradicting policies, remains vague on subjects such as abortion and has recently changed his mind completely on when to pull out of Afghanistan (copying Mr Obama’s point of view). This extends to his famous five point plan and tax plan, where he states he will cut taxes on the middle class, cut corporation tax, increase military spending and yet still manage to reduce the huge budget deficit (A great interactive game for this issue – . He smartly ducts questions on how he will actually manage to do this and vaguely states he will close loopholes, but he will clearly have to break at least some of his promises if he really wants to deal with the deficit problem. Another less attractive side of Mr Romney is his link to the extreme views of his Republican party. Though he himself rarely states his own opinion, his has yet to denounce other republicans views that abortion be made illegal even in extreme cases of rape(including his own running mate Paul Ryan) and was actually caught out on video when a gay war veteran asked him about his views on gay marriage. Then there are his plans for healthcare, where he constantly denounces ObamaCare (a plan identical to one he implemented in his own state) and plans to bring in a “voucher” based system where old aged Americans would receive vouchers that they could use for healthcare costs. The criticisms are that they wouldn’t be inflation adjusted and become too small to pay off rising costs, while the overall plan doesn’t actually seem to stop rising healthcare costs, America’s main healthcare problem.

Neither candidate therefore has much of a leg to stand on. This can be seen in the mud-slinging campaign battles that we have had to witness over the last few months. Both candidates have cut into each other, broadcasting extremely negative adverts (with it found that only around 10-15% of each candidate’s adverts being positive). Barack Obama actually started this early by producing negative adverts on Mitt Romney while he was still campaigning for Republican nomination. This was hoped to paint the picture of a rich, greedy millionaire who too distant from middle America to lead it. This ended up backfiring though when it came to the presidential debates, an important part of any presidential election. Mitt Romney had a great first debate and appeared much more likable than the Obama Campaign had made him appear. This underdog status helped him surge back up the polls, while Barack Obama appeared nervous and reluctant to challenge Mitt Romney on his policies. The next two debates saw a more even performance from both candidates, but the damage had already been done; Mitt Romney was not the evil CEO he had been made out to be. Now both candidates are neck and neck in the polls and have a decent chance of winning.

Mitt Romney convincingly wins the first debate.

So who should win?

For me it would be Barack Obama. He may not have delivered on the mass hype that surrounded him in the last election, but he has managed over a sustained recovery after being given a downward spiralling economy. He deserves a second term to really complete the promises he made about cutting the deficit and creating jobs for the American public. Internationally he is favoured heavily over Mitt Romney and has helped improve America’s image immeasurably after the destructive Bush years. With such impending foreign crisis’s like Iran gaining Nuclear weapons, Barack Obama seems a much wiser and cooler head than Mitt Romney possess. While domestically what America really needs now is continuity not change, some of Barack Obama’s policies are only starting to take effect now and his future plans are a lot clearer than those of Mitt Romney. Indeed Mitt Romney’s best policies could only work if you discount some of the other policies he has promised, making him a tough candidate to believe in. Much like the Obama campaign message, voting for Mitt Romney could see America end up a lot worse than it is now.


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2 thoughts on “The best man for the job?

  1. Government is not the solution. We have serious problems with our health care system that Obamacare does not solve – in fact it probably makes it worse. Obama has also done by executive order what congress would not do and in some cases he did not ask them to do. That’s scary if you would like to keep our democratic form of government.

    • You make a very good point, I agree obamacare doesn’t solve the issue of rising healthcare costs, and it is worrying them president needed to bypass congress to put it in motion. But at least it is solving the problem America had where millions of people didn’t have any healthcare plan. While the fact he had to go around congress has as much to do with congress itself, as both sides have constantly disagreed with each other to Americas cost.

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