Claiming the Middle

It is often said that the general election is won by claiming the middle, and the GOP can grab the center of the political core. Take economics as the Democrats depend upon the Buffet rule to take mantle of sticking up for the little guy. Obamanomics is finished as a believable set of economic principles as Obama's lack of ability to get even one vote for his recent budget shows even Democrats won’t defend it. (The Democratic-controlled Senate hasn't even bothered to pass a budget for the past three years.)

Obama's own deficit commission report ended any intellectual case for Obamanomics as Bowles-Simpson essentially surrendered to the logic of Reagonomics of lower tax rates, entitlement reforms and set in stone that even liberals accept that government spending needs to be restrained to a certain level, accepting the premise that there is a limit to government power. The commission goal for government spending as percentage of the overall GNP is far less than what Obama presently has it. Spending cuts combined with tax rate reduction on both the individual and businesses is hardly modern day Democratic tenet, but it does reflect surrender to the real world. (In fairness, the Simpson-Bowles does include overall tax increases but that is mostly through the elimination of deductions. The individual top tax rates are actually lower than the Ryan Plan.)

If the intellectual case for Obamanomics is over, the political case for Obamanomics is not. The Obama economic plan has nothing to do with stimulating private growth, but replaces private growth with government growth accompanied by government controlled private growth. The latter is nothing more than crony capitalism with the government playing favorites while attempting to control the outcome of “private” decision. Some would call this socialism or at least European social democracy. Obama's emphasis on subsidizing green technology as a byproduct of this thinking (Think Solyndra) and the government involvement in the auto industry with a dependence upon newer “environmentally” controlled cars like the Volt is another example of this. Irony is that much of GM's growth has come not in the Volt but the bigger and less environmentally correct automobiles. As for the Volt, its sales have not even measured on the Richter scale.

On the energy front, most Americans are ready for drill, baby, drill and frack, baby, frack. The United States may have more recoverable carbon based energy than any other nation with the bonus that Natural Gas being a clean alterative. As CNBC analyst Jim Cramer noted, natural gas is perfect competitive alternative to oil as it may be less expensive to operate a natural gas built automobile and this could force a significant price reduction in oil. It doesn’t hurt that the United States is awashed in Natural Gas. Energy development is an easy position or should be since we have enough supply to provide our own energy needs and even become an energy exporter. Combined with Canadian sources, we could be provided enough energy for our usages and no longer dependent upon unstable governments overseas.

There is universal acceptance that entitlements need to be reformed and Ryan has already put together with Democrat Ron Wyden a bipartisan Medicare reform, so there is a bipartisan consensus to develop a plan after the election, providing that Obama is defeated. Nor can Obama truly stake out the claim that he stands between Medicare and the barbarians at the gate. Obamacare cuts half a trillion of dollars from Medicare and move those funds toward Obamacare, a shift of funds from the elderly toward younger workers. And Obama payroll tax cuts are cutting funds that is financing both social security and Medicare. Obama can make the case that this was needed to provide this tax relief, but it also undermines the funding for those entitlements. Obama and the Democrats can no longer be the guardian of the entitlements since they have already undermined the funding process and Obamacare has already set in principle that funds will be transferred from the elderly toward younger workers; setting the stage for a generational political combat.

With debt total reaching 100% of the GNP, the American people now understand that something is seriously wrong and financial Armageddon is a reality. So the case for reducing the deficit can easily be made a winning issue and Romney can easily ask the question, if Obama has yet to produce a budget that comes any near to balancing the budget and his last budget was rejected by his own Party, can he be trusted in a second term?

The Republicans have the opportunity to turn free market ideas as the new political center and force Obama to the extreme. The intellectual case for Obamanomics is over but it is up the Republicans to come with an alternative nor can it be based strictly on reducing the budget deficit, but it needs to emphasize economic growth. There is bipartisan support for tax reform featuring reduced tax rate reduction and eliminate deductions to encourage individuals and businesses to base their investment decision on what is profitable as opposed to what they can gain through the tax deductions. There is bipartisan consensus that federal government should be a smaller part of the economy, but we only disagree on where those lines are to be drawn. It is up to Romney and the Republicans to draw those lines in this election.


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