A Tale of Two Presidencies

There is a headline story of a Texas county judge who declared that if Obama wins the election we should prepare for civil war. I was waiting for someone else to say it. The funny thing is -- idiots like that judge believe somehow that if Romney wins, no one from a "Blue" state should prepare for civil war. It also doesn't matter that if Obama wins it means he at least won the majority of electoral votes, if not the popular vote.

But what does happen if either side wins?

Can we say, "well if Obama wins, we've already seen what will happen over the past 4 years. We know what to expect.". Possibly. Obama is a feckless and inept leader. He is not inspirational. He has not changed much of anything. Granted, the Republican held congress has made certain that he can't accomplish much but Obama has not made use of the bully pulpit and has not used his ability to speak out at all. One might say he has been trying to mend fences, or that he didn't want to increase the division but he surely must have realized long ago that he lost that battle. He could have and should have been angrily denouncing the Republicans when they failed to pass policy. He did not. He is just not a leader.

So what would 4 more years bring? We have to assume that the Republicans are going to take the Senate. That is a big problem for Obama. He can no longer rely on Harry Reid to fend off every stupid Republican position. The Congress and the Senate in the Republican hands make for a powerful weapon to club Obama with. He will be able to rule by edict as long as he wants, but those rules last only until the next president comes in. What would he do, domestically and internationally? I believe that a man with nothing to lose can do almost anything. He could, for example, eliminate many of the pro-gun policies of the past Republican administrations and allow all kinds of recording and statistical analysis that now prevents serious gun rules from having teeth. He could, by edict, enforce stricter pollution controls. He could, for awhile, fight small wars.

Eventually the congress will try to impeach him. They will not have the power to complete the task however but they will strive to hurt him as much as possible. There will be gridlock and there will be lots of budget issues. The Democrats will only be able to use the filibuster in the Senate to slow down the Republicans. Eventually, the Republicans will vote the filibuster away.  Nevertheless, Obama still has the power of the veto, and the Republicans do not have the power to over-ride it. The result will be gridlock.

As for the economy, we are going into recession, possibly depression. It's going to be bad and this is what the Republicans want anyway, especially during a Democratic administration. Obama will not have the power to spend, and the Fed can only create so much money. And with a Republican congress, the Fed better be scared. So we will see 4 years of limping and economic pain, until 2014 when things revamp for the elections. The Republicans will be fighting to get over-ride power or the power to impeach. Obama will be struggling for the ability to maintain sanity on science, civil rights, women's rights, and the environment. It will be a hard four years until the next cycle. The most important thing will be Obama's chance to replace Ruth Bader Ginsburg on the Supreme Court. She's going to die of cancer soon. In any event, it will be hard for Obama to complete four years if the Republicans win more seats in Congress and can actually impeach.

As for foreign policy, it's likely someone will go to war with Iran, be it Israel or the US. I doubt it would be the US under Obama, but in the next 5 years, Iran is going to demonstrate it's nuclear weapon. That will be a disaster for Obama or any president. What do you do then? Nuke Iran? I doubt the US will do anything once Iran announces the bomb. How can you?

What about a Romney presidency? If Romney wins, it will be like 2000 again -- the Republicans will control the house, the senate, the supreme court and the Presidency. One of the first things that will happen will be that the senate will vote away the filibuster. There will be no check against the Republicans. We will see the end of the EPA as a cabinet, it will become toothless. It will be a good time for coal and oil stocks. We will see a scale down of any green technology. We will see a hard attack on civil rights, affirmative action, abortion. There will be nothing to slow down the Republican agenda. The big issues will be foreign policy and the economy. Romney has promised to be more belligerent versus Russia and could foment a war with Iran. If there is a confrontation with Iran, it will have to be early in the administration. Any kind of shooting war will cost at least 150 billion dollars -- and that's for six weeks of fighting. If that happens, the Russians and Chinese will not be sitting idle -- the Chinese get alot of oil from Iran. I also expect further antagonism towards the UN from a Romney administration. As for the economy, the Republicans will no longer put up even a token fight against raising the debt limit, and will suddenly embrace Keynesian spending. If they don't or Romney does cut the budget 500 billion dollars as he suggests he will, then we will be in an extremely deep depression in no time. Cutting 500 billion dollars would mean the end of the Education Dept, the EPA, the Dept of Energy, and consolidation of the Dept of Agriculture and Interior. Meanwhile, Romney plans to increase Defense spending. The only way he can accomplish these goals is to eliminate Medicare or Social Security or both, transforming them as he has said he would. The impact will be devastating. Meanwhile, it would mean the end of Section 8, SSI, Foodstamps, Welfare, WIC and so on. Not on paper -- they would still exist on paper, but at the end of 4 years, we would have plenty of starving children living on the street.

Neither presidency is going to be fun. With one we get gridlock, a depression and possible civil war. With another we get war, starvation and depression. It's a poor choice.

On Economic Policy and Myths: Romney vs Obama

People keep talking about debt and jobs and economy as if they have some idea of what they are talking about. They don't. They get talking points with no background from Newsmax and Fox "News" and MSNBC and Paul Krugman. These sites and people provide no context. How many times have you heard someone compare the US to Greece? Get real. Greece could fit in America's back pocket with room to spare. Their situation does not approximate ours in any way. If you want to compare yourself to a country you have to compare yourself with England, the last great superpower. They ran huge deficits for 600 years and still ruled the world until they lost their international hegemonic possessions. The US is far more like England than Greece.

How many times have you heard "we can't keep borrowing forever."? Well, guess what? We can continue to borrow for quite some time to come. You see interest rates keep falling. That's because everyone in the world is buying US bonds -- even at the lowest rates in history. As long as they do, we can borrow as much as we like. Is it smart? No. It's stupid. We need to fix our problems. But we aren't in crisis mode and things were MUCH worse debt-wise after World War 2 than they are now.

There are only a limited number of actions the US can take at the moment:

1) Cut spending
2) Raise taxes
3) Create inflation
4) Create growth
5) Default and Balance

That's it folks. And guess what? None of them is viable in the short run. We could NEVER cut spending enough to balance the budge, not realistically. We could NEVER raise taxes enough and so on.

There's an iron rule of economics that never fails -- cut spending or raise taxes and you slow the economy. Slow the economy enough and you get recession, or worse, depression.

What Romney doesn't tell you is that even if he cuts all the spending he wants, he will suffer 4 - 5 years of massive recession, perhaps depression. There is no other option under his plan. Even if his plan works in the long run, and there is no way to prove it will, we suffer HUGE misery. If you want to compare yourself to Greece, the current situation there is the right comparison under the Romney plan. They've cut spending like crazy, still haven't balanced the budget AND they are in recession. That is what Romney's plan does to us. When the US bailed out the auto industry it cost about $100 Billion and save a million jobs directly and 5 million indirectly. What do you think would happen if the US cut spending, say, $500 Billion next year? 10 million jobs lost? And then what?

On the other hand, the current Administration's plan is neither fish nor fowl -- it does not lessen the severity of the recession AND it creates more debt. It does not accomplish its goals and it makes things worse. Nevertheless, you NEVER heard ANYONE complain about passing debt to their grandchildren when WW2 debt was worse, and we paid that off in 1980. It is not a disaster. Yet.

The biggest problem isn't even government debt. It's private debt. Lazy Americans owe $900 Billion on credit cards; $1.2 Trillion on school loans, $500 Billion on autos and more than $2 trillion on mortgages. I think 1/3 of our GNP is built on credit. The government accounting office believes a quarter to a third of all income is used just to maintenance private debt. We pumped up the economy using credit cards, now when we have to pay it back, we can't unless we stop buying shit. Of COURSE the economy is going to slow down. Of COURSE jobs are going to suffer. In real terms, China passes America in REAL GNP, probably in 2008.

And the bullshit about the debt ceiling -- does anyone even know what this is? It was made during WW1 to HELP the government raise money. NOTHING anyone, Republicans OR Democrats EVER do is going to lower the debt ceiling. EVER. Even if we stopped spending completely as a government -- no army, no highways, no government employees, etc -- the debt would go up. The debt limit is a political chimera that has no applicability to real life. It is just used as a political hammer to hurt the Administration. If Romney wins the election, you will never again hear of any negative discussion about the debt ceiling and the votes will happen quick and painless as they always have.

The only way out of our current condition is strict reform and discipline. Neither of these will happen. No one is seriously going to cut Social Security -- old people vote. No Americans are seriously going to cut back on boats and second cars and Ipads. As long as they have credit cards, they will live on debt.

Eventually, we will have high interest, mega inflation, collapse of commercial loan market -- no one is going to buy a car or house at 10 percent interest. The US as a reserve currency is finished, perhaps in the next 10 years. The US as a superpower is finished.

If you want to contrast the economic policy if Obama wins vs Romney, assuming they actually implement their plans, then Obama gives us 4 more years of what we already know -- slow or no growth, debt build-up, discontent. Romney gives us Greece -- misery, unemployment and depression, at least for the first 4 years. It might fix the economy 20 years down the road. It HAS to work that way. You can't legislate away the rain, and you can't pretend the iron laws of economics don't work.The thing is Romney is never going to tell you that his plan puts 15 million people out of work and Obama is never going to tell you that things just don't get any better.