Nutter's Washington

November 2016: The Economy and the Election, an Alternative Scenario

It is Friday and time for some speculation and fun. It would be great if all goes right in the next four years. Employment increases, peace and prosperity, and joy and the rule of law returns for all.

 

I once made a comment to a colleague of mine that things could not get worse. He replied, "oh yes, they can." In that instance he was right. So have a bit of fun and skip ahead four years. It is now November 2016.

 The unemployment rate in the country towards the end of 2016 hovers around 16.6 percent. The United States has undergone two major recessions. Interest rates for short-term obligations of the United States are 19 per cent; inflation is about 1.5 percent per month. The credit agencies have down graded the sovereign debt 5 times in the last 4 years. The national debt has passed $24 trillion dollars; the deficit is projected to be an additional 2-½ trillion dollars in fiscal year 2017.

After the Election: Now What?

The election is over. No more commercials. No more yards signs. The President has been re-elected for a final four years. Divided government continues. In a sense it was a status quo event.

 

A year ago, the outlook was different. A President with low approvals and in full campaign mode, not bothering much at all to even try to lead the country or address any of the pressing issues. Republicans balking at most everything, thwarted to get anything done but very hopeful the election would bring different results.

The majority has now made it choice. There are many different reasons why it turned out the way it did. However, for the time being, I leave the analysis to the campaign experts, the demographers and the policy experts. I thought going into the election the President would prevail but raised the possibility an unknown anti-Obama swell would manifest itself. It did not happen, was not there. 

Ready to Vote? Observations and Predictions

The political campaign is over. The candidates will be jetting around to important states trying to gin up the believers. Supporters will be trying to get people to the polls to vote tomorrow. The respective campaigns are confident of victory, (as they have to be) but I suspect one camp already knows the outcome.

Opinion polls are varied, divergent and inconsistent. The electoral map-looking at the polls-suggests Mr. Obama will be re-elected. I cannot dispute that notion. However, I am not sure it is right. Here is why.

A friend of mine yesterday asked a really good question. He said, he did not understand why anyone would vote for Mr. Obama. This friend is not politically schooled in the ways of Washington. He was merely asking why the country would continue with a person who has failed in so many areas and who seems nasty and blames any and everyone else for the condition of the country. As I said, it is a good question. It is this kind of question that leads me to think there is a real Obama fatigue and frustration that might manifest itself tomorrow. If it does not, then Mr. Romney will lose.

Sandy, Fiscal Cliff, and the Election: One Common Quality--Disaster

It is the Friday before the election and there are so many things to write. Let’s keep it to three, all deserve more attention than I shall give them but all have one quality in common. 

Like most of people living in the area, the dreaded Sandy, such a great name but what a horrible storm, impacted me. I was prepared for her arrival and all-in-all escaped what others are still enduring. I lost power for only 16 hours as compared to the 6 days of lost electricity last July in the 140-degree heat. I also lost a big tree limb but not like the down trees that covered property last time.

When the winds were howling on Monday night, I was satisfied I had done everything I could to survive. Buckets and 10 6-gallon containers of water, 3 lanterns, batteries, ice in the freezer, cooler for the fridge perishable, gas camping stove with extra containers, cars gassed up, extra cash, snacks and food, radio, firewood inside and a handy pillow case to put Mr. Giant, (the cat) in case of emergency, were all in place. The house shook and creaked, the rain came but Sandy passed. 

Storms and events like Sandy are humbling. They demonstrate our total reliance on modern technology and comforts. They also show the resilience of the human spirit while at the same time can unfortunately bring out the worst in people. Sandy did not devastate my home; I was lucky the brunt went further north. However, I feel for those whose lives have been turn upside down and wish them the strength to pick up the pieces.

The second item that deserves attention is the “fiscal cliff”, that wondrous event of political failure. It is about 60 days from happening. Dealing with this set of circumstances will depend on the election. Congress must act before the end of the year to keep the current tax rates in effect and to prevent the budget sequester from happening.

More about this in the coming weeks but after talking to people on the Hill, (DC speak for Congress) I am not sure anything will be done. Maybe a few things here and there but there will not be any “grand bargain”, no major tax revisions, maybe not anything at all. It is truly a mess with profound consequences.

Finally, the election. The polls are mixed on who wins the Presidential election; they are close. Mr. Romney leads in some but the real battle is in the Electoral College.

Mr. Obama has a strategy to win it and it may prove the right formula. As I said last before, I think if Mr. Obama wins, it will be by a narrow electoral margin but if Mr. Romney wins the margin will be larger. I have the feeling there is considerable and perhaps hidden frustration about the President and these voters are highly motivated. That frustration was obvious and manifested in 2010. It is less visible now but I think it is still there. If that is the case, there will be a different President come 2013. 

The respective organizations have been waiting for November 6 for some time. Get the vote out. Mobilize the troops. There are still lots of maneuvering going one. However, I suspect the campaigns will know by Sunday night their fate. I await the results. Prediction to come! 

What do all of these have in common? Disaster. Sandy is a known disaster, the fiscal cliff is a coming but avoidable disaster and the election is an unknown disaster. 

 

 

 

 

 

 

Obama idea retreads: Worn out and ready to be replaced

The Obama campaign has released a shiny 20 pages brochure on what the second term what entail. What ideas, goals and strategies the President would prusue to bring us all together to address the economic and other problems facing the country. This material is evidently in response-two weeks before election day- to the charges that Mr. Obama has been light on substance. I know a number of Democrats still support Mr. Obama but have told me that have no idea what the plan is going forward. You can find the information at your local headquarters and on the internet. 

I looked at it. It is embarrassingly not-chocked-full-of-ideas. It is a repeat of the same old tired political mantra that everything will be fine if we tax the rich. It is full of proposals already rejected and full of solutions that are not realistic or workable. It is a campaign document to fool people that yes, indeed , there is a plan. It is a reaction to the fact the President does not have a successful record to run on so he has been running on blame and tar and feathering the other guy. Ideas? Solutions? Who needs them?All we have to do is make enough people think we are less worse than the other guy.

I do not think this kind of plan will convince many people. This is not about any proposals from Mr Romney. It is about the release of this particular campaign instrument.  It is transparent and last minute antics. I know this is harsh criticism but I have been saying for many months now, Mr. Obama owes it to the voters to speak plainly, conveying his intentions. Only when he is facing a very close race does he offer up the retreads. We all know how retreads perform and how long they last. 

 

Election: Two Weeks Away and House and Senate Predictions

The election is now two weeks away from today, although there has been early voting going on in a number of states. Show up in 14 days, leave your identification at home and vote away. If you need to get on an airplane, open a bank account or get a fishing license, however, bring that picture ID with you.

They’re are so many polls out that it is difficult to know how and what to believe. It seems to change by the hour. Third debate last night. I did not watch. Romney is ahead, no wait it is Obama ahead. Whatever the national numbers show, it is the state by state voting that makes the difference. In this respect, the numbers would seem to slightly favor the incumbent. But, Mr. Romney is in reach and if the polls are off some in his favor, the undecided go for him at the end or the polls do not reflect the enthusiasm gap, there will be a different President on January 20 2013

As for Mr. Romney, he has tried to be a lot of things to a lot of people. Still the uncle who stays too long at Thanksgiving dinner.

Unlike the last two years where Mr. Obama largely ignored both Houses of Congress to do nothing except tar his opponents, blame Bush and campaign, the next president will be forced by events to actually address some of the fundamental economic and fiscal issue confronting the country.

Mr. Obama has become a mean-spirited, almost obnoxious, candidate. Leadership is one thing. Using a series of one-liners to denigrate your opponent is another. Putting forward a plan and vision for the next four years is one thing, blaming someone else and hiding facts, deceiving the public is another. Even if Mr. Obama wins, his scorched earth politics will make his continued governing rein difficult.  He looks like a desperate politician now and maybe he is.

Biden vs. Ryan in the Chicken Wire, No Holds Barred

When I was around 10 growing up in small town Arizona, I would watch on one of the two television channels we received, Monday night wrestling from the "Garden" in Phoenix. I had my favorites, among them Tito Montez. There was also a villain named Sputnik Monroe because it was in the height of the cold war. Now, that was a cherished time, particularly when my oldest sister would watch with me for a few minutes feinting interest. 

There was a certain kind of grudge match where chicken wire was erected around the ring (which is square, of course) designed to keep the grapplers from escaping through the ropes. In a real hate match, the rules were suspended-no holds barred- so the contestants could fake choking each other and use their clenched fists to inflict pain.  

The debate tonight reminds me of such matches. In the chicken wire, no holds barred.

Election Polls for Romney: Still too Early but Encouraging

There have been a slew of new polls out in the past few days indicating that Mitt Romney may be leading in the Presidential Election. It is an unexpected turnaround because a little as two weeks ago, Mr. Romney looked like a gonner. The first debate changed all of that, along with the realization that Mr. Obama was not really offering anything new, different or that may help with the economy. Plus there is the deception or incompetence about the diaster and tragic event in Libya. 

The polls can be reliable but also deceptive. However, the improvement by Mr. Romney presents an interesting dilemma for the President. Mr. Obama seldom mentions his record of the last four year. He mostly blames Republicans for about everything imaginable, never taking responsibility. He and his subordinates have called Mr. Romney a crook, a liar, responsible for the all the evils ever to befall mankind. Then they get nasty.

Of course, Mr. Obama has taken his share of abuse, name calling and distortion. 

How does this play out? It is always important to look at each individual state. Total popular vote does not matter. Mr. Obama still seems to be doing well in many states crucial to the math of getting to 270 electoral votes. Until these so-called battle ground states turn to Mr. Romney, the President still looks good for re-election right now. 

However, the momentum is against Mr. Obama and there are many studies that last minute undecided voters swing in the final days. The President has to do something to stop the slide. An impressive second debate performance would help him, a lackluster one would cook him, I think. Expect him to do everthing to tar Mr. Romney, to try to scare people about him and to more than stretch the truth. After all, when there are no sucesses to crow about, divert attention. Play the blame game and say I am less bad than the other guy. 

So, there has been good news for Mr. Romney but this one has a time to go and is still unpredictable. Conservatives are definitely motivated to vote as well are union members and the leftist core of Obama's supporters. We shall see. It may turn on who is motived more. 

Budget Point of No Return

The below article appeared on MarketWatch.com

 

http://www.marketwatch.com/story/budget-deficit-reaching-point-of-no-return-2012-10-08?link=MW_story_investinginsight

By: Jack O. Nutter

 

The last fiscal year of the federal government is over. The results for the year were not good, not even fair. The government had a deficit of more than $1.1 trillion, accumulated at the rate of more than $3 ½ billion a day. In addition, the overall national economy is anemic, unemployment and under employment are at high rates. Many Americans are financially struggling just like the government, although in the case of the latter it just borrows more to pay its bills. 

Compounding the government’s fiscal problems is the breakdown of the political process. President Obama has never been serious in reining in federal borrowing and the opposition Republicans are stuck on a no-new revenue policy, which hampers their ability to find any comprehensive solutions.

The situation gets worse. There are all the expiring tax provisions-Bush era rates and employee payroll tax reduction to name only a few of the 140 or so expired or soon to be expired provisions. But wait, there is also the budget sequester, a yearly $100 billion plus reduction in budget authorization divided between defense spending and selected domestic programs. What next?

In my opinion, the national economy and the federal budget have reached a “point of no return.” The consequences of the point of no return are that the country either has to make the runway soon or will crash into the ground. Given the state of political affairs, I am not sure there will be a safe landing.

The Presidential Debate: Observations but Choices are Clear

The first joint appearance by Mitt Romney and Barack Obama took place in Denver last night. I watched only the first half hour as a flu bug was bugging me all day. I did see clips and read part of the transcript this morning. In all  things American, there must be a winner and a loser.

 Most analysts on the left and right have given the nod of victory to Mr. Romney. Of course, that does not count, only the results of the ballot boxes in 50 States and the District of Columbia will determine the winner.

 It is way too early to assess any real political consequences. I would guess the performance of Mr. Romney will lead to some voters giving him a second look and may energize his core voters in thinking he can win. The performances certainly were not a knock out blow for the President who enjoys favorable polls in many important states.

 A few observations are in order:

 1. Mr. Obama looked tired, sometimes nervous and fidgety. He definitely missed his favorite teleprompter.

 2. Mr. Romney has great hair. His chiseled looks and smile is right out of some movie producer’s casting couch.

 3. Mr. Obama made it clear, if there was ever any doubt, he believes in big government, larger government and more government. He also believes the government makes “investments” and has the obligation to make decisions that otherwise would be made at the local level  (i.e. education) or by the individual. Some people thing that is a good approach. 

 4. Mr. Romney came off as fairly reasonable and friendly person, not some ogre as portrayed. He still has the unwanted uncle air about him but we all have those kinds of people in our life. In contrast, I thought Mr Obama was a bit indifferent, distant and bothered by the whole process. I really do not want to invite either one over for a bar-b-que.

5. The President’s message to stay the course, everything is working, things will get better requires more than a leap of faith. Whatever suggestions he put forth are either not politically feasible, have been around before or just plain ineffective. He still does not get the deficit issue or does not he care. The lines about all the progress on cutting the deficit were just not believable.

 6. Mr. Romney tried his best to be moderate. He probably is a moderate anyway but knows he cannot win without the independent voters. He stayed away for the most part on  polarizing social issues but probably lost the PBS vote.

7. There are many real differences on issues. Energy, for example, is one. Mr. Obama believes in subsiding non-economical renewable sources and punishing coal and other fossil fuels in order to make up the pricing differential. Mr. Romney is a drill-baby-drill guy as well and a burn-baby-burn-that-coal guy. Take your pick- Solyndra or King Coal. Electric cars or gasoline.

8. Neither of the candidates understands the nuances of tax policy and did not explain very well the needed details. The stuff about oil profits said by Mr. Obama to help children is just plain demagoguery and shows a lack of any understanding of how the tax system works and how the government should work, actually. He only knows he wants the government to get more revenue. On the other side, Mr. Romney’s plan to cut rates is full of holes and fill in the blanks. 

 Just a few observations but maybe the most important one is the election just got more interesting and there is a clear choice to be made even though a person may not like the items on the menu.