Thoughts on the 3rd Presidential Debate

I don’t know about you, but I’m glad that’s over with. We’re in the home stretch now with only two more weeks until the general election. Then we’ll have two whole years until the machinery cranks back up again for the next one.

Let me start by saying that sitting presidents have a major advantage when it comes to a debate on foreign policy because unlike their opponents, they can run on what they’ve actually done, rather than on what they say they’ll do. And as we all know, it’s much easier to be a Monday morning quarterback than to actually put troops in harm’s way. They also get to call themselves the Commander-in-Chief, as Obama did a few times.

That being said, I’d say President Obama had the slight edge although Mr. Romney didn’t cause himself any harm. I found that the candidates had shared much fundamental common ground and had to look for specific areas in which they differed. They also both spent a lot of time pandering to the Jewish/Israeli vote. Each one claimed to be Israel’s best friend. It got a little sickening after a while.

Romney started the debate trying to take the high road but Obama quickly went on the attack, after which Romney retorted that “attacking me is not an agenda”. I thought that was a good line on his part. I thought Romney also made a great statement when he said that it is America’s role in the world to defend freedom and promote the principle of rights, freedom, etc. and that we must be strong to lead. His other good soundbite came when he said “America has not dictated to other nations, it has freed nations from dictators”. I wonder who wrote that for him?

Obama blamed Romney for “wrong and reckless policies” and tried to associate him with Bush and Cheney, which is time we’d all like to forget.

Romney said he would pay for his increase in the defense budget by eliminating Obamacare and other (unnamed) unnecessary programs. Obama rightly pointed out that the math simply didn’t add up and that we’re already spending more than the next largest 10 countries combined and that he’s increased the budget every year in office. Obama kept pointing out that Romney wants to increase the budget when the military leaders haven’t even asked for the increase. Obama clearly won that argument.

Obama also scored points by rightly pointing out that Al Qaeda is weaker now than when he entered office. That is simply inarguable.

I also loved it when Obama quipped that Romney kept “trying to airbrush history” when referring to Romney’s position on letting Detroit go bankrupt during the financial collapse in 2008. The speechwriter who came up with that one should get a raise.

They each went on to talk tough about China and what they’re doing or what they’d do to bring big bad China to heel. The reality is that there is little they can do or will do. We cannot dictate economic policy to China as they are our largest creditor and our largest supplier of goods. We’re lucky China continues to trade their goods for our declining currency.

Again, no new policies or character traits were revealed. Each candidate stuck closely to their well rehearsed platforms and tried whenever possible to steer the discussion back to the domestic economy and their rivals failings. It was decent theater; nothing more.

Before I finish this I’d like to share an interesting theory being discussed today on CNBC as the market plunged almost 250 points. There is a thought floating around that a win by Romney would be bad for the stock market because he would likely replace Fed Chief Bernanke with someone less inclined to continue the current policy of quantitative easing. And if that’s the case, that could precipitate a dramatic plunge in the market as the punch bowl will have been taken away. I’m not sure if this is a valid premise or not, but it’s food for thought.

Thoughts on the 2nd Presidential Debate

Wow. That was more fun than the desultory first debate. Both candidates came out swinging. I thought President Obama did a much better job, and not just by showing more energy and more fire. I thought he was more articulate and passionate when describing his vision, and he more clearly laid out the differences between he and Governor Romney. Indeed, I thought we was simply more Presidential. Here’s what I came away from the debate thinking:

I simply can’t listen to Romney drone on any longer about his “Five Point Plan” and his ridiculous boast that he’ll create 12 million jobs in his first four years in office. It’s just too preposterous to be credible. Even less likely is his claim that he can balance the budget in four years while cutting trillions worth of taxes with offsets only in certain entitlements and deductions. The math simply does not work.

Romney attacked Obama for price increases at the gas pump over the past four years. The fact is, as Romney knows all too well, that market forces create prices, not the government. And Obama correctly pointed out that prices were much lower when he took office because of the financial collapse. Shortly before that, prices were equally high.

Romney was absolutely correct when he pointed out that the middle class has been hit by rising prices and falling real incomes. But it simply isn’t possible to eliminate all taxes on interest, dividends and capital gains for the “middle class” (however that’s defined). That was simply pandering. Obama, on the other hand, stuck to his message that he wants to raise taxes on the top income earners to help pay for tax cuts for that nebulous “middle class”. I wish someone would define that group for me. And explain how the middle class is the same in Nebraska as it is in San Francisco. I also wish the President would wake up and realize that increasing taxes on the top earners won’t even make a dent in the deficit. Only broadening the tax base, by increasing jobs, will do that. And raising taxes does nothing to help create jobs.

Both candidates evaded clear answers to the questions on women’s pay, immigration and guns because they feared any honest answers might offend their bases. How anyone can morally oppose strict regulations on the sale of automatic weapons is beyond me. Immigration policy is difficult but I believe that it’s in the greater good of the country to welcome productive people to this country and allow them to work. And I think Obama handled the question on Libya forcefully and with just the right amount of indignation.

One topic that was not addressed was the issue of women’s reproductive rights. I hope that this is raised in the final debate as the candidates should be compelled to state clearly their positions on this important issue.

Finally, when asked about his last four years, Obama was clear and concise when detailing each of his accomplishments and the promises he’s kept. Romney was equally cogent in his description of those areas where Obama didn’t keep his promises and where he has “failed”, most importantly with an economy that he grown at an every slower rate over the past three years. That might be the most damning argument against Obama at this point.

Ultimately, I’m not sure this debate will change anyone’s mind about who they’re voting for. I think what it likely did was simply make their positions more clear. And the reality is that much of what happens in the  economy is simply beyond the control of our Chief Executive. Market forces dictate the ebb and flow of the economy, and those forces are not quick to change. So I think we are left to vote on moral, or conscience, issues.

Thoughts on the 1st Presidential Debate

Last week President Obama and challenger Mitt Romney squared off in the first of three debates. It is widely reported that Romney “won” the debate and gained some momentum in his otherwise stagnant campaign. Personally, I thought Romney came off as a bit more forceful and more conversational than I had seen him previously, while Obama didn’t seem to bring his A game. That being said, I don’t think it will swing the election to Romney; I still believe Obama will win a tight race.

Clearly Romney was prepped very well. While both candidates hammered their messages wherever possible, the former governor appeared more decisive and engaged. A few thoughts:

  • Romney asserts that his energy program would create 4 million new jobs. That’s an absurd claim and one that he never bothered to back up with any facts. Even more implausible was his proclamation that he would somehow create 12 million total new jobs. We are creating around 125,000 jobs a month now. If we double that, which isn’t likely, it would take five years of uninterrupted growth to get there. Does that seem reasonable to you? It simply can’t happen.
  • Throughout the debate Romney tried to position himself as the champion of the middle class, which after his 47% remark came off as a bit disingenuous to me. That being said, he was absolutely correct when he said that price increases crush the middle class. That is the brutal effect of inflation.
  • Romney was clearly pandering to middle America by claiming to support coal, which is on its way out as an important power source in this country. It is too dirty and has been supplanted by cheaper natural gas.
  • Romney hammered Obama for proposed tax cuts on the military. The truth is that our military budget is larger than the next dozen countries combined and can easily be reduced without sacrificing our defense one bit. Cuts must be made as part of a larger effort to reduce the deficit.
  • Romney was correct when he stated that raising taxes, as Obama proposes, will likely slow economic growth and stunt job creation. The best way to increase tax revenue is to broaden the tax base, not increase the tax burden. I also agree that we should move more spending from the national to the state levels.
  • I don’t understand how Romney can justify his opposition to Obamacare when it is build on virtually the same model as the health care program he instituted as the Governor of MA.
  • Obama correctly hammered Romney on his lack of specific details in his economic plans. It’s easy to say you’ll reduce taxes, add jobs and reduce the deficit. It’s harder to show how that’s actually possible. 
  • Romney had the best line of the night accusing Obama, with a nod to the Reagan-era, of “trickle down government”. I like that a lot.

Overall, Romney came across as better prepared, more on point and better engaged while Obama was hesitant and disengaged as he attempted to remain above the fray. I’m sure that will change with the next debate. Still, the debate is simply a beauty contest; more style than substance. It’s still Obama’s election to lose. And it’s one in which every American should vote because it affect’s your money and your life.

The Unemployment Rate Goes Down – What A Surprise

This morning the government reported that the unemployment rate for September dropped to 7.8% from 8.1% the prior month (and 8.3% the month before that). This is the lowest figure since March 2009. Hard to believe the government would report such a favorable number a month before the election, right? Hmmmmm.

As reported by the household survey, the number of unemployed persons was 12.1 million, down 456,000 from September. That’s a big decrease. Total employment rose by more than population growth. It was also reported that 114,000 new jobs were added in the month, basically in line with market expectations. And 86,000 jobs were added to the July and August totals by revisions, which suggests that the September number will be revised higher in subsequent months.

Just about any way you look at it, this was a positive number and cannot but help the chances that President Obama will be re-elected. It will also provide further headwind to a stock market already in rally mode. I’m not suggesting that the numbers are fraudulent, but I do believe, as I wrote in my last column, that government statistics cannot be trusted without deeper scrutiny and that they can be manipulated to serve those presenting them. So make of this report what you will.