A Much Needed Win

It seems that we suddenly have a presidential campaign. Only a few days ago, the media was preparing Governor Romney's obituary, concluding that his thus far moribund campaign was essentially over. However, Romney's performance in last night's presidential debate exceeded all expectations and, for his supporters,
their wildest hopes. He managed to dominate the discussion, putting a befuddled President Obama on the defensive, while presenting himself as well-informed, presidential, and likable.

One of the most telling signs of Romney's successes was Obama's body language throughout the debate. The president was consistently scowling, grimacing and shaking his head in disagreement. He looked confused, unprepared and ill-at-ease. At one point, a camera shot of the backs of the two candidates revealed that while Romney was standing straight and tall, Obama had nervously bent his knee and was rolling his foot behind the podium.

Obama's jittery-ness was in stark contrast to Romney's poise—both in his body language and his speech. The governor was clearly well-prepared and not only defined the scope of the discussion but had reasonable and succinct responses to every attack from the president. This left Obama with little choice but to continuously harp on tired and refuted talking points; for instance, the ineffectual attack on corporate jet owners and constant reiteration of a bogus $5 trillion tax-break.

Yet what was most interesting about Romney's performance was that he displayed a couple of characteristics, previously absent from his campaign, in the most flattering manner. First, he had a clear and convincing message. He carefully outlined his thoughts and principles on a wide-array of issues and policies. While the president claimed Romney did not offer specifics, this charge fell rather flat. In contrast to his campaign so far, Romney was a man of ideas and solutions. He offered a vision for the country, which displayed that he could succeed as a leader.

Up until the debate, this has been a horrendous failure of the Republican campaign, which has largely focused on attacking the president without offering much in the way of alternatives. There was some hope that by bringing the wonky Paul Ryan onto the ticket, that Romney would delve into policy. However, the opposite seemed to happen, with Ryan's intellectualism being silenced in favor of Romney-esque stoicism. This, as the campaign's poll numbers showed and the pundits screamed, was a foolish tactic.

However, last night's volte-face appears to have moved the campaign in the needed direction. CNN's live tracker, which followed the real-time sentiments of undecided Colorado voters, confirmed the merits of offering arguments about policy and principles. When either candidate spoke about his ideas the voters responded favorably, when they attacked their counterpart the voters soured. It seems that despite the accepted "wisdom" that negative campaigns work, voters want to hear proposals.

Second, Romney finally shed the defensive stance he has held throughout the campaign. Previously, Romney frequently looked like he was trying to back away from an issue or deny responsibility. This made him appear to be weak and indecisive and allowed Obama's attacks to stick. However, last night he was a different man. He owned his record and beliefs and explained why they are right. He fought back against the president's distortions and explained nuances in a clear and reasonable manner. This made Obama look petty and dissimulative, while giving the viewer a logical argument about the veracity of the Romney-way.

This simple tactic of owning and then explaining his principles and beliefs was an enormous step toward strengthening Romney's campaign. Voters want a leader who is confident, who has ideas, and who is able to explain his policies in a nuanced but understandable manner. The Romney who was on display last night succeeded at all of this.

Hopefully, he will maintain this momentum. Obama will undoubtedly come to the next debate more prepared. Romney has to continue to shine, turning his campaign into an expression of his vision for the country, while defending his principles and policies with poise and candor. While the election is quite near, Romney still has time to make his case. A Romney in this mold will be hard to beat.

Ship the Outsource Debate Overseas

Outsourcing (or offshoring) seems to be the political battleground of the week. Both presidential campaigns have launched into a finger-pointing offensive of claiming their opponent has contributed to the shipment of American jobs overseas. The outsourcing debate was sparked by an investigation into and a series of poltical attacks at Romney's activities at Bain. The Republican campaign retorted with recriminations regarding the handling of stimulus money.

While we'll leave the fact-checking to the newspapers, the entire debate is somewhat ridiculous, particularly from Romney's perspective—the supposed voice of economic reason during this electoral season. It is based on the ludicrous proposition that outsourcing jobs is an absolute negative for the U.S. economy. In simplistic political-speech, which assumes Americans are just too stupid to understand basic economics, the argument holds that when a company either hires a foreign company to perform a specific task or moves operations abroad that it is a unilateral loss for the domestic economy.

The first time I saw this "negative" ad from the Obama campaign, I could not help but think that the gist of the comments was true and Romney should proudly own it.

But such arguments ignore basic economic truisms that are taught in any introductory economics course. Trade, whether domestically or internationally, benefits everyone. The simple concept of comparative advantage—the situation in which one producer can produce a good relatively cheaper than its competitors—underpins this logic. By definition, every producer will have a comparative advantage, thus yielding an economic logic for specialization and trade.

In simple language, this is precisely what motivates outsourcing and offshoring. Other countries have a comparative advantage in labor. It is thus relatively cheaper for them to "produce" labor. Since they are comparatively better at labor, trade frees up American resources to do what we are better at (such as research and development). We can then, for instance, trade our research for their labor, creating products that benefit both sides of the transaction at a cheaper price. This specialization and trade helps both economies grow.

The real world is naturally more complicated (short-run costs of reallocating resources are very real), but the essence of the argument holds. Outsourcing and offshoring are good for the U.S. economy (if they are done without distorting effects of government meddling). But one must look at the entire effect, not just the outsourced job to appreciate this dynamic.

So how does outsourcing help? An outsourced job means that a domestic company can now get the work done for a cheaper price (it would not outsource the job if it was more expensive to do so). This frees up resources (money) to put to other uses. A company can either cut costs, passing along savings to consumers (maybe in an attempt to increase market share) who can then save or purchase more, or reinvest the saved money into expanding the business. In truth, both probably occur and both help grow the economy. As is usually the case, a growing economy creates new jobs, most likely in sectors in which the country has a comparative advantage.

If one thus looks at the economy on a holistic level, a cheaper input to production (cheaper labor abroad) will generally help an economy grow and create more jobs. A smart business leader, economist, or president will acknowledge that it is best to have the most efficient producer or worker do the job, regardless of national borders or any other consideration. Outsourcing is thus one piece of a broader economic puzzle, which allows an economy to operate at its highest and most efficient level.

But our politicians never try to explain this basic economic fact. Whether they think Americans are unable to comprehend such simple economics or are they beholden to special interests, both the left and the right seem to be stuck to a pseudo-protectionist argument. Arguably, much of this tenacity to the outsourcing-is-evil argument is due to political expediency. It is much easier, in a world of sound-bites, to make a a simple accusation of sending jobs to India, than explain an economic principle. But such expediency is damaging, not only by dumbing-down political discourse but by empowering certain groups to take-advantage of such language to further their own narrow desires (think unions and noncompetitive industries who want protection).


The Romney campaign would be wise to take a new angle in this debate. Much as New Jersey Governor Chris Christie does, Romney need to take an approach of separate, own, and educate. He needs to separate the fact from fiction, dismissing Obama's ridiculous conclusions about outsourcing, proudly own what he has done, and educate the people on why such actions are good. In other words, Romney has to stop looking like he is running from some greedy business transactions and start explaining how a smart economy works.

Such a change in tactic would not only benefit the United States by pushing our economic policy toward sound principles, but greatly help the Romney campaign. He'll regain the image of a responsible and educated economic steward, earn respect for standing up to smear campaigns and distortions of economic facts, make Obama look like the economic lightweight he is, and rise to a presidential level. It is a novel political strategy, but one that if properly employed will reap tremendous rewards for a candidate who is too often criticized for lacking a backbone.

He "Deserves" a Second Term?

If Obama's arrogance and sense of entitlement have not yet come through in his policies and his speeches, he has made it abundantly clear, in a recent interview with NBC's Matt Lauer, that he deserves a second term. When questioned yesterday by Lauer regarding Obama's 2009 statement, "“If I don’t have this done [the economy fixed] in three years, than this is going to be a one-term proposition,” the president responded by stating “I deserve a second term but we're not done.”

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Regardless of what one thinks about his policies, the hubris that emanates from such comments is revealing. As he has repeatedly demonstrated, Obama's leadership is steeped in a worldview that consistently demands and expects some to provide for others. His mentality and his policies are one of entitlement and obligation, unfortunately in direct contrast to an ethos of individual responsibility and self-reliance. This view is apparent whether the state is obliged to provide health insurance for all, bankers or the rich owe their money and wealth to others, or, now, the American people owe Obama a second term, presumably for his "well-deserved" hard work.

No Black Eyes

The Republican primaries are getting ugly. Mitt Romney and Newt Gingrich have been attacking each other with venom in their quest to secure the GOP's nomination. And while last night's debate in Florida had quite a few moments of real issue-based discussion—NBC's moderator, Brian Williams, should be commended for running a respectable and informative debate—a large portion of the debate descended into ad hominem attacks between the two front runners.

The termination of all personal attacks in election campaigns would be a noble and significant goal, however, it is probably unrealistic. The electorate too often jumps on juicy and vitriolic stories and character assassinations, even if voters simultaneously claim to abhor such behavior. The truth is that such tactics unfortunately work and candidates know this.

However, if running only issue-based campaigns is too lofty of a goal in general election campaigns, it is indubitably wise to terminate these tactics in party primaries. While primary candidates are rivals they are also allies in a broader conflict. By relying on tactics that may further their immediate goal, they often simultaneously undermine the longer-term goal. In the interest of winning the metaphorical war, not just the battle, Republican presidential candidates would be sagacious to change their tactics quickly.

By attacking each other in such personal ways, whether drawing out Herman Cain's infidelity, portraying Mitt Romney as a rich, out-of-touch, low-tax-paying elite, or labeling Newt Gingrich an "influence peddler," Republican candidates are only doing the Democrats' dirty-work. The GOP campaigns are unearthing truths and partial-truths that the Obama campaign may never have seized upon and will certainly use in the general election. This has gone a long way towards facilitating the reelection of Obama, particularly as the primaries head towards the spring.

Even more damning is the fact that the Republican candidates are systematically tearing each other down. These candidates seem to be forgetting that while they are currently competing for the votes of Republican primary voters, they are also being watched by the independent and liberal voters that they need to sway the general election towards the right. The things they say now will stick; if, for instance, Romney is successfully portrayed as an elitist, it will be hard for him to shake that image over the summer and fall.

Whether Mitt Romney or Newt Gingrich ultimately wins, the loser will inevitably endorse the nominee. Neither prefers Obama over his Republican rival. Yet after such a brutal campaign it is hard to see either able to successfully stump for the other, particularly when there are hours of footage personally castigating the former rival. Instead, the ultimate winner runs the risk of  Pyrrhic victory, defeating his Republican rival only to face Obama in a beauty contest with two black eyes and a chipped front tooth.

The primary campaign should be a time of sincere and honest discussion over issues. Candidates should attempt to distinguish themselves on the subtleties of their positions and the nuances of their beliefs. It is okay, even necessary, to indicate how one candidate differs from his opponents. Republican voters should know which type of conservative candidate they are selecting. Ron Paul's interactions with the other candidates are usually exemplary in this regard. Paul, for example, outlines significant differences in his foreign policy beliefs. He will criticize the mainstream Republican foreign policy, but rarely descends into personal attacks. This behavior is generally reciprocated by Romney and Gingrich, who may call Paul's foreign policy dangerous [it is] but do not attack the congressman personally. As a result, Republican and non-primary voters are informed and learn a bit more about their prospective presidents.

This is how a primary campaign should be run. It should be about the issues, not about deconstructing an opponent's character or personal life. Lively disagreement and debate is a must, but ultimately the GOP is a team. The candidates should compete vigorously, but not in a way that undermines the ultimate goal. They should fight on the issues not on the alleged personal failures of their Republican rivals.

Newt Undermines GOP Arguments on Capitalism

A desperate and angry Newt Gingrich has relinquished his remaining grip on smart primary campaigning and unleashed an all out assault on Mitt Romney's economic record – and, by association, capitalism. Gingrich's attacks on Romney's experience, however, only serve to undermine Gingrich's stance as a responsible, non-negative campaigner and isolate him from the sensible Republican voters whom he needs to court to have any chance at receiving the GOP nomination.

However, aside from the damage that such attacks seem to be having on Gingrich's campaign, this anti-capitalist line of campaigning is causing monumental damage to the very economic basis that the Republicans are supposed to defend. In his quest to take down his rival, Gingrich is relying on the same Occupy Wall Street-style rhetoric that dominates the left. (To be fair, Governor Rick Perry has resorted to similar tactics, as the WSJ reports.)

The pernicious results are, at least, twofold. First, these attacks greatly help the Obama campaign. These are the precise attacks that the anti-freedom, anti-capitalist forces of the left will unleash on Romney come the general election. There could not be a better way to bolster their argument than by dishing it out for them. As the presumptive nominee, Romney will have an uphill battle to convince those who succumb to the easy anti-capitalist rhetoric that bashes the free market system. Obama can only be gleeful to have help in his mission in the form of Newt Gingrich.

Secondly, and arguably more importantly, Gingrich's attacks solidify misconceptions and distortions about how the free market works. The underlying assumption in his argument is the same as those held by the worst populists in OWS and the anti-Wall Street fringes of the Tea Party. The central argument is that somehow those who have money must justify their possession based on some social, communal good. This is simply false. The freedoms of the American political system guarantee that individuals have the right to their property. Provided they do not engage in illegal activities, individuals have no obligation to justify their earnings to the state in any regards. In other words, the rich, the middle-class, or the poor, need not demonstrate a social purpose or benefit from their occupation in order for the state to deem it acceptable. A free market functions precisely because no government body determines these things.

However many populists and the left implicitly rely upon this assumption when attacking the "rich." Accordingly, they argue that financiers cannot justify a socially-beneficial purpose and thus their "unjustly" earned wealth should be, at least partially, relinquished to the state. Gingrich has gone on record stating that the likes of Bill Gates, Steve Jobs, and Sam Walton deserve their billions because they invented something real. By contrast, goes the argument, Wall Street is just a "handful of rich people [who] manipulate the lives of thousands of other people and walk off with the money...."

This is a gross distortion of the role that finance plays in a capitalist system. Finance is an essential service – it moves capital from those who possess it to those who can use it best. It allows entrepreneurs, who do not possess the needed resources, to obtain them fairly and efficiently. And like anything in business, sometimes it succeeds and sometimes it fails. Capitalism's success is not because it always creates jobs, but that it allows resources to be successfully and most efficiently allocated to the right places, something no one person or institution (government) could do alone. This inherently implies hiring and firing, buying and selling, and investing and divesting. Firing, for instance, moves labor from an area that does not need it and thus frees it up to be used in a more productive fashion.

But Gingrich's attack plays into the leftist and populist rhetoric that ignores the importance of finance. Not only does it confuse voters who are unfamiliar with finance, providing fodder for the left to continue the myth that finance and Wall Street are greedy robbers that need to be stopped by the government (Progressive blogs have jumped on this Gingrich quote.) but it does a great disservice to the purported Republican goal of changing the direction of this country.

Gingrich should be ashamed at such low-brow politics. As an academic and a genuinely smart guy, he must know that the quest to hold political office should not undermine the long-term goals of righting the direction of this country. Relying upon political expediency rather than education only reinforces the anti-free market myths that dominate the public sphere. Republicans have unfortunately excelled far too much at this game. They choose to battle on the Democrats' terrain, using leftist arguments and thus continuously fighting on the defensive. The GOP will only be able to transform this country if it starts to think for itself, if it directly targets these sort of implicit assumptions that underline much of the political dialogue and replaces them with truth. Gingrich's behavior flies in the opposite direction by not just failing to break down the "Wall Street" is bad assumption but strengthening it.

Grabbing the Center

Elections are won and lost in the center. So seems to be an increasingly vocalized mantra from some of the more sensible on the right. The argument is fairly simple: while America is generally a center-right country, a large number eschew extreme candidates, whether on the far left or right. The politician that can successfully grab the middle stands to win the election.

Some conservatives, though, have long been arguing against this perspective, claiming instead that a more "pure" (read: further right) candidate is needed. But this logic fails. The far-right will vote for a moderate conservative over the leftist Obama, and, given their intense dislike of the incumbent, will undoubtedly head to the polls for Mitt Romney rather than seeing the president re-elected.

The independents, those who voted for Obama three years ago and are now sorely disappointed, will be more hesitant to vote for what appears to be an extreme GOP candidate, than a more moderate one, like Romney. Since, these are the powerful swing voters, their apprehension could be disastrous, giving Obama yet another four years.

Karl Rove, architect of the Bush Jr. campaigns, seems to agree. He has argued that a successful candidate needs to draw votes from both the left and the right and be representative of all of America. This is the strategy that worked for the "Big-Tent" Republicanism of Ronald Reagan, who created an entire new group of Democrats - the Reagan Democrats.

In the Wall Street Journal, syndicated radio show host Michael Medved provides a powerful argument to this effect.  He concludes:

In short, the electoral experience of the last 50 years does nothing to undermine the common-sense notion that most political battles are won by seizing and holding the ideological center. In the last two presidential elections, more than 44% of voters described themselves as "moderate," and no conservative candidate could possibly prevail without coming close to winning half of them (as George W. Bush did in his re-election). 

The notion that ideologically pure conservative candidates can win by disregarding centrists and magically producing previously undiscovered legions of true-believer voters remains a fantasy. It is not a strategy. At the moment, it is easy to imagine Mitt Romney appealing to many citizens who would never consider Rick Perry or Herman Cain. It is much harder (if not impossible) to describe the sort of voter—Republican, Democrat or independent—who would refuse to support Mr. Romney (over Barack Obama!) but would somehow eagerly back Messrs. Perry, Cain or Gingrich, let alone Michele Bachmann, Rick Santorum or Ron Paul.

Conservatives, as well as their moderate and progressive neighbors, may have plenty of reasons to oppose Mitt Romney in favor of some rival candidate. Electability can't reasonably count as one of them.

Ideology certainly has its place, but those that are truly committed to correcting the misguided course this nation is on must be careful not to be blinded to their own detriment. Democracy is fundamentally about compromise, even if a compromise is worse than some alternative "pure" option. If the Republicans want a seat at the table, if they want to be able to influence the direction of the country, they must be politically smart as well.

Chris Christie: In It, To Win It?

The New York Post reports that New Jersey Governor Chris Christie has stepped back from his adamant refusal to run for president and may be jumping into the race. According to the report, Christie will provide an answer this week "after getting lobbied hard from some of the GOP’s top leaders and money men."

The Post states that Christie has offered criticism of the current batch of GOP candidates, arguing they are not providing voters with the answers they are looking for. Christie stated:

I think what the country is thirsting for, more than anything else right now, is someone of stature and credibility to tell them that and say, ‘Here’s where I want us to go to deal with this crisis.’... The fact that nobody yet who’s running for president, in my view, has done that effectively is why you continue to hear people ask [Indiana Gov. Mitch] Daniels if he’ll reconsider and ask me if I’ll reconsider.

Christie's entry would certainly unsettle what has become essentially a two-candidate race. Current front-runners Mitt Romney and Rick Perry have seemingly taken the lead not because of any intrinsic qualities but because they are merely better than the rest of the pool. Romney would certainly do a commendable job as president but is rather bland and not overly appealing to the Tea Party-base. This has allowed Perry to steal part of the spotlight. However, some of his positions and unfortunate gaffes have put the essential independent voter ill-at-ease with his candidacy.

Christie would undoubtedly break the mold. As the pugnacious Republican governor of the very Democratic New Jersey, he has been able to appeal to independents and some Democrats. His no-BS style is precisely what the electorate wants in Washington. In many ways Christie is the opposite of Obama—he is a leader that eschews the pettiness of politicking and pushes through needed and helpful legislation. His early battle with the teachers unions demonstrate his ability to stand behind necessary legislation despite misleading rhetoric from opposition special interests.

Christie is precisely what the Republican Party needs—a candidate that can fire up the base, appeal across aisle, and honestly and forcefully communicate a better way forward. While Obama's odds of reelection are slipping of their own accord, Christie would offer the best chance of a desperately needed change in the White House.

Obama Turns to the Rabbis

President Obama is starting to worry about the growing divide between the administration and American Jews, a normally solid constituency in the Democratic base. Last week's special election in NY represented the most recent signal of the Jewish voter's distaste with Obama's administration.

According to recent Gallup poll numbers, 40% of Jews disapprove of Obama, while only 55% approve of the president. This represents a sharp falloff from historical numbers. Obama received 78% of the Jewish vote in the 2008 election.

Aside from general economic concerns, much of this decline in support is due to Obama's lackluster policies in the Middle East. His attempts to push an Arab-Israeli peace have unsurprisingly backfired. His two major sins—pushing Israeli PM Netanyahu on settlements and demanding an agreement based on the 1967 borders—have greatly angered many Jews. These policies have led to stalemate, as they forced both Netanyahu and Palestinian President Mahmoud Abbas to become locked into non-negotiable positions.

Obama's naive meddling has led to the most recent disaster today at the UN—a unilateral call for statehood by the Palestinians. Not only has this dealt a blow to the possibility of peace, but it has put Obama in an untenable position. If, as expected, this petition goes to vote in the Security Council this coming Monday, the United States will use its veto, undermining Obama's futile attempts to reach out to the Arab world. The administration's poor foresight has boxed them into a horrible corner, leaving them with little saving grace in the eyes of the international community. Somehow Obama has managed to anger everyone on all sides of the issue.

While there is little to be done about the international community at this point, Obama is apparently desperate to shore up the Jewish vote—a key constituency in what is an increasingly uphill battle for reelection. Obama  has directly reached out to a wide community of rabbis, attempting to garner Jewish support by sprinkling High Holiday^[1] sermons with administration talking-points:

...[T]he Obama administration on Thursday convened a conference call with several hundred rabbis and Jewish leaders. According to a participant on the call, President Obama promoted his jobs bill—noting that those who have been more blessed should pay their fair share—and briefed the rabbis on U.S. efforts to counter the push for a declaration of Palestinian statehood at the United Nations.

Phone calls with religious leaders is apparently a regular event, but one that has increasing importance as the president gears up for the 2012 election. The administration is clearly on the defensive, sending out Democratic National Chairwoman Debbie Wasserman Schultz (a Jew), to assure pundits that Obama has firmly maintained the Jewish vote. Wasserman Schultz rejected any indication of trouble with the Jewish vote, stating:

That is absolutely not the case, and it will be demonstrated in the election next year that the natural home for Jewish voters, both domestically in terms of policy and in our Israel policy, is the Democratic Party and President Obama as our candidate.

Wasserman Schultz must either live in la-la land, oblivious to the poll numbers, or simply be hoping that if she states the illogical enough it will become true. Unfortunately for Obama, it is unlikely that simple rhetoric will help his waning support among Jews—or other demographics, for that matter. If Obama wants to win reelection he has to change his strategy: cut out the meaningless speeches and actually show some good policy. The administration needs to turn around the economy and straighten out foreign policy, not beseech rabbis to indoctrinate their congregations.

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Note:

[1] The Jewish High Holidays, Rosh Hashanah (Jewish New Year) and Yom Kippur (Day of Atonement) will occur over the next two and a half weeks.