Atlantic Sentinel

Author: Steve Keller

  • Barack Obama Deserves Second Term

    Regardless of whether or not this presidential election is a referendum or a choice, President Barack Obama deserves to be reelected on both counts. On the economy and foreign affairs, the Democrat has shown himself to be a better candidate than any of Mitt Romney’s public personas.

    The first issue of Barack Obama’s presidency was his handling of the economic collapse which is also his strongest case for reelection. The crisis left a classic liquidity trap in which demand had dropped to very low levels and interest rates had already been lowered to the minimum. This required an immediate Keynesian approach.

    By passing the Recovery Act and injecting $787 billion into the American economy only three weeks after his inauguration, the president stopped the ongoing hemorrhaging and quickly stabilized the markets. Despite near unanimous Republican political stonewalling, the president got billions of dollars into green energy investment, health information technology, middle-class tax relief and more.

    Investigators found minimal fraud and waste and given the impact it had on the economy, both short and long-term, the spending in sum appears to have been worth it: The economy rebounded with the stimulus saving or creating around two and a half million jobs. The recovery only really slowed down once governors began to institute austerity at the state level and Congress refused to renew any form of stimulus because of the perceived failure of the first round as well as its large impact on the deficit.

    However, the Recovery Act was uncommonly large because the slump was too — and it turns out more massive than the stimulus. The oft cited “promise” that unemployment would be at 6 percent right now is a canard, citing a projection, not a promise, by the transition team based on the belief that gross domestic product loss in late 2008 was 5.4 percent. It turned out that the contraction rate was 8.9 percent — unheard of since the Great Depression. Thus, a larger stimulus was economically necessary, though politically impossible.

    Having no stimulus? That would have resulted in a Second Great Depression, permanently less revenue and a larger weight in the safety net — much worse for the deficit than temporary spending.

    We know this because countercyclical spending has been economic orthodoxy since the 1930s. Democratic and Republican presidents alike have always spent money in some form to juice a down economy. When they haven’t, it has stagnated. This creates a natural deficit but that’s okay — interest rates are low during liquidity traps and are historically so right now.

    (Given that the task of economic stimulus is evidently incomplete, pursuing it or not remains the choice for the future.)

    Other issues are dwarfed by the president’s averting of economic catastrophe, yet still have large importance — especially in contrast to the plans of Mitt Romney and the congressional Republicans. (more…)

  • Ryan’s Struggles Betray Party’s Foreign Policy Rupture

    Foreign policy was once the purview of the Republican Party but since it launched two major wars in the Middle East with no exit strategy and no plan to pay for it, the party has found itself in quite the bind. Contrast this with President Barack Obama’s record of ending an unpopular war in Iraq, toppling Muammar Gaddafi’s regime in Libya with minimal use of force and no American casualties and the much hailed “pivot” to East Asia and Mitt Romney’s task to win back his party’s advantage on the subject becomes even more of an uphill climb.

    The Republican candidate has been particularly critical of Obama’s alleged “apology” tours. This focus on the incumbent’s attempts to improve America’s standing in the world may stem from Romney’s misfortune of representing a strikingly diverse constituency on foreign policy as compared to George W. Bush eight years ago.

    The party’s attempt to unite a warmongering neoconservative establishment with an anti-war libertarian constituency was perhaps no more evident than at this year’s convention. Glossed over in Clint Eastwood’s “old man and a chair” performance was the actor’s call for the United States to “get out of Afghanistan!” — a call that ignited raucous cheers from the crowd. (Imagine the reaction if a speaker did that in 2004.)

    But true to form, the crowd listened and cheered afterward when Mitt Romney called for more confrontation in the Middle East. (more…)

  • The Self-Fulfilling Prophecy of Mitt Romney’s Collapse

    A “convention bounce” isn’t news and it usually doesn’t last until November. Likewise, a week or so of lousy polls and bad news — even if it’s really, really bad news — doesn’t necessarily mean the end is nigh. Campaigns are about ups and downs. President Barack Obama and Mitt Romney should both expect highs and lows in the polls as election day draws nearer and so should each ticket’s supporters.

    But given the fundamentals of this campaign, the very fact that President Obama has pulled sharply ahead, even if only by a few points, is likely to keep him ahead. It will precipitate a series of reactions and missteps from Mitt Romney, allowing the Democrats to stick their convention bounce and ride on through to victory in November.

    In other words, the polls, usually a snapshot, are likely to be a self-fulfilling prophecy. (more…)