Foreign Policy Debate

It's agreed by Obama and Romney,
As incumbent and GOP nom'nee,
That nothing impairs
One's foreign affairs
Like a shaky domestic econ'my.

Says Obama: "My answer to threats,
Which America constantly gets,
Is one that renews
Or else we'd still use
The cavalry and bayonets."

Says Romney, expounding on Syria:
"My policy on the extyria
Is the same as Obama's
Except that I promise
To be just a little supyria."

The third and final Presidential debate took place Monday night, and for me, three elements stood out: President Obama took an aggressive stance from the beginning and even landed a few "zingers"; Governor Romney largely seemed to agree with the details of the President's foreign policy and, as in the prior debates, appeared to moderate the more hardline aspects of positions he took in the primaries; both candidates agree that a strong economy is the foundation of a strong world power, and in fact would rather pivot away from the latter and focus on the former.

College Choice

The candidates tried to explain
How to lessen America's pain
From tuition and fees
That pay for degrees
Of commercially dubious gain.

Said Obama: "I'd like to enhance
Federal aid, be it loans or Pell grants;
Though I'm hopelessly lost
On containing the cost,
At least I will get you financed."

Said Romney: "The government's never
Very good, but the market is clever;
So you're out on your own
To get your own loan,
Where-, how-, from whom- for what-ever."

Said neither: "On loans, I will let it
Be decided by factors of credit,
So that those who can show
That they're getting to know
Something useful are those who will get it."

The US Presidential election is two weeks away and the final debate is this evening, but so far both candidates have gotten away without putting forth an effective plan to address the looming higher education crisis. We have a vicious cycle of ballooning student debt to pay for rapidly rising costs of education which, in all to many cases, does not prepare the graduates for a gainful career, and hence offers no hope of repaying those mountainous loans. Both President Obama and Governor Romney would do well to take a page from the book of my friend Jay Hallen, who proposed in the National Review that the provision and pricing of student loans should be based on the likelihood of repayment, as is the case with any other type of loan. This would have the effect of directing student loans to where the economy most needs them, i.e., toward programs that prepare students with the skills that employers most need.

Them's Fightin' Words

Said an on-the-fence guy to his mama,
Watching Romney debating Obama:
"I enjoy when attacks
Are short on the facts
And long on political drama."

Last night's debate between President Barack Obama and his Republican challenger, former Governor Mitt Romney, seemed to generate more "woo-hoo" than "a-ha" moments, and to judge by my Twitter stream, folks like it that way. The debate was notable for the return of a spirited, feisty President, snapping out of the torpor of his first-round performance. The challenger, by contrast, seemed at times awkward, at times bullying. This aspect of the debate culminated in Mr. Obama's hard staredown over the issue of how his administration handled the Benghazi attack.

Then too, many people seem to have drawn way too much amusement over Mr. Romney's recounting of the "binders full of women" that he received while choosing his cabinet as Governor of Massachusetts.

Missing, however, from both the candidates and the softball questions pitched by the "undecided voters" at the Long Island town hall, were specific challenges and statements regarding the fiscal cliff, the mortgage malaise and the developing student loan crisis. Could it be because there are no easy answers? Finally, although President Obama correctly pointed out the flaws in Mr. Romney's tax & budget math, Mr. Romney lost an opportunity to reciprocate with the President's numbers, which also do not quite add up.

Deductive Reasoning

Said a tax analytical gent:
"One should always make clear one's intent
On cutting deductions
To pay for reductions
In tax rates by 20%."

"Many have tried to appraise
The most likely of Mitt Romney's ways
Of sparing the loss
Of defraying the cost
Of the mortgage the middle class pays."

"Though the Gov'nor himself may not say
With what tax breaks he's doing away,
It's safe to foresee
Under Romney there'd be
Less incentive to do Schedule A."

'Twas not a gent, but a lady - Texas tax journalist Kay Bell - who analyzed Governor Mitt Romney's recent statements about his tax plan and concluded that "Romney left himself some wiggle room" in the degree to which his plan would keep the mortgage interest deduction. Says Ms. Bell:

He didn't say the mortgage interest and charitable gift deductions would remain just as they are. He said there would still be 'preferences' for them. Just spit-balling here, but since Romney again reiterated in that same Situation Room interview that he would limit deductions "particularly for people at the high end" of the income scale, it looks like some of Mitt's personal wealth peers might not get as much Schedule A bang for the tax buck as they currently do.

But would limiting some mortgage interest and charitable deductions be enough to make his tax plan revenue neutral as he insists it will be? Not many people outside the Romney campaign think so.

Though the Republican Presidential nominee hotly denies it, the non-partisan Tax Policy Center has concluded that his plan amounts to a $5 trillion tax cut over a decade, heavily tilted toward the rich, which could not be made revenue neutral without raising taxes on households with income below $200,000.

Big Bird Trilogy

Said Romney: "I find it absurd
Giving federal support to Big Bird.
To feather his nest
Leaves our budget distressed -
Free markets are really preferred."

"Though he helps us to learn ABCs,
Our country is fiscally squeezed,
And funding this fellow
Who's goofy and yellow
Means borrowing from the Chinese."

"In our nation's historic chronology,
We patriots make no apology
To assert: win or lose
It's our birthright to choose -
'Give me freedom before ornithology.'"

Debatable Figures

Presidential debating is won
When the relevant numbers are run:
The percentages which
Tell the poor from the rich -
99, 47 and 1.

Did President Barack Obama have an esprit de l'escalier last night? That's French for the moment when you realize what you shoulda said. He and former Governor Mitt Romney met for their first debate, and most observers called the contest for the challenger. Not only did the President lack the Governor's energy and enthusiasm but, in a debate that stood out for its polite, boring tone, Mr. Obama passed up repeated opportunities to score points with incendiary references to Mr. Romney's "47%" comments. Perhaps he was distracted by the 20-year figure, as in his wedding anniversary so awkwardly hijacked by the debate.

Romney's Good Idea

Said a policy wonk named Maria:
"We're in need of a tax panacea,
And I'm hearing that Romney,
The GOP nom'nee,
Has floated a clever idea."

"Mr. Romney proposes to cap
Those deductions it's too hard to scrap,
To bolster his case
Of broad'ning the base
While constricting the deficit gap."

"Though a limit of 17G
Balanced budgets will not guarantee,
I'm glad to see some
Specificity from
This heretofore vague nominee."

On the day before his first debate with Pres. Barack Obama, Mitt Romney introduced an intriguing(*) new element into the campaign with a proposal to cap personal income tax deductions at $17,000. Among the blognoscenti and twitterati, the electrified reaction was: "Tax specifics from Mitt Romney? Stuff just got real!" The concept is simple, but elegant: Romney would like to lower tax rates while broadening the base, by eliminating deductions, exemptions, credits, etc. Since each of those tax expenditures comes with a constituency that will fight to keep it, one simply sidesteps those fights by keeping all the loopholes, but limiting one's capacity to use them. In Romney's own words: "As an option you could say everybody’s going to get up to a $17,000 deduction; and you could use your charitable deduction, your home mortgage deduction, or others - your healthcare deduction. And you can fill that bucket, if you will, that $17,000 bucket that way."

Now, as Josh Barro explains in Bloomberg, even a simple and elegant proposal has the devil in the details. Moreover, it's likely that this cap will not be enough to pay for the across-the-board 20% tax cut that Mr. Romney wants. However, as we chew over this interesting new idea, it pays to remember that the perfect should never be the enemy of the good.

(*)As always, I am required to disclose that the use of the word "intriguing" signifies a good idea from someone with whom I generally disagree.

Let Them Eat Vouchers

Unguarded remarks are the bane
Of many a White House campaign;
It's hard to promote
The popular vote
From people you clearly disdain.

For example said Governor Romney,
The Republicans' President nom'nee:
"47%
Will never consent
To pull their weight in our econ'my."

While confiding in generous friends,
Mr. Romney ineptly offends,
Since half of the tax-free
Are elderly, actually,
On whom his election depends.

Several months ago, Mitt Romney held a candid Q&A session with well-heeled supporters at the Miami home of hedge fund manager Max Leder. In refreshingly (for him) blunt terms, Gov. Romney discussed the strategy and tactics of his campaign. In one point, however, Mr. Romney was a little too blunt, asserting that President Obama's core support derives from the 47% who pay no federal income taxes and purportedly expect a litany of free government services. "My job is is not to worry about those people," Romney said. "I'll never convince them they should take personal responsibility and care for their lives."

If you're not too stunned by a Presidential candidate dismissing half the country as freeloaders, consider the following:

• The original video of Governor Romney with his donors, published by Mother Jones; 
• An analysis by Slate's Dave Weigel of why "the 47%" are not who the Governor thinks they are; 
• The National Review's Ramesh Ponnuru on why conservatives need to let go of the "47%" meme. 

Swing States

It's an axiom proven and tested
By candidates besting and bested:
If you're looking to win,
Mind the jobless rate in
All the states where the outcome's contested.

As we all know, the economy - especially employment - is the main issue in this 2012 Presidential campaign. If the pace of job creation quickens to the extent of reducing the national 8.3% unemployment rate, those undecided votes swing to President Obama; if it doesn't, the advantage goes to the challenger, Mr. Romney. That's why, in this summer of our discontent, it has to raise concerns and hopes respectively that the unemployment rate has ticked up in many of the so-called "battleground states".

According to the Wall Street Journal, 9 out of 10 pivotal states saw their unemployment rates increase in July. That includes Iowa, Florida, Michigan, Nevada, New Hampshire, Pennsylvania, Virginia and, somewhat less so, Colorado and North Carolina. Ohio held steady after 11 months of decline. In a cruel twist of statistics, many of the higher jobless rates resulted from an improving labor climate; that is, more workers got into the job pool with rising expectations of finding employment, thus increasing the denominator in the unemployment rate.

Running Mates

Mitt Romney had tried not to frighten
Those whose Medicare worries were heightened,
But picked for his second
A fellow who reckoned
He'd cut it, and put that in writin'.

Republican Presidential candidate Mitt Romney has chosen as his running mate Representative Paul Ryan of Wisconsin, Chairman of the House Budget Committee. While Mr. Romney's core beliefs can sometimes seem hard to pin down, Mr. Ryan has captured the attention of the political world with a deficit-reduction proposal that would do away with Medicare in its current form, something heretofore considered the "third rail" of American politics. In the Ryan proposal, Medicare would become a state-administered voucher program. In bringing Rep. Ryan into his campaign, Mr. Romney has given new energy to both Republicans and Democrats, each of whom now see a starker choice in November.

Flat As All That

"The median wage compensation,"
Said Krugman, "Has lain in stagnation."
For those who mistrusted,
His charts are adjusted
For medical plans and vacation.

Paul Krugman takes umbrage at those who doubt his assertion that US wages have stagnated since the 1970's (see chart). Yes, Dr. Krugman has thought this through, and the stagnation even takes the cost of health benefits into account, as detailed in this analysis from the Economic Policy Institute. Alarmingly, during the generation-and-a-half in which wages have barely risen, household debt has skyrocketed from 45% of GDP to nearly 100%, culminating in the mortgage meltdown. (Recovery alert: it has since moderated to about 85% of GDP.) The bottom line politically is that this plays into the Presidential choice in November. Mitt Romney has profited greatly from some of the policies and developments that led to the middle class stagnation, and defends them robustly on the campaign trail. Barack Obama, to be fair, does not represent the dramatic reversal of such policies that either he or his critics would have you believe, but he at least acknowledges the problem and proposes some ameliorative steps.

The Long Goodbye

Of his tenure at Bain said Mitt Romney,
The presumptive Republican nom'nee:
"I was much too engrossed
To give up my post
While Olympian tasks were upon me."

In the American political world right now, the one question that obsesses the Presidential campaigns is: when did Mitt Romney leave Bain Capital, the private equity firm of which he was founder, sole owner and CEO? The answer appears not to be as simple as either Mr. Romney's campaign or that of President Barack Obama would have you believe. That is to say, Mr. Romney did not execute a clean break from his firm before it was involved in politically inconvenient outsourcing transactions, though he was clearly preoccupied with the turnaround of the Salt Lake City Winter Olympics from Febuary 1999 onwards. While the management of the firm was certainly left to his colleagues during the 3-year long winter of discontent, it remains an awkward task to disavow the actions of a firm of which one was the officially registered chief executive.

Stimulus at the Pump

A fall in the fuel price enhances
The state of the nation's finances,
And the drag it removes
Most likely improves
The incumbent's electoral chances.

Most Americans have likely noticed a fall in the price of gasoline over the last month. The US Energy Information Administration reports that the price at the pump now averages $3.79 a gallon, down 3.8% from the 2012 peak of $3.94 on April 2. Some of the causes of this happy development include: softer demand due to the weaker economy, a drop-off in perceived tensions with Iran, additional refinery capacity and improvement in crude oil distribution logistics. As the incumbent's political fortunes seem to rise and fall inversely with the price of oil, one may now expect joy and consternation respectively in the Obama and Romney camps. Though, aside from the conduct of Iranian relations, the White House has little impact on short-term petroleum price movements, they may nevertheless reap some political benefit as the price of gasoline backs away from the feared $4-a-gallon threshold.

Thanks, Mitt - from Ohio Art

One's product becoming a meme
May be every brand manager's dream;
To shake up and then
Start over again,
Well-etched in a rank of esteem.

They're toasting the Mitt Romney Presidential campaign in Bryan, Ohio tonight. The Ohio Art Company, makers of the classic Etch A Sketch toy, found their product in an unaccustomed spotlight due to a gaffe by a Romney campaign manager. Adviser Eric Fehrnstrom told CNN that the Romney team was unconcerned with presenting his recent, hard-right positions to moderate voters in the fall general election: “Everything changes. It’s like Etch A Sketch,” he said. “You can shake it up and we start all over again.” The family-run toy company showed gleeful appreciation to be "DRAWING attention with political candidates...and SHAKING UP the national debate." This development immediately opened up a new market segment for the familiar erasable screen: the Gingrich and Santorum campaigns bought up Etch A Sketch devices to use as props against the Republican front-runner. Mr. Fehrnstrom may have received flowers from rivals to whom he gave a new catch phrase, now that "flip-flop" no longer sounded sketchy enough.

A Gulf in Understanding

Said a man in the Strait of Hormuz:
"The price of the oil we use
More quickly reacts
To the threat of attacks
Than the efforts of drill platform crews."

Upon his return from a relatively unplugged vacation in the hills of eastern Quebec, Dr. Goose was struck by the gulf in perception between some US Republican politicians, who attribute recently higher oil and gasoline prices to the policies of President Obama regarding pipelines and offshore drilling, and petroleum analysts, who tend to cite disruptions in the existing supply in such places as the Persian Gulf. A reasonable interpretation would be that the President's actions regarding oil exploration are of little short-term impact, but his actions regarding global security and stability are critical.

It's The Improving Economy, Stupid

For the typical President wannabe,
The election's about the economy;
So what's there to do
For the wannabe who
Is afraid how much better it's gonna be?

This is the dilemma faced by US presidential contender and former Massachusetts governor Mitt Romney. Having put some distance between himself and Newt Gingrich, the nearest Republican contender, Mr. Romney has now pivoted to the general election, in which his key issue is President Obama's "failed stewardship of the economy", particularly where "job creation" is concerned. Only, what if the economy (and particularly the private sector) begins creating actual jobs? The latest BLS data show that this has now happened, and Mr. Romney's response is that job creation occurred "in spite of the President's policies." This may be the best he could do under the circumstances, but it seems a dangerous road to go down. After all, if jobs can grow in spite of the President's policies, the voters may ask, what do we need you for?

The Real Super Bowl XLVI

Said a Patriot, flanked by his lady:
"Though my Giant opponent is shady,
And I may lack for planning
Or adequate Manning,
I've a trophy wife, just like Tom Brady."

Days before the kickoff of Super Bowl XLVI, US Presidential contender Newt Gingrich tried to rally his supporters for the next 46 primaries in the race for the Republican nomination. Though out-organized and outspent by the frontrunner Mitt Romney, Mr. Gingrich hopes that his persuasive powers will win the day. On the evidence of another commanding Romney win in this weekend's Nevada primary, however, money and organization appear likely to carry the election in the next XLV contests.
As for today's Super Bowl XLVI: Go Giants!

Newt's Non-Concession

Said Gingrich: "It's not contradictory,
In defeat, to forego valedictory;
One may not give up now,
Having taken a vow
To have and to hold out for victory."

Mitt Romney won commandingly in the Florida Presidential primary Tuesday night, capturing 46% of the vote and all of the state's 50 delegates.  However, you wouldn't know it from second-place finisher Newt Gingrich, who, with 32% of the votes and no delegates, gave what sounded a lot like a strident victory speech.  In the glow of his primary night defeat, Gingrich pledged to supporters that, upon his inauguration, he would repeal health care reform, Dodd-Frank financial reform and the Sarbanes-Oxley corporate governance reform, as well as sign a host of executive orders including a pledge to end "antireligious bias." Thankfully, he saved lunar colonization for another day.

Overheard in the Gingrich Campaign

"When desp'rate for polling improvement,
Out the window the positive groove went,
And Republican hacks
Were armed with the facts
From attacks by the Occupy Movement."

Observers from across the US political spectrum have marveled at the rhetorical turn taken in the Republican Presidential primaries. Opponents of front-runner Mitt Romney, notably former Speaker of the House Newt Gingrich and Texas Governor Rick Perry, are decrying Mr. Romney's erstwhile management of the private equity firm Bain Capital as "more ruthless than Wall Street" (in Mr. Gingrich's words) and "vulture capitalism" (in Mr. Perry's). Prominent Republicans, even those not affiliated with Mr. Romney's campaign, have voiced alarm at the seeming attack on free-market capitalism coming from within the GOP. The conservative Club for Growth think tank took Mr. Gingrich to task for his "downright Obamaesque... economically ignorant class warfare rhetoric."

President Obama's campaign of course enjoyed having its arguments advanced by the opposition before the general campaign even begins. "I guess the only downside is that Mitt Romney might not be the nominee," said Obama strategist David Axelrod. For its part, the PE industry's "Private Equity Growth Capital Council" is set to push back with a big PR and lobbying campaign. Finally, the Occupy Movement is left to ask: does this Republican "99%" rhetoric reflect the strength of our ideas, or only the political weakness of certain desperate Presidential candidates?