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Why Mitt Romney will not be the next President

~ John Lally ~ 1 Comment

There appear to be only two things that Republicans agree upon: 1) They desperately want a candidate who will beat President Obama in the 2012 election; 2) They really do not want that person to be Mitt Romney. The former Governor of Massachusetts has been stagnant in the polls for months now – generally obtaining support of around 22-25%. Meanwhile, there has been a handful of front-runners, who have been pushed forward by the GOP as their preferred candidate, only for their campaigns to falter under heightened scrutiny.

Why does nobody like you, Mitt?

Back in August, Michele Bachmann – who has always been popular with the Tea Party – won the Iowa Straw Poll and was considered the leading contender for the Republican nominee, ahead of second placed Romney. When Rick Perry entered the race in September, Bachmann’s support dropped and went towards the Governor of Texas. Perry’s woeful performances in the first two debates he participated in, resulted in his polling numbers declining sharply, a trend exacerbated by his bizarre speech in New Hampshire last week. However, voters did not switch to Mitt Romney from Perry, instead their allegiance went to Herman Cain – a businessman, motivational speaker, and a man many thought was just on a promotional book tour. I honestly believe that Cain himself did not expect to be a serious contender, seeing his campaign as an excellent opportunity to increase his profile – perhaps to land himself a position on Fox News (hey, it worked for Sarah Palin, Rick Santorum, Mike Hucakabee, Michele Bachmann – oops, spoiler alert, that last one does not happen until June of next year). While the settled sexual harassment cases were unearthed by someone outside of his campaign, Cain himself has been doing his best to jeopardise his chances, before primary season has even kicked off. How else could you explain this ad, (which made me check if he was getting big fundraising endorsements from tobacco companies – he isn’t)? Or his dismissing a comment he had made about an electrified fence on the border with Mexico as a joke, only to repeat the “joke” in the same press conference. On foreign policy, Cain has cited his concern about China attempting to develop nuclear capabilities (which they did in 1964), and has said that he does not know the President of Uzbeki-beki-beki-stan-stan*, dismissing a need to be able to name the leader of, what he considers, irrelevant states around the world. Also, Herman Cain has proposed a 9-9-9 tax plan – which I examined here – a policy that has given him a soundbite and thus increased recognition, but something he has not been able to explain in detail when questioned about it – showing there is no substance behind the headline grabbing title.

*Side note on this – the question asked to Cain that provoked that response was about how he would react when the media asked him a “gotcha” question like, “who is the President of Uzbekistan”. This was alluding to the 2000 Presidential election campaign then President George W. Bush could not name the leader of Pakistan, managing only that he was “General” (Musharaff). Knowing the President of Uzbekistan is a lot different to being able to name the leader of Pakistan – one of them has nuclear weapons. There are only 8 countries in the world with a declared nuclear arsenal, is it too much to expect someone running for President to know all of their leaders? Here’s a cheat sheet for the GOP Candidates: USA – President Obama (you knew that one, right?); Russia – President Medvedev (will be Putin again next year); United Kingdom – Prime Minister Cameron (Monarch, Queen Elizabeth II); France – President Sarkozy; China – President Hu; India – President Patil; Pakistan – President Zardari; North Korea – Supreme Leader Kim Jong-Il (but you knew that from Team America).

The Republicans have even tried to push forward people who have had no intention of running, from New Jersey Governor Chris Christie, to Son of President 41 and Brother of 43, Jeb Bush – hoping to support anyone who is not Mitt Romney. Yet, as all comers have come and gone, (Cain has not dropped out of the lead yet, but it seems to be only a matter of time), the former Governor of Massachusetts can still not gain any ground in the polls. The reason for this range from: Romney not being far enough to the right for the Tea Party caucus (as I noted during my evening with Fox News, Laura Ingram took much pleasure in describing Romney as a non-conservative – a view shared by many other right-wing commentators); to the constant changing of his position depending on who he is talking to. He has been for the 99 percenters and against the Occupy Wall Street movement; his healthcare plan in Massachusetts was great for the state, and worked really well, but would be terrible for the country; he was with the Governor of Ohio on his union killing proposition, but would not take a position on that very same issue.

It may seem inevitable that the Republicans will default to Mitt Romney as their best hope of making Barack Obama a one-term-President – but I do not see that happening – neither him getting the nomination, nor winning the general election if he were to be the GOP candidate. On the former point, consider this poll – conducted exactly four years ago – in the 2008 Presidential races. For the Republicans, the leaders are Rudy Giuliani (28%) and Fred Thompson (21%) – the eventual nominee, John McCain, was third (15%) and the last man standing against him, Mike Huckabee, was down in fifth (10%). Hillary Clinton was the clear front-runner in the Democrats’ race – leading Obama by a margin of 43% to 24% – this shows a lot can change between now and the first Primary in Iowa on January 3rd, 2012. The format in Iowa is that of a caucus, rather than a regular election, which tends to result in people choosing a candidate they can speak passionately about. Mitt Romney does not elicit that type of support, even among those who vote for him. Should Rick Perry, Michele Bachman, or Ron Paul – a Libertarian who has fervent support among young Republican voters – win the first contest of the Primary season, momentum could quickly shift in their direction, giving Republicans the reason they are looking for not to nominate Romney.

As for the general election, the New York Times this week had a piece suggesting that Mitt Romney had an 83% chance of winning the vote against President Obama next year – part of the reason why the Republicans may start to embrace him as their main chance of getting back the White House in 2013. I do not agree with this projection – while President Obama has disappointed many of his own supporters by failing to deliver on many of his campaign promises (Guantanamo Bay is still operational; the Bush Tax cuts were extended; healthcare was watered down; there has been no real change to the way Washington operates) – it is also acknowledged that he has been working in very difficult circumstances. He inherited an economy worse than any since the 1930s and has had to try to overcome stubborn opposition from the Republicans in Congress, particularly since the mid-term elections in 2010 (prior to this, the threat of filibustering in the Senate resulted in the Democrats backing down on every issue, including healthcare reform). But if there is one thing that President Obama knows how to do well, it is campaign. His fantastic speech making, use of social media to aggregate support, and his ability to energise the Democratic base to get out the vote, should help him overcome his current low approval ratings. Will it be enough to win in 2012?

To become President, a candidate needs to obtain 270 votes (out of 538) in the Electoral College – in 2008, Obama got 365. A realignment of the House of Representatives, carried out following the census to reflect changes in state populations, means that if he were to win the exact same states in 2012, the President would get a total of 359 ECVs (Electoral College Votes). The following states are unlikely to be in play in 2012, as the Democrats had a large margin of victory in 2008, that is unlikely to be overturned: (ECVs in brackets) Hawaii (4); Washington (12); Oregon (7); California (55); Nevada (6); New Mexico (5); Minnesota (10); Wisconsin (10); Illinois (20); Michigan (16); DC (3); Maryland (10); Delaware (3); Pennsylvania (20); New Jersey (14); New York (29); Connecticut (7); Rhode Island (4); Massachusetts (11); Vermont (3); New Hampshire (4); Maine (4) – a total of 257 ECVs from 21 states and the District of Columbia. Barring any of these turning red in 2012, that means that the Republican candidate will need to pick up the following states that McCain lost in 2008: (President Obama’s winning margin in brackets) Indiana (1%); Ohio (4%); Virginia (6%); North Carolina (1%); Florida (2%); and one of Iowa (9%) and Colorado (8%). As well as needing to almost sweep in those swing states, the GOP need to hold on to Montana (which they won by 3% in 2008) and Missouri (1%) in order to win the next election.

While Mitt Romney would be the Republican candidate most likely to garner votes with independents in those swing states, he is not a nominee who will encourage the hard-line Republicans to get out and vote. Should he have a good campaign, I think President Obama will end up being a two-term President – hopefully with a Democratic Congress for the next four years.

Political Update: Herman Cain’s 999 Plan and Occupying Wall Street

~ John Lally ~ 3 Comments
Herman Cain with his political resume

Even a causal observer of the current GOP Presidential Candidate race will not have been able to miss Herman Cain talking about his “Nine Nine Nine Plan”.  Under this policy, would-be President Cain (he was not a serious candidate a few weeks ago, but everyone still hates Mitt Romney, and Rick Perry has been going hunting at a place called…wait what? It’s named what? Im not saying that…but that must hurt his chances) would scrap the current tax code with all it’s deductions (save for charitable donations) and progressive rates, and replace it with three flat levies:

9% Corporate Income Tax (Currently 15%-35% depending on income levels)

9% National Sales Tax (Currently 0%)

9% Personal Income Tax – (Current Rates increase the more you earn, 28% on everything of $83k, 33% on income over $174k and 38% on amounts earned over $379,150)

So taking the last part first, a change from gradually increasing tax rates to a flat rate of 9%, sounds like a tax cut – but only if you are in the top bracket of earners.  This is a plan for the rich and for corporations – who would not only see their tax rates drop, but Herman Cain has a proviso in his plan that there would be no taxes on repatriated profits nor on dividends, providing plenty of ways for the Exxon Mobiles and GEs of the country to continue paying no corporate income taxes, as has been the case in recent years.  More numbers to prove this point:

*Numbers approximations from IRS calculator – no deductions/dependents considered, just raw numbers

Person A Earns $500,000 salary in NYC

Current Anticipated Federal Income Tax – $148,989

Under Cain’s 999 Plan – $45,000

Saving of $103,989 – meaning Person A will have plenty set aside to pay the extra 9% National Sales Tax on essentials – such as champagne, yachts and employing 1 (one) gardener

Person B Earns Minimum wage in NYC ($7.25 an hour, 40 hours a week, 52 weeks a year – $15,080 per year)

Current Anticipated Federal Income Tax – $558

Under Cain’s 999 Plan – $1357.20

Meaning Person B will have $799.20 less per year, plus will have to then pay 9% tax on those luxury items like food, shelter, water, etc. Luckily, there is a gardener position opening up in NYC and a second job may help offset that difference – careful with those shears though, Person B – you definitely cannot afford healthcare.

A widely quoted statistic by the Republicans at the moment is that 50% of Americans pay no federal income tax (we’ll ignore the fact that they pay payroll taxes, social security, medicare, etc), and the view from the Right is that everyone should be paying something rather than increasing the rates on the rich job creators in the top two brackets.  During the debt ceiling debate, part of President Obama’s plan was to raise the marginal rates on these top earners in order to generate $700bn more in revenue over the next ten years – the GOP hit back claiming that this money should be taken from the bottom 50% of the country who do not pay any federal income taxes.  Well, according to the most reliable news source available in the US, The Daily Show, that half of the population of the United States controls a massive 2.5% of the wealth.  To put it another way, their total assets are worth $1.45trillion, meaning that in order to generate the same amount of additional revenue, the Federal Government would need to take away half of everything the bottom 50% have.  Apparently this is a fairer way of spreading the burden than increasing the highest rate of taxation back to 38% – or the same number it was prior to the Bush tax cuts came into effect in 2001.

Adding to this, the Cain administration would add a 9% National Sales Tax – meaning the poorest Americans would be hit with an additional tax on everything they buy with their net income – this is not a levy that is coming from their gross income, but something that increases the cost of all expenditures on the money they have available after the Federal Income Tax has been deducted from their wages.  Remember also, this National Sales Tax would not be instead of State Sales taxes, President Cain would have no control over the rights of states to decide their own rates and thus this would be additional on top of the 8.875% in New York City (where you have City tax as well), 7% in Mississipi, 0% in Delaware…

NineNineNine may have a catchy name for a tax plan, but it perhaps should have been used as a sales device in one of Herman Cain’s former jobs, CEO of Godfather’s Pizza. He could have offered a 9″ Pizza, with 9 pieces of Pepperoni guaranteed, for $9.  It’s just not a fair plan, and it will decrease revenues massively – because taking 9% more from 50% of the population who have only 2.5 % of the wealth, does not balance taking 26% less from the richest 1%, who own 42% of the wealth.  It does not make mathematical sense, and it does not make sense philosophically.  John Rawls, in “A Theory of Justice”, used a device called the Original Position.  The idea is, that the fairest way to determine how society should be constructed would be to have a person in this Original Position – deciding how everything should be setup without knowing what their position within the society would be.  If you were to be in such a place, would you really design a system where you had a very small chance of controlling a significant amount of the wealth, yet everyone would be required to pay the same federal income tax rates?  If everybody started from a level playing field, then there would be more of an argument for this, but there is no doubt that the United States is designed to benefit the richest 1% and they maintain that control by lobbying the Government and through campaign contributions – indeed, in the last election President Obama garnered more donations from banks than his opponent, Senator McCain.  Wall Street not only knows which of their own products are toxic and to bet against (mentioning Goldmans Sachs no names specifically), they also know which candidate is most likely to win and therefore is in most need of their convincing donations.

This is why the Occupy Wall Street campaign is happening, with people taking up residency on the streets of Lower Manhattan.  They want to send a message that this divide between the top 1% and the rest of the population is not fair.  Fox News and the right-wing blogosphere has gone out of its way to paint these people as incoherent anarchists who want to destroy capitalism and move towards European Socialism. Glenn Beck likens them to the Brown Shirts of the Nazi Party (to be fair, he does have Nazi Tourettes and thinks anything he disagrees with is “exactly what happened in 1930s Germany”).  Or they have been described as hippies – the great unwashed – and have been charged with all of the stereotypes that come with that label.  Maybe it is not the best way to go about initiating change, but what they are asking for is a return to the tax rates of the 1990s, under which the US economy was strong, and proper regulations on Wall Street banks – as opposed to the impotent Dodd-Frank bill, which has implemented very few regulations and has just been used by financial firms as a mechanism with which they can compete for new business.  Good luck to the Occupy Wall Street protestors, they are exercising their Constitutionally protected right to petition the Government – when did all those who support the Tea Party and hold the Constitution with such reverence, forget the First Amendment?

Or are they just too busy misunderstanding the Second Amendment? (That, though, is an argument for another day)