Never before has an election generated in me such fascination about the process and apathy about the result as this year’s US presidential election. A- country which shows all the signs of hurtling into an unceremonious Soviet-style collapse is holding an election in which imminent fiscal and monetary Armageddon play second fiddle to the financial future of an anthropomorphic bird, an accusation relating to women and stationary items, whether or not a thirty year old student in an elite law school should be entitled to free prophylactics from her Catholic university and whether a president who orders extra-judicial assassinations of American citizens and fights wars without congressional authorisation has “apologised for America“. A person who entered into a coma six months ago and woke up today would not believe the consummate triviality which has characterised the 2012 election. However, the links provided will demonstrate that this has not been a bad dream. An election fought in extraordinary circumstances has been characterised by what can only be described as a caricature of politics as usual.
The bright spots have been few and far between. Romney has managed to avoid stooping to the lowest depths of neocon idiocy on foreign policy. Cynicism about Obama (even among his supporters) has grown, such that it now seems inconceivable that he will ever re-assume the aura of invincibility he once appeared to enjoy (albeit fleetingly) back in 2009. The Ron Paul movement, which was virtually ignored by the Republican establishment in 2008 now has sufficient purchase within the Republican Party that Senator Rand Paul received a speaking slot at Romney’s convention and the idea of returning to the gold standard has been revived. The idea that such thin gruel could provide noticeable satisfaction underlines the depressing nature of the contest.
Of the candidates on offer, there can be no doubt who represents the best choice when it comes to principled libertarian philosophy. Former New Mexico Governor Gary Johnson (formerly a Republican and now the Libertarian Party candidate for president) has promised to:
- abolish the Federal Reserve;
- close the US Federal deficit without raising taxes;
- end the war in Afghanistan;
- end the war on drugs; and
- not start a new war in Iran.
There is only one problem. Gary Johnson is not going to win. Yet another depressing reality which has not gone away is that the GOP-Democrat duopoly is alive and well. Since relatively few Johnson supporters are likely to contemplate supporting Obama, the likelihood is that a vote for Johnson will be a vote to tip the scales for him against Romney.
So who represents the “least worst” option for the next four years: Obama or Romney?
The first variable is the economy:
- The US economy has averaged recessions every 4-6 years since 1945. Given that the last recession officially ended in 2009, it is statistically highly likely that the next recession will occur in the next presidential term. On the evidence of the last two recessions in 2002/3 and 2008/9, such a recession would be likely to be devastating in effect. On the assumption that there will be no material difference between how Romney or Obama would respond to such a recession (triggered perhaps by a crash in the bond markets) and that we would see a George W Bush style orgy of bailouts, “stimulus” and quantitative easing either way, it would be best for Obama to be in charge. The Republicans’ ideological predispositions render it possible that a strong and coherent response might ensue, forming the basis behind a constructive agenda for a 2016 election which the Republicans would be fancied to win. By contrast, Romney might well be able to fall back on the cult-ish discipline upon which George W Bush was able to rely, leaving the way clear for a Democratic victory in 2016, with potentially incalculable consequences.
- On the other hand, it is conceivable that the euro currency crisis could drag on for some years to come, with the combined efforts of Merkel and Draghi not solving the problem (which seems virtually insoluble) but preventing for some significant period of time, the collapse of the euro. In this scenario, the euro would continue to exist on life support, leading international capital to continue with its current policy of seeking refuge in the Dollar, thus keeping Dollar interest rates artificially low and allowing a continued “recovery” to be sustained through the economic heroin of Keynesian borrowing. The long term consequences of such a “recovery” would be an even greater crash. However, such a crash might arrive too late to discredit the suicidal Ponzinomics of Obama. Under such circumstances, the re-election of Obama might lead to a nightmare scenario involving (i) a robust two years of growth under an Obama presidency leading to an impressive Democratic performance in the 2014 mid-terms; (ii) the end of the Tea Party and the capitulation of the demoralised Republican Party to a massively statist Democratic agenda (unions running amok, cap and trade legislation, massive increases in taxes on labour, profits and capital and more government “investment” (i.e. reckless public spending)); (iii) the emboldening of European anti-austerity politicians by stories of Obama’s Roosveltian success and the gradual capitulation of Europe, led by Francois Hollande and perhaps a new Social Democrat government in Berlin to Obama’s preferred solution of European federalisation, continent-wide stimulus and an ECB led orgy of money-printing leading to; (iv) a gargantuan global crash involving fiscal meltdown, hyperinflation and then God knows what.
One is thus faced with a gamble. We don’t know which of the above scenarios will arise, so which one is preferable depends on which arises. Perhaps we should consult an economist (although these days economists seem to only exist in order to make astrology seem like an academic discipline).
On foreign policy, Obama has essentially continued Bush’s warmongering. However, at least lessons have been learned – it would appear by both candidates. Beyond the rhetorical differences, both Obama and Romney want to help the Syrian rebels (meaning the likelihood of a Muslim Brotherhood takeover like in Egypt) but neither want to commit American troops or bombs (thank heavens for small mercies). Both support a timetable for withdrawal from Afghanistan. Both support the Patriot Act, Guantanamo and sanctions against Iran. Beyond the rhetorical differences between the two (which moderately favour Obama), it is by no means clear whether either would attack Iran. Both leave the option on the table (regrettable) but neither purports to want war (progress). Foreign policy thus leaves little to separate the two candidates.
On monetary policy, Obama has continued with Bush’s policy of sub-prime interest rates from the Fed, quantitative easing and Dollar debasement. He has even kept the egregiously awful Ben Bernanke at the helm of the Fed. It is disheartening that after a Republican primary season in which Ron Paul, as usual, schooled the economists in what is supposed to be their area of professional expertise, Rick Perry disparaged Bernanke’s inflationism as “almost treasonous” and even the oleagenously creepy Newt Gingrich called for a debate on returning to the gold standard, Romney played no constructive part in the debate. Indeed, most discouragingly, Romney’s chief economic advisers are R. Glenn Hubbard (a Bush-era retread) and N. Gregory Mankiw (also a Bush adviser and an avowed Keynesian to boot). Monetary policy thus moderately favours Obama on the principle that if your enemy’s policy is going to be implemented anyway, it might as well be implemented by your enemy – at least that way, he might get the blame when it all goes wrong.
Regulatory policy is the only area where there is a clear and straightforward difference between the two candidates. The difference between the discretionary operations of regulatory agencies such as the EPA and the NLRB under Romney and Obama is likely to be night-and-day. Romney will probably end Obama’s war on hydrocarbons (e.g. the Keystone Pipeline) and it would be virtually inconceivable that Romney Labour Regulators would repeat Lafe Solomon’s disgraceful persecution of Boeing for building a plant in non-union South Carolina. That said, I cannot join in the optimism of groups like Free Market America, who think that such policies will act as a fundamental economic game changer. The big regulations damaging the US economy are likely to remain, regardless of who wins. The Wagner Act, the Clayton Act, the Sherman Act and Sarbanes Oxley will, I fear, stay in force and continue to wreak havoc on the world economy.
All in all, I think that it is naive to believe that the election will make no difference. I think that there is a scope for very different outcomes, depending on which candidate wins. The problem is that factors outside of either candidate’s control render it completely unclear which candidate’s victory represents the worse outcome – and sadly, once we know, it will be too late.
For this reason, I fear that the choice becomes much more speculative and much less scientific. Romney is an unknown quantity. Obama is not. Romney has shown during this campaign that he does not understand capitalism or free enterprise. However, he has not shown any intrinsic hostility to them. Obama has also shown in the last four years that he does not understand capitalism or free enterprise either. However, unlike Romney the businessman, Obama the community organiser has shown a vicious hostility to capitalism and free enterprise at almost every available opportunity. Romney’s pro-forma invocations to American exceptionalism and denunciations of European social democracy inspire little confidence. However, his heart may be in the right place. The cold glint of implacable hatred in Obama’s eyes and the supercilious unctuousness of his tone of voice when he talks about “millionaires and billionaires” and businessmen “not building” their businesses suggest the possibility of a deeper and more sinister hatred of free enterprise than his mere words communicate. In the absence of a crisis, neither Romney nor Obama will do anything useful. However, with his back against the wall, Romney might do the right thing. Obama will do the wrong thing with relish, with circumstances which could be cataclysmic for the world.
With the full understanding that calling Romney a conservative (never mind a libertarian) is like pouring boiling water into a bowl and calling it soup, I must regretfully cast my lot in with him – in the full knowledge that hindsight may make my decision look like the very definition of folly.