Published November 02, 2012
The Greeks, the Incas, the Hittites – all created myths to explain life’s mysteries. They have nothing on the Obama campaign.
Remember how the Supreme Court decision allowing corporate political spending was going to undermine Democrats, uh, that is, democracy? How Republican super PACs would give Governor Romney an insurmountable spending advantage? As it turns out, the Obama campaign has raised more money than the GOP candidate – almost $1 billion dollars – even while as recently as August Obama was e-mailing supporters, warning that he was going to be outspent. Obama has run 160,000 campaign ads so far, compared to 140,000 for Romney.
Another myth central to Obama’s campaign is that Mitt Romney wants to go back to the “policies that got us into trouble in the first place.”
What are those injurious Republican policies?
Presumably the president refers to the deregulation of financial institutions that liberals blame for the recession. But, it was Bill Clinton who repealed Glass-Steagall. The Gramm-Leach-Bliley bill, which undid that long-standing law, passed the Senate 90-8, with Vice President Biden among the many Democrats supporting the measure. By contrast, George Bush was a regulation nut. It was during his administration that the country adopted the oppressive Sarbanes-Oxley legislation.
In any event, the financial crisis did not stem from deregulation. Instead, it was caused by the government encouraging too much money to slosh into real estate and into subprime mortgages backed by Fannie and Freddie, on the misguided notion that home ownership created upward mobility.
The excess investment into property blew prices sky-high and encouraged speculation. The ensuing bubble was fed by the emergence of securitization, which made available unprecedented amounts of money. Many rungs led up this rickety ladder – poor credit analysis, incompetent ratings agencies, undisciplined mortgage brokers – but allowing banks and securities firms to invade each others’ turf was not among them.
Another Obama myth is that the president “saved” GM while Romney wanted to let the auto companies go bankrupt.
People forget that GM did go bankrupt, and that taxpayers are still on the hook for $42 billion in monies funneled to GM and its financial arm Ally Capital – more than half the TARP funds that are still outstanding.
Obama upended traditional (and legal) bankruptcy proceedings in order to rig the outcome heavily in favor of the UAW – payback for the $400 million in contributions from organized labor that fueled his 2008 campaign.
For the UAW, each one percent ownership interest in GM cost $629 million; taxpayers paid $834 million and secured bondholders, the top of the credit chain, paid $2.7 billion for one percent of the company.
Romney’s push was for a legal and legitimate sorting out of the company’s debts, a restructuring that would ensure the company’s competitiveness going forward, more harmonious labor relations and investment in energy-saving and innovative technology. Does that sound like a prescription for killing the autos?
President Obama’s newest campaign ad is stuffed with myths, including how he fostered “American-made energy”. Even fourth-graders know that Obama’s every impulse has been to squash the use of fossil fuels. He stifled investment in oil and gas by slowing lease sales on federal lands, proposed cap and trade regulations (which thankfully went nowhere) that would crimp hydrocarbon development, pushed to eliminate tax breaks for oil and gas producers that are meant to stimulate drilling, and adopted regulations that virtually prohibit construction of new coal-fired power plants. He is convinced that high-cost green energy is the future and that fossil fuels are relics of an unhealthy and permissive past. For a campaign supposedly looking Forward!, energy policy has been remarkably embedded in past (and discredited notions) of how we are running out of oil.
Mr. Obama also touts his success in promoting exports. Sales of goods and services overseas have indeed increased, as reliably as the temperature climbs on a sunny day. Global growth is being driven by rising consumption in emerging economies like China and Brazil; we, as the world’s second largest exporter, have benefited.
It is interesting to note, however, that while exports increased 72% during George W. Bush’s eight years in office, despite a recession early in his term that drove exports slightly lower, the amount of goods and services we ship outside our boundaries has advanced only 20% in the four years Mr. Obama has been president. (We assume that export growth in the final months of this year will hum along at 5%, as it did earlier in 2012; they most recently turned down.) Mr. Obama’s tenure began with a slump, to be sure. But he has not moved the needle here.
The Obama campaign teeters on many myths and distractions. Unhappily, there is no excuse for Mr. Obama’s failure to lead this country, his inability to work across the aisle, his refusal to tackle our fiscal challenges or his disdain for private enterprise. There are no heroes here.