Archive for category Fiscal Cliff

Pragmatists vs. Jihadists in the GOP

No new taxes!

No new taxes!

The Republican party is congratulating itself for following through with the sequester and avoiding any new taxes — this time in the form of closing tax loopholes which most Republicans once favored — but the continuing crisis risks putting the country into a double dip recession while the American system appears dysfunctional.

The GOP wants to blame Obama for “not leading.”   That’s false.  We have a divided system of government and the President has never been able to lead Congress.   The President can and has over the decades negotiated with Congress, made compromises, and cut deals, but divided government means checks and balances.   When it works, extremes are avoided and pragmatic compromise is reached.   When it fails, gridlock ensues.

So what next?

The Republicans are internally divided, as everyone knows.    But that’s nothing new, in a two party system there will be vast divisions as a matter of course.     Usually parties gravitate to the center, where most voters are.   This isn’t happening with the Republicans, at least not yet.

The pragmatists want to move towards the center and relegate the “tea party” wing of the party to the sidelines.  They think the core problem for the GOP is that the far right has had too much a say over GOP policies and made compromise seem a bad word.    Symbolic is the way the far right torpedoed the effort by President Bush and John McCain to get comprehensive immigration reform passed in 2007.    If they had passed that, voting patterns today might be much more friendly to the Republicans.

The most insipid slogan from the far right is that “compromise is a violation of principle.”   To pragmatists, strict adherence to “principle” is mindless; context matters and compromise is a virtue.  They hope to attract candidates that are moderate, reasonable, likable and able to get things done.

The jihadists don’t want to compromise.   Bring on the sequester!   Hell, many wanted the US to default on our debt and would be happy to shut down the government.   Ted Cruz of Texas acts like a little McCarthy calling people “communist” (note to tea party:  calling people communist ceased to mean anything after the end of the Cold War).    Believing they represent what America “should be” they are waging a holy war to save the country.   They are convinced global warming is a fraud – and due to cherry picking of dubious claims some actually believe that evidence is on their side!  Some on this wing of the GOP wants to simply burn everything.   They’re holy warriors!

Though it appears that while the jihadists hold the House Republican caucus hostage for a moment, the pragmatists are gaining the upper hand, especially after the unexpected defeats of 2012.   Democrats gained in the Senate, kept the Presidency despite economic difficulties, and though the GOP held the house, Democrats got more votes overall.   But the pragmatists need to change too – they need to learn how to connect with all voters.

Blaming everyone but themselves, the Romneys show what's wrong with the GOP

Blaming everyone but themselves, the Romneys show what’s wrong with the GOP

The core problem of the Republican party was on display in the recent interview by Mitt and Ann Romney with Fox News.   While most of the time Romney was gracious and reasonable, when they talked about their defeat it was clear they don’t get it.   Mitt claimed that Obama appealed to minorities because of Obamacare — get it, that “minorities want free stuff, the government is bribing them” line.   That disdain and disrespect for a large chunk of Americans — the core of the 47% quote — is a mindset that destroys the GOP brand.    They want to think they are virtuous hard working self-reliant Americans while those Democrats and minorities are lazy moochers who want a handout.   That is not only wrong, it’s so idiotic that it borders on the delusional.

Of course, Ann wasn’t much better, blaming the media, acting as if it were self-evident that her husband was right for the job.  If anything their interview showed why the country dodged a bullet by not electing him – and how the GOP blame game prevents them from confronting real problems within their message and policy preferences.   And Romney is one of the pragmatists!

Obama must help the Republicans save themselves

Obama must help the Republicans save themselves

In an ideal world the Democrats would be coming to the debate demanding tax increases while trying to defend so-called entitlements and aid to those already suffering the most.    The Republicans would counter demanding spending cuts and deep entitlement reform.

After a process of negotiation the result would be a compromise.   Entitlement reform and spending cuts that piss off the left wing of the Democratic party alongside tax increases that piss off the right wing of the Republican party.   The idealists would be trumped by the pragmatists on both sides, that’s how our system is supposed to work.

But that won’t happen.   The jihadists have hijacked the Republican party and they won’t compromise.  It’s all spending cuts and deep entitlement reform or nothing.   And of course, with a demand like that they’ll get nothing.   The deficit will grow faster than if they compromised, they’re shooting themselves in the foot.

So President Obama needs to make them an offer they can’t refuse.   He needs to offer them real cuts through a restructuring of programs that brings about significant savings, in exchange for a mix of tax reform to increase revenue and investments to have our economy competitive for the new century.

The President should be specific.   He should expect but not fear criticism from his own left flank.   He should tell the American people “these are the cuts and reforms the Republicans want, and we’re willing to compromise and give them that, but they won’t take yes for an answer because they’re protecting tax breaks for big corporations and wealthy fat cats.  They care more about protecting the rich than cutting the deficit and reforming wasteful programs.”

At that point, Republican pragmatists will realize that this is the best they can possibly achieve and will be good for the country.   They will be able to undermine the jihadists.    Without a compromise,  it becomes the big campaign issue of 2014.   To tea partiers thinking 2014 will be another 2010, think again.  The Democrats learned their lesson, they’re already targeting districts for a ground game more like a Presidential year than an off year election.

After all, if the GOP can’t compromise at all, well, all the President has is the bully pulpit and the powers of the executive branch.    Expect him to use both.

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Debt Ceiling or Platinum Option?

debtceiling

Let me be blunt: if the Republicans threaten to not raise the debt ceiling unless the Democrats agree to spending cuts, they are the functional equivalent of terrorists, holding a gun to the head of the economy and demanding the President give in to their demands.

Here’s why: If the US cannot make payments on money it owes, then our credit rating crashes, our bonds become more expensive, the budget would be made much harder to balance and we could dive into another global recession.  You don’t make that a bargaining chip.   The President’s biggest first term mistake was to allow himself to be suckered into bargaining on the debt ceiling, thinking he could get a deal.   He cannot repeat that mistake.

Note: Congress has already voted to spend this money.   It’s not like the President wants to increase debt and Congress doesn’t.   This is money the Republican House has voted to spend – it’s a debt they’ve approved.  For them to not raise the debt ceiling or to blame the President for the higher debt is objectively wrong.   That’s why for the good of the country the President cannot negotiate around the debt ceiling.   He should work to make it that neither party ever can.

Don’t get me wrong – there should be real talk on deficit and debt reduction.   We need to take a hard look at demographic change and the long term sustainability of so-called “entitlements.”   The Republicans are not all wrong in this discussion.  You just don’t threaten the life of the US economy in order to get your way.

GOP leaders have publicly stated they want to use the debt ceiling as leverage, holding the global economy hostage unless the Democrats give into their demands

GOP leaders have publicly stated they want to use the debt ceiling as leverage, holding the global economy hostage unless the Democrats give into their demands

Last time this came up many people thought that perhaps the President could use the 14th amendment to unilaterally raise the debt ceiling.   Coming just before an election year with the Republicans sure to start impeachment hearings by claiming that would be a misuse of that power, that was an option the President could not risk.   But his legal team should seriously consider it, the political conditions have changed.

There is also the so-called platinum option.   The President does not have the power to print money, only the Federal Reserve can do that.   But there is power given to the Secretary of the Treasury:

The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

Should the Treasury issue a trillion dollar coin like this?

Should the Treasury issue a trillion dollar coin like this?  What if Monty Burns steals it?

You see why laws are so complex – if you don’t word them right you can leave enormous loopholes.   The purpose of this law is to make it possible for the Treasury to issue platinum collector coins.    But what if the Secretary of the Treasury minted a $1 trillion dollar platinum coin and deposited it with the federal reserve?   And what if he threatened to keep doing so until the debt ceiling limit was raised?   That would keep us from reaching the debt ceiling and thus avoid default.

That might risk inflation – minting trillion dollar coins adds greatly to the money supply.  But the Treasury secretary could make clear that those coins would be withdrawn in response to a raising of the debt ceiling.   Better would be to abolish the debt ceiling issue — it’s insane to make it possible for a manufactured crisis to threaten the world economy — and at the same time rewrite the  above law so the loophole is closed.

If Congress votes to spend money, they are voting to borrow enough money to spend what they want.   There should be no secondary ‘debt ceiling’ vote.   The platinum option is probably too absurd to be used, but when the global economy is being held hostage it might be necessary.

The President must address this issue forcefully in his State of the Union speech

The President must address this issue forcefully in his State of the Union speech

The President must make this an issue in the State of the Union address – he must call the Republicans out as recklessly threatening the country by holding the debt ceiling hostage as a way to gain leverage.   He must take control of this issue, and put the Republicans on the defensive.   This should be the first shot in the 2014 campaign – if the Republicans purposefully crash the economy, the public should make them pay.     He shouldn’t call them terrorists (though I think that’s what they’d be doing), but he has to crystallize the issue for the country and show leadership.

At the same time he must offer real negotiations on the budget and show his good faith.  But those two issues must not be linked, it may take longer to reach a budget compromise and that’s OK.    The President wants his legacy to be putting the US on the path to fiscal responsibility, not sky high deficits.  The Republicans know it.   Risking the economy on a phony issue is insane.

As the debt ceiling deadline nears, if the GOP tries to play that game the White House should seriously explore and discuss options like the 14th amendment or the platinum coin.   Given the dynamics in 2011 I think the President was right to go with the sequestration — it actually set the Democrats up for a big win on the fiscal cliff.   But for the sake of the country he can’t allow Congress to hold the US economy hostage in order to try to get their way.  It’s un-American.

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Welcome 2013!

2013

The world did not end on December 21, 2012 and the country averted the so-called fiscal cliff.   But perhaps the end of the Mayan cycle does symbolize change:  the world has been on an unsustainable path and the direction is shifting.

Politically, the US is becoming more progressive.   Ronald Reagan and Barack Obama are both larger than life Presidents, disliked by their opponents but pragmatic.  Each compromised – Republicans forget the types of compromises Reagan made during his term – but focused on shifting the country’s direction.   Reagan succeeded – for thirty years taxes have been going down and the debt has been going up.   The growth in social welfare projects was halted, while social conservatism grew.

Those days are over.  With states rapidly approving gay marriage, drug laws shifting (remember the vindictive nineties when Newt Gingrich was advocating the death penalty for even selling pot?), and the internet creating a more open and tolerant public, the culture wars are over.   The social conservatives lost.  A new generation is emerging less repressed, less convinced by social conventions, more willing to experiment and be open.

Republican infighting grows as the nation shifts from center-right to center-left

Republican infighting grows as the nation shifts from center-right to center-left

With the fiscal cliff deal people accept that tax reform is necessary to bring more revenue and stop living beyond our means.   The only reason the debt’s gone up under Obama is the recession — something he didn’t create.   Recessions radically increase the cost of government programs, decrease tax revenues and require spending to stimulate the economy.   But Obama has signaled structural reform that will turn around the budget mess, even if the results won’t be clear until the economy is growing.

Until recently concern about global warming was losing support in public polls.   That’s turned around.   Things like Sandy, droughts, and historically high temperatures are convincing the public this is an issue.   A generation of children are coming of age who learned environmentalism and science in the schools.  Environmental activism is becoming cool again.

Beyond that the fossil fuel era is ending.   Despite promising finds of natural gas and tar sands, global consumption has been rising fast and new finds will not be enough — though they make the transition easier if we are proactive.   Saudi Arabia is past its peak and likely to become an oil importer by 2030.    Right now the recession has kept oil prices low, but even with the world in the economic doldrums oil is near $100 a barrel.  If growth returns, oil prices will rise dramatically.

Even with oil sands and fracking for natural gas, the fossil fuel era is ending

Even with oil sands and fracking for natural gas, the fossil fuel era is ending

Luckily, led by the EU, the rise of green technology is dramatic.   Still, higher energy costs will force a shift in life styles.  I doubt it will be the collapse predicted by some, but the days of cheap energy are ending.

The biggest shift is in technology.   Social media and the internet started a revolution in the Arab world that will take years to play itself out.   Those who think this is bad – or could have been prevented – are sorely mistaken.   The regimes relying on fear and bureaucratic control are going to find that people are becoming informed and empowered, able to rise up.    This started back in 1989 with the fall of Communism in Europe, but will grow and spread.

Even in Africa, where a genocide in 1994 and numerous wars involving some of the worst atrocities of recent history went unnoticed, a new activism is emerging.   Though Kony 2012 faded, the connections people are making across borders make it likely that over the next few decades the African continent will have a rebirth.  They own many of the scarce resources that the rest of the world needs; corrupt dictators are starting to fall.

Old political notions of sovereignty, national self-interest, and fear based policies are slowly giving way to interdependence, shared interests and hope.   The world is waking up, change is coming.   It will not be easy, there may be decades of instability and uncertainty before we see a better reality.    But a new world is coming.

The biggest barrier to peaceful change are those who cling to old ways of thinking – fear, anger, greed, self-interest at the expense of others, and a ‘them vs. us’ mentality.    The old mentality will not work in the world that’s emerging, and following the path of fear will yield crisis and conflict.    But change is coming, yesterday has past, now let’s all start living for the one that’s going to last.

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The Plan B Fiasco

A dark day for the Speaker

A dark day for the Speaker

The Plan B pill is taken by women the morning after having sexual intercourse in order to avoid getting pregnant.  Unfortunately for the Republicans and John Boehner, their plan B could not prevent the birth of a fiasco, meaning the Republicans are screwed.

After weeks of talks it was clear that there was no way Speaker John Boehner could get his party to support the kind of deal that he and President Obama were building to avoid the so-called fiscal cliff.    The Republican leadership decided they needed a “plan B” to pressure the Democrats to make more concessions.

At first Plan B was simply to pass a higher tax rate on to millionaires, with rates staying the same for everyone else.  Boehner’s argument:  “I’ve now shown I’m willing to accept a tax rate increase.   That’s what the President has wanted from me.   Now let’s see what he’ll give me in exchange.”   If nothing, Boehner reasoned, the GOP would have some cover -rather than being seen as an intransigent party refusing any tax increase on the wealthy, they could say they had moved and the Democrats need to respond in good faith.

Only thing – Boehner had to get Plan B passed.  At first he figured it should be easy.   His party has the majority in the House, and back in 2011 many Democrats had suggested that raising rates on millionaires would be enough – Boehner could throw their own words back at them.   If it could get through the Senate with Democratic help, it would force Obama to veto the bill and make it look like he was blocking progress.  Fearful of that happening, Obama would have to give the Republicans more of what they wanted.

It didn’t work.

Boehner's best option is now Plan C

Boehner’s best option is now Plan C

First, Democrats were pretty united against it.   What was said in 2011 is irrelevant; this is a new political reality.   Given that, Boehner needed to have Republican unity to get it to at least pass the House.    He failed.   Too many conservatives had taken a career stand against EVER raising taxes, even on millionaires.

Boehner appealed to reason – the lower tax rates will expire on everyone on January 1.   Then the House will be forced to pass a bill lowering taxes on those under $250,000, meaning rates will go up on a lot more people.  “I need this for my negotiations,” Boehner said –  for leverage, it’s not actually going to become law!

Nope.  The hard right, already angry that some of its members had committee assignments plucked away from them for their disloyalty, dug in.   So Boehner added budget cuts to the mix – cuts that meant that any chance that the Democrats could support it withered.   He didn’t care, he was desperate.  He had to pass something in the House.  ANYTHING.

Boehner's fiasco comes a week after Senate Minority Leader Mitch McConnell embarrassed himself by filibustering his own resolution due to a strategic miscalculation

Boehner’s fiasco comes a week after Senate Minority Leader Mitch McConnell embarrassed himself by filibustering his own resolution due to a strategic miscalculation

After a tense meeting on the evening of Thursday December 20, the Republicans managed to impale themselves.   The far right accepted nothing, the Speaker’s leadership was rejected, and the party was split.    Conservatives were gleeful about the separation, believing they had gotten revenge on the Speaker and had stood on principle.    But it’s a Pyrrhic victory.

In the headlines the story is clear:  Boehner’s efforts to compromise even a bit were shot down by extremists in his own party.    Any effort to shift blame to the Democrats or show that the Republicans were negotiating in good faith fell apart. Any deal that gets passed will be a Democratic agreement — the President and Senate Majority leader Harry Reid (D-Nevada) will craft a proposal that can pass the Senate and the House, appealing to at least enough Republicans to get it through.

Moreover, this will likely happen after New Year’s, meaning that the Republicans might lose the President’s offer to raise rates only on those earning $400,000 and higher.

Conservatives say fine – make the Democrats own what is passed.   Make them responsible for tax increases, make them responsible for any cuts that are made.    Rather than governing, which is what legislative bodies are supposed to do, they want to make stands on “principle.”   But principles are always simplified rules of thumb, inapplicable across all contexts.   Sticking to simple principles is for the simple minded – reality is far more complex.

Governance is about compromise and problem solving.    John Boehner understands that; too many in his party do not.

So now what?   The Republicans are in disarray, still fighting over the lessons of 2012, even as a recent CNN poll shows that 53% of Americans consider the GOP too extremist while 57% consider the Democrats mainstream.    They may hope that 2014 is 2010 redux — another off year election — but the mood of the country is much different.

Simply, they are seeing their “conservative revolution” die.    The country is moving slightly center-left, with pragmatism trumping ideology.   The Grover Norquist types are 20th century relics, whose politics are poison today.  The tea party was the last gasp of this movement, reacting in horror to the election of man they couldn’t imagine as President.   But it was an illusion, they won in 2010 because of the economy and the fact the voters thought it would facilitate compromise.  It wasn’t a popular conservative rebellion against Obama.

The tea party anger of 2010 may have been the last gasp of a dying movement

The tea party anger of 2010 may have been the last gasp of a dying movement

2012 may be seen as the election that solidified a move to the left that started in 2006, and was interrupted by the 2010 elections.  If that’s the case, the Republican party is going to have to go through a kind of reconstruction, rethinking how their principles and beliefs apply in the 21st Century.   They’ll need to look at other successful conservative parties in Europe, and most of all recognize that the world today is not the same as it was thirty years ago.

Perhaps its fitting that a party that has been fighting against contraception insurance with no co-pays for all women should have its Plan B fail.   The party has reached rock bottom, there is no place to go but up.   Will it be a Rubio uniting the conservatives with a more moderate message?   Perhaps Chris Christie’s gruff style can be a pragmatism conservatives embrace?    Right now the Republicans are down and out, but the future is pregnant with possibilities.

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Going Over the Cliff!

Going over the fiscal cliff?

Warnings are everywhere that we must avoid the fiscal cliff or else face recession.    The fiscal cliff is a series of tax hikes and spending cuts resulting from an inability to achieve targets on deficit reduction set in 2011.   The spending cuts hit 1000 government programs, touching ones dear to both Republicans (military spending) and Democrats (Medicare).

Most of the cliff involves repeal of the payroll tax cut (which expires in December) and the Bush tax cuts (which expire January 1).   The argument is that the mix of tax increases and spending cuts will seriously damage the economy and cause growth rates to plummet into recessionary territory.

The impact of the “cliff”

All this is set up by the negotiations around the debt ceiling back in 2011.   The Republicans refused to raise the debt ceiling unless budget cuts were made to halt the increase in the deficit.    President Obama entered into negotiations with House Speaker John Boehner to try to reach a grand bargain to do just that.   The talks failed.  The “grand bargain” that the Republicans walked away from would have been about 85% spending cuts and 15% tax increases.

Republicans rejected any tax increase, making a deal all but impossible to reach.   236 of the 242 House Republicans, and 40 of the 47 Republican Senators have signed a pledge to Grover Norquist’s “Americans for Tax Reform” organization promising not to raise taxes ever.    Many Republicans figured that if they held out they could take the Presidency and Senate in 2012  and then craft their own measure with no need to compromise or raise taxes.

At the time people thought the Republicans had bested the President.   He was ridiculed by progressives as having been naive, willing to bargain with Republicans when their goal was to do whatever they could to defeat him in 2012.   He was called spineless for not invoking the 14th amendment to circumvent Congress and raise the debt ceiling unilaterally.  Obama’s lowest ratings were in the wake of the breakdown of those talks.   In retrospect Obama looks like a strategic genius – the Democrats have set up a situation where they hold the best cards, thanks to the sequestration deal and the automatic expiration of the Bush tax cuts.

So will the fiscal cliff cause a recession?   Perhaps, but the damage will be limited.  A couple charts:

Note how quickly the economy recovers after the sharp dip

And:

Note that the damage is mostly in Q1 2013, cliff or no cliff the prognoses for the rest of 2013 are similar

Beyond that, growth after 2013 is robust, even if we go over the cliff:

By 2014, things could be improving dramatically

Going over the cliff could enforce a kind of restraint that would yield long term benefits.  At the very least it would unclog the gridlock preventing real solutions to the budgetary and economic crises.   Letting the Bush tax cuts expire would render the pledge to Norquist meaningless — taxes would go up automatically and any agreement to cut taxes to the middle class would be a tax cut, not a tax increase.

So why all the alarm?

Besides the fact that the slow down in 2013 would be real, there is concern about the cuts themselves.   Many important government programs will be cut, angering the left.   Defense spending will be cut, angering the right.   Good!  This will force them into meaningful negotiations.

The Republicans essentially demanded no tax increases or defense cuts, but steep cuts to entitlements, social welfare programs, education and programs Republicans disliked (such as PBS).   In the heady days after the 2010 election that might have seemed feasible, especially if they were going to win back the Presidency and Senate.   Now it’s a pipe dream.

President Obama was re-elected, the Democrats remarkably gained two Senate seats and even though the Republicans still hold the House, the majority is smaller and overall Democratic candidates for the House received more votes than did the Republicans.    The Democrats have every incentive to make a deal now, while the Republicans would prefer to come up with a piecemeal deal to push the issue down the road to when political conditions are more favorable.   The farther they can get from the 2012 election the better it will be for them.

If we go off the fiscal cliff, the GOP will be forced to deal quickly.  To prevent tax increases on the middle class there may be a will to increase capital gains taxes – something that could raise significant money.   Those low tax rates are why Warren Buffet pays a lower rate than his Secretary and why Governor Romney  thought it more harmful to release his tax returns than to keep them secret.

Nothing should be off the table.    Each side could recover from political hits by the 2014 election, better to act sooner rather than later.   Going over the cliff will make both sides eager to reach a deal.

Expected tax increases should we go off “the fiscal cliff”

The danger in that is that the Democrats could make the mistake the Republicans did and overplay their hand.    In 2014 it is unlikely the Democrats will gain the House, and if this deal goes bad due to Democratic intransigence the Republicans could have another big off year election.    The Republicans blew it by not making a deal when they were in a position of strength, the Democrats can’t afford to make the same mistake.

It could be that the cliff is the only thing that will force both sides to actually make structural reforms that can lead to a sustainable budget.     It’s not just about the money.   The Democrats can “give” on issues like taxes and defense in part in exchange for tougher regulations on Wall Street and less resistance on appointments to agencies like the FHFA (Federal Housing Finance Agency).

Perhaps the Monster has a good heart?

Ultimately we all lose if there isn’t bold action as quickly as possible to get the government to a sustainable budget with a modicum of bipartisan support.    Fear of the cliff stands in the way of making bold choices and creates the danger of kicking the can down the road to deal with at a later date.   Go off the cliff.   Face reality.   A sharp down turn will be short and followed by growth.   The pain will be limited, and it just might force the politicians to make difficult choices.

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Why Romney’s “Jello” Strategy Fails

In politics it’s a good idea to turn a weakness into a strength; Romney tried to do so with his reputation as a flip flopper

You can’t nail jello to a tree, the saying goes, and it has been the philosophy of the Romney campaign.    It’s not working, and if Romney doesn’t change course soon, he’ll enter the twilight zone inhabited by John McCain, Bob Dole and Walter Mondale as they went through the motions in a campaign whose outcome was already known.

On paper, Romney’s “Jello” strategy made sense.   First, Romney has a record as a solid businessman who saved the Salt Lake City Olympic games (exaggerated credit, but hey – this is politics) and is known as a pragmatic moderate.   He’s in a race against an incumbent suffering an ongoing economic crisis, and whose legislative activism has generated strong antipathy on the right.   Still, Obama has a solid campaign team good at opposition research and not afraid to play rough.

The fear in Romneyworld?   Team Obama will take apart any specific plan or policy they put forth and use it against them targeting whatever demographic might be most turned off.   Worse, they could make the election about comparing plans as the campaign sinks to a morass of detail, rather than it being about replacing a failing President who got in over his head with an experienced private sector success.

The answer?   Stay vague.   Don’t give them any ammo, say nothing specific that can be used against Romney.   Instead, play the game on their own turf, make it about how the President’s plans have failed, put Obama on the defensive.    Be jello.   If they land a punch – squish – the jello shifts shape and remains.    Obama will be flailing but unable to connect.   Romney can pick and choose from Obama’s four year record to attack at will.

Won’t people demand specifics?   Nope – modern campaigns are about big themes and slogans.   Moderates will simply assume that a pragmatic moderate Republican businessman can be trusted.   Romney will veer right in rhetoric but people will assume that’s just for politics.   The right wing will have to accept the rhetoric and support him because they’re virulently anti-Obama.

Keys: keep it about the economy, avoid distractions, and don’t get suckered into giving details or responding to them.  Stay on track, implement the strategy and don’t let the ups and downs of the campaign tempt you to respond!   Expect the flip flop charge to work in your favor – moderates won’t believe the scare tactics coming from Obama, but the base will be satisfied that you’re the best choice.    Meanwhile massive amounts of negative advertising by outside groups will grind Obama so far down that he’ll be like Dukakis in 1988, diminished and ridiculed.   Indeed the rhetoric trotted out this summer by right wing pundits telegraphed that strategy – Obama was described as a desperate and incompetent loser, flailing about uncertainly in order to hold power.    Team Romney counted on that image to stick.

Trouble is, the strategy isn’t working.   President Obama has found a way to nail jello to a tree – nail the whole box!

Can you nail jello to a tree?

Instead of trying to trap Romney on details, the Obama team decided that if Romney didn’t want to paint a clear picture of who he is and what he’ll do, they’d oblige and paint one for them.    They’d choose how to define him, and shape the campaign narrative instead.    They nailed the entire Romney box to a tree.

Romney is afraid to release his tax returns.  He’s secretive.  He’s far right.  His policies are the same of those of President Bush, the same policies that brought this mess upon us.  His foreign policy is bravado and bluster, look where that got us!  Talking tough and saying America must be strong sounds like George W. Bush all over again – will Iran be the next Iraq?  And it’s working, Romney seems empty, doesn’t seem to stand for anything, and the campaign narrative is being defined by the President’s team.  Intrade odds are now 67% for an Obama victory.

I’ve said this before, but now it’s critical.   If we are to have a real race for the Presidency Romney has to come out and make a case, take a stand and level with the American people.   Being Jello may have seemed to be a good idea on paper, but it isn’t working.   I don’t think his campaign yet understands the extent of the change that they need.  Consider the focus they’re shifting to the “fiscal cliff.”

People don’t want vague attacks, they want solutions.

The debt ceiling was raised last year in an agreement that if the Congress could agree on spending cuts/revenue enhancements by 2013 automatic spending cuts would snap in place.   These include cuts on programs the Democrats support and defense cuts that Republicans are loathe to see implemented.  The idea was that the this would force them to compromise.   It didn’t work, at least not yet.

Governor Romney is issuing strong denunciations of Obama’s role in this agreement, though it was essentially a bi-partisan compromise.  Even Paul Ryan voted for it.  Moreover, it’s complex – look at the chart.   Warning of a “fiscal cliff” sounds vague and strange to voters.   If he gets into the details of what that entails, it gets confusing.  I think one mistake the Romney camp has made this year is that they are too “inside politics” in their arguments.   They use terms and labels that bloggers and political junkies know, but aren’t connecting to average voters.   Politicians need to always remember that the “inside game” is oblique and mysterious to most Americans.

The “Jello” strategy certainly seemed compelling on paper, but it’s failed.   Romney can stubbornly stick to it, hoping that bad news and perhaps a stumble by Obama will pull him over the top.  Given the economy, that might work (though I doubt it).   Or he can do something that some people doubt he knows how to do:  be himself.  Say what he thinks.   Defend the principles he believes in without worrying about what demographic group he might offend, or how the Obama team might use it against him.   He can take specific stands and lay out a vision of the future that goes beyond, “hey, I’m a businessman, I know how to run a company, trust me with the country.”

It’s a high risk high reward shift.  If he pulls it off, he could beat Obama.   If he fails he could turn off his base and risk an even bigger defeat than what now looks likely.     Yet the American people deserve to know what the Republican challenger wants for the country.   We’re not looking for a CEO, we’re looking for a President.    And if Romney refuses to comply, then team Obama will be happy to fill in the blanks and define what Romney’s vision really is.

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