Elections Have Consequences

Heading into round 2 of a three round debate format (tonight), I think its time to put a few core concepts on paper (or e-media in this case) for folks to remember about this political season.  My role or task here is not to be partisan (your decision suffices on this front) but to be focused on the “heart” of the subject, not the rhetoric that permeates the debates and the political reports.  In short, rather than slicing and dicing on things that ultimately matter very little, let’s look quickly at why elections have consequences.

• In the system of government tried and true in the U.S., the presidential election is relatively unimportant in the daily life consequences of citizens.  Promises about tax cuts, passage of certain legislation, removing certain regulations or adding new ones is pure rhetoric.  Our system does not afford the President such powers.  He/she is not a king or even a legislator as powerful as the Speaker of the House.  The election with more consequence is the one where seats in the House (all) and the Senate are open.  So goes the political balance, so goes the ability for any president to achieve policy agenda priority.
• Where the President matters in elections isn’t often discussed in a debate or is certainly, glossed over.  The Presidency is a position of state; a leader to the international world and the domestic (entirety) world.  In this regard, the election is about certainty, purpose and vision.
• The next president will likely play a very critical role in shaping the judicial branch of the government as four justices are over 76, one with pancreatic cancer and another who has openly said he will retire post this term and the election.  While the President can’t appoint any old person without confirmation, wide deference is given to this appointment and but in rare exceptions, confirmations are all but certain.
• Rhetoric and policy language aside, the Presidency in an election is all about picking someone who can truly galvanize compromise, not push ideology.  The best at this role includes names like Reagan, Roosevelt, Kennedy and Lincoln.  They knew that ideology stabilized voters and painted a picture but that the true job was about action not rhetoric, photo opps and speeches.

What is at stake today is an array of deep challenges across a breath of policy fronts.  The following list is not exhaustive but prioritized by a guy who is an economist by study and a health policy and health care businessman by trade.

• Its time to ignore the phony math and crazy skewed data published with regard to certain economic indicators spewed across the airwaves.  The reality is that economic growth expressed via GDP is stagnant and it has been for quite some time.  Unemployment, underemployment and personal income is at perilous levels and not improving.  The recent drop in unemployment is about as real at the main street level as the Tooth Fairy.  Yet, jobs do exist that pay well but the gap between skill levels and the job requirements continues to widen.  Manufacturing has changed and today, it requires skilled work.  So do health care jobs.  We also need to somehow, do a better job reminding our children that not everyone is suited for a career in management and most jobs, require that you show up, work hard and maybe, just maybe, get a little dirty now and then.
• Bad, forget that, horrendous and irresponsible fiscal policy from Washington has the country facing what many are calling “the fiscal cliff”.  The timing could not be much worse given the health (lack thereof) of the economy.  Defense spending and sequestration cuts are hardly the major issue here – the cuts are very minimal and parceled out over a decade.  The issue here is revenue and Washington has boogered-up tax policy via tax credits, one-time reductions, etc. so as to create a Phantom Menace around personal and corporate income.  The first priority at hand is to create revenue certainty and simplicity via sane tax policy.  The next is to rationally, reign in non-essential spending.
• There is no path to prosperity (sorry Paul) and no way forward without entitlement reform – large-scale, total.  Entitlements consume every dollar of revenue today and no tax policy fixes that equation.  Reform must occur.  One of the most ironic and frankly scary conversations I have with hospital folks is around Medicaid and Medicaid expansion.  When hospitals argue that Medicaid expansion is a good thing because it reduces the number of non-paid services provided, I know we have come to an end.  As the old Pogo cartoon strip relayed, “We have met the enemy and he is us”.  Continuing to do more of a dumb thing faster, with more money on a broader scale only produces more stupidity.  Expanding entitlements with debt financing is about as idiotic of a proposition as I can think of, regardless of who gets paid.
• Drilling for more fossil fuel is not a solution to becoming energy sufficient, creating more end-product capacity is.  We need to invest in refinery capacity and modernization and locating the same where it logistically belongs.  We also need to drop the “green is good” at any cost if we expect the economy to recover.  Green is only as good as the return on the investment dictates.  Using food for fuel is a stupid idea especially since the only way it is economically feasible is with federal subsidies.  It is even more idiotic when viewed in light of the energy input required to produce an ounce of a product that is less efficient.  And no, I am not anti-environment as I am avid outdoorsman and a life supporter of Ducks Unlimited.  I am a pragmatist and I know that economies seek equilibrium – balance.
• To rebuild the “American Dream” (if this language suits), we need to get everyone in the U.S. to again have “skin in the game”.  We aren’t there and in fact, we continue to widen the gap between those who pay and those who don’t.  In a bad CBS interview when Mitt Romney was asked if it was fair that a man of his status in life paid less by rate in taxes than someone earning $50,000 per year, Mitt bombed.  The fact is that Mitt pays more in rate, at his 15% or so, than the person earning $50,000 or $60,000 today.  This is even after giving millions to charity, which if imputed into this tax rate, raises it even higher.  Trust me, I am not a die-hard Mitt fan nor am I advocating for him.  The plain reality is that the incentives need to align so that everyone has skin in this game not disproportionately more by income.  If for no other reason than getting it right, we need to quit pointing fingers and bashing the Mitt Romney’s of the world as last I checked, Mitt earned his money and created lots of jobs.  He isn’t even as rich as Bill Gates or probably, Brad Pitt but no one bashes Brad.  How many jobs did Brad create?  I know the answer for Bill.  Class warfare is ugly and we are busiest today trying to escalate the war.
• As I have written before and I live through it and see it daily, certainty is lacking.  The real issues we face require simplicity and certainty in order for jobs to grow, homes to be sold and businesses to grow and multiply.  This is less about numbers and more about policy.  Governments stink at and are incapable of redistributing “wealth” and legislating morality (unless the government is a totalitarian state and as history has shown, those don’t last real long).  Wealth balance comes from matching productive inputs with an investment return such that it is equal or greater in value to the input, to create sufficient and when needed growing levels of inputs – this system creates balance across executives and workers alike, proportionately.  We can’t evolve to a system that is punitive to those who take risk and lever their talent for handsome reward because arbitrarily to some, this isn’t fair.  I’ll defend Brad Pitt’s right to make gazillions if people are willing to reward his “input” in the form of acting talent, etc., even though I don’t think much of his movies or his acting.  Truth be told, he earned it and took the risks and leveraged whatever his gifts were and no governmental entity should try to redistribute his earnings to someone else in the guise of “fairness”.  He should pay proportionate by rate and rate alone, taxes but no different from someone who uses his/her talent to weld.  If Brad wants to  redistribute his wealth via charity, that is his choice.

Happy debate watching – enough said – for now.