Election Wrap

I was in a subway station yesterday when I heard a very outspoken woman, about 20 feet away, talking to her friend.  She had voted for Obama because Romney, if he had been elected, would take away food stamps, Section 8 housing vouchers, and all other manner of government goodies.

New York was always going to go for Obama, so much so that there was very little campaigning or advertising by either candidate.  While the Romney camp talked about cutting government spending, I don’t remember anything about serious cuts to existing programs.  Yet it was easy enough to read between the lines and believe that a Romney victory would lead to cuts in food stamps.

It’s a powerful argument to vote for Obama if your life depends on government subsidies, but is was almost entirely unspoken, other than the response to Romney’s remarks about the 47% who pay no Federal income taxes.

I can’t begrudge this lady her vote: she voted in her rational self-interest, as all of us do.  But to her, it doesn’t matter whether the economy does well or badly, or whether unemployment is 5% or 15%, as long as the government goodies keep flowing.

That there may not be enough productive activity to support these government goodies in the future, however, is another question.

*          *          *

I was in Amsterdam for a professional conference this week, and conversation often devolved into discussions about Sandy and the US Presidential election.  Generally, Europeans were expecting that Obama would be re-elected, and some people looked questioningly at me when I told them I had voted for the other guy.  Certainly, Obama is closer to the European image of what a President should be than Romney.

*          *          *

I don’t expect good things to come from Obama’s re-election: more economic stagnation, and a resurgence of price inflation.  But at least it’s over.

Alas, Campaign 2016 begins next week.

9 thoughts on “Election Wrap”

  1. Here’s the main reason why Romney lost: he can’t be trusted. True, no politician can be trusted but Romney was perhaps the biggest flip flopper who ever ran for president. He generally has been considered moderate but to run for president he catered to the right wing extremists who have contaminated the Republican Party. He ran as a pro choice moderate in Mass and from what I understand he governed as such. However his view has changed so much that it’s hard to tell. If he had stuck to the moderate viewpoint I honestly think he would have won. I was also extremely concerned about his outsourcing view and the fact that a factory in Illinois is moving to China and he flat out said he didn’t care.

    However, once he chose Paul Ryan as vice president I knew then no matter what he would never get my vote. Paul Ryan is perhaps the worst politician in recent times when it comes to hatred. He opposed the Ledbetter Act, and his budget would have hurt those people who need assistance most of all, including social security and medicare. What really angers me about Ryan is the fact he tried to claim he was doing a lot of this because of his religion. Guess what, I am Catholic as well and the Catholic agenda is to make sure people have enough to eat and survive. So many Catholics forget this part and concentrate instead on the abortion/gay marriage/ paying for birth control aspect.

    Having said that, I do think the welfare entitlement is a problem. In Illinois we have a permanent class of welfare who are generational. I know apparently they have limited welfare but yet I know people who have been on longer than the limit and the limit doesn’t include everything. Here’s the reality when it comes to the welfare system in Illinois and that is 54% of all births are now on Medicaid, most are out of wedlock and more births are born to unwed mothers than born to married couples. Many women I have known intentionally got pregnant just to get welfare and many abuse the system. These sound like stereotypes but unfortunately they are not. I couldn’t begin to mention the times I saw someone abuse the system, from a few Christmases ago where I saw a woman trying to buy electronics with her Link Card, to a friend of mine who would sell her food stamps to buy drugs, to others who would get medicine with the Medicaid then resell it. There is a lot of abuse in the system. I didn’t even mention that a huge percentage of those on assistance in Illinois (I’ve heard as much as 75%)are illegals. To work for public aid you have to speak Spanish now. Had I known then what I do now I probably would have done the welfare thing to pay for college debt free instead of taking out student loans though I had excellent grades.

    I don’t expect much good and didn’t expect it either way. With Romney I expected higher unemployment as more jobs went overseas with his blessing, and more corporation power, but with Obama I expect more wasteful spending and trying to push his agenda fiscally on people who disapprove (like the churches being required to buy birth control).

  2. Welfare benefits for people without children are usually tiny, and they may well be denied to people who are in a full-time or even a half-time (graduate students) program of study. Of course, benefits vary from state to state.

    I thnk that two things cost Romney the election: his comments about the 47% who don’t pay federal taxes (which ignores Social Security taxes in a lot of cases) and Hurricane Sandy. A third thing may be the “Let Detroit Go Bankrupt” op-ed piece in the New York Times. It’s pretty sad when the conservative press notes that the money that Romney must regret earning the most was the pittance that he got for writing that op-ed piece.

    At one of my previous jobs, we used to adopt a family for Christmas, filling their Christmas gift list, plus give them a Wal-Mart gift card for $500 or so. Imagine my surprise when I found the couple in front of me at the customer service desk trying to cash in the gift card. We had invited the family to our office Christmas party to accept the gifts.

    The most interesting result of the state election was that the proposal to require the state legislature and our congressional delegation to support a constitutional amendment to overturn Citizens United passed by a 3:1 margin. Recreational marijuana passed only 54% to 46%.

  3. I have seen that too, where people were given gifts and then wanted to cash them in for the money. Really changes my mind about giving. By welfare I meant that my friends who all got on welfare had kids and maybe I should have as well. Obviously that would have been bad but when people see others being rewarded for bad behavior it makes them think maybe they should do it too. In the case of my friend she barely graduated high school because she was always drunk while I was an honor student yet she got a free scholarship to attend college being on welfare and I had to take out loans.

  4. Underneath it all, I don’t think the government can fix the economy, regardless of who is elected. The best the government can do is create an environment in which the private economy can flourish. Part of that is being realistic about what lies ahead of us and what our constraints are. And on those measures, I thought Romney would do a slightly better job than Obama.

    Businesses will not expand and hire in a time when their demand is slacking and it seems as if the economy will go off the rails at any moment. That’s what we’ve had since 2008, and we’re now in for another four years.

    So we’ll muddle through, unless something blows a gasket: inflation escaping its cage, a new war, a Eurozone implosion.

  5. Like I said my main issue with Romney is (besides being a flip flopper)is that he is big on outsourcing. I blame this along with visaed workers for part of the problem we are facing with the economy. People say they want a businessman for president, but to me the best businessman to run for president was Perot. Sure we can say maybe Perot was kind of nutty but he was on the mark about outsourcing. However the reality is neither party realizes how outsourcing and visaed workers are destroying our way of life. Obama is especially clueless when it comes to visaed workers because he wants to increase these. I actually called his headquarters which was less than an hour from me and complained about this. The woman I spoke to defended it by saying these were worker shortage fields and when I asked what fields have shortages she said “I’ll get back to you”. No response back of course.

  6. Outsourcing, in itself, is not a problem. It becomes a problem when one outsources to a firm outside the US, doing work with non-US labor at non-US wage rates. It’s also bad when a US firm exports portions of its operations, without necessarily subcontracting them to another party.

    Alas, I don’t believe the government can do anything to directly stop offshoring. One could try to disallow deductions for expenses related to offshoring, but businesses will quickly find ways around that. Another approach is, used in the past, is to assess import tariffs. But both Republicans and Democrats are wedded to the idea of ‘free trade,’ and a stiff duty on, say, Chinese goods will mean that Wal-Mart will no longer be able to offer ‘always low prices,’ which will cause its own problems.

    Visaed workers are another problem. The effect of visaed workers, as well as illegal immigrants, is to drive wages down for the rest of us. Yet US businesses moan that they can’t find the necessary talent here, and need still more foreign workers.

    There was a piece on 60 Minutes last Sunday about a manufacturer who could not find employees to staff his factory. He was paying $12/hour for light manufacturing work that required some knowledge of computers and mathematics.

    Adjusting for inflation, I did better in the early 1980s as a subway conductor. And that was a job that a high school dropout could do (literally: there were no education requirements whatsoever).

    The manufacturer, and other businesses in the area, prevailed on the local community college to provide a training course for manufacturing. 60 Minutes followed a couple of the students, who were hired at the factory and happy to have a ‘real’ job.

    If the manufacturer had offered, say, $20/hour, he’d have qualified candidates banging his door down. But as things stand, he’s able to keep his factory running with much lower wages, and with some of his training costs foisted off onto the local government.

    The traditional wisdom is that labor is a buyer’s market: if there is high unemployment, it means that sellers (employees) are willing to accept lower wages and more stringent working conditions. But what if the traditional wisdom is wrong?

  7. The thing is though that there are many incentives such as tax breaks to send jobs overseas and that needs to stop. Many times we the taxpayers are subsidizing the jobs that are going overseas and that horrifies me. What I would suggest is that the companies that keep jobs here get tax breaks and those that send jobs overseas pay more in taxes. I do think though that the idea that items are cheaper if made in China is often a myth because many of these products (like Apple products)are still expensive. Many products are cheaper made in China but if no one has the money to buy them then it defeats the purpose of making them overseas.

    I personally have lost jobs to visaed workers and in all these cases the job was not a shortage one, meaning there is a shortage of workers. In fact contrary to what many think many visaed workers come here and take even jobs with no worker shortages. This is what happened to me because there are a lot of unemployed people in marketing and training, the fields I have worked in the last 10 years. I am not directly in competition with illegals but the lower skilled people are and many jobs that used to be well paid like construction are now low paid.

    People complain that American students are lacking in skills and to some extent I believe that. I know when I was in high school we only had to take a year of science and 2 years of math. I know current students who now have to take various non essential classes like diversity, values, etc and these classes could be replaced by another math or science class. Of course things were different then because that was before the world wide web (there was the internet but it was called something else and mostly for military). This was also before the outsourcing we see today.

  8. I did some research, trying to find ‘tax breaks for sending jobs overseas.’ What I found was interesting, and will be the subject of my next post. The tax advantage of doing business overseas would not be easy to fix, and I don’t see major party politicians of either stripe doing anything about it.

    If you can hire a sharpie immigration lawyer, you can play the USCIS like a fiddle and get whatever you want out of them. It’s how Disney can staff Epcot with honest-to-God foreigners. If you see the immigration rules as regulations to be gotten around, rather than laws to be respected in letter and in spirit, then given the money, you can pretty much do what you want. So, although some classes of visa are reserved for jobs with ‘worker shortages,’ that can be worked around. Also, there are hundreds of thousands of legal immigrants who arrive every year on petitions by their families.

    Some politicians and business types are enamored of free world trade because they imagine it as a path to world domination through the powerhouse of US exports. But free trade only works if you have something to offer. If we become a nation of overpaid knuckleheads steeped in bureaucratic gobbledygook, who will pay for that?

  9. I’ve mentioned this before but last year I interviewed for a marketing job that went to a visaed worker. I found this out via Google and even the person who told me about the job told me so. We need to stop making it so easy to outsource jobs overseas and there things that can be done such as eliminate loopholes and lower business taxes. Also, eliminate the actual tax deduction that companies get, aka the break they get for moving expenses.

Leave a Reply