The Proper Prism

There are many different ways to look at the challenges that face the USA as it moves towards the 2012 presidential election. The biggest challenge as far as the electorate is concerned is the economy. Polls show that people are more concerned with jobs and inflation than they are with government spending and the deficit. Concern is great about both topics, but jobs and the economy is clearly issue number one. Many Americans realize that the levels of government spending, taxation and regulation play a large role in determining what the economy does. There is also, however, a huge group of folks who only care about the economy and not about what makes it grow or shrink. As a result of these fact, the candidates for president need to tailor their messages so that they resonate with as big a portion of the eelctorate as possible. In short, all issues need to be viewed through the prism of growth and how to achieve it.

Look at it this way: the federal budget deficit can be cured in three ways. First, we can cut government spending; this is the current GOP approach. Second, we can raise taxes; this is the bulk of the Obama approach. Third, we can make the economy grow faster; that will reduce expenditures as more folks get jobs and it will also raise revenues as more taxes are collected. For all the chatter about the deficit, neither side seems to be focusing sufficiently on this third method. In reality, this third method should become the main thrust of the Republican campaign against Obama. Every move taken in Washington should be translated into how it will affect economic growth.

This applies to every issue. For example, look at the recent move by the National Labor Relations Board to prevent Boeing from opening a major facility in South Carolina on the ground that the move would constitute retaliation against the union of the workers in the Seattle area plants. Much has been argued both for and against this move by the NLRB, but most of the arguments get lost in the shuffle. The simple truth is that a move like this will create a strong incentive for American companies to move their operations out of the USA. The NLRB cannot limit the location of a plant outside the USA. So, if a company wants to have less expensive labor, Mexico, China or some other location will become the place to go. the net effect will be to drain more US jobs out of the country and to move them overseas. That means slower growth and fewer jobs. Everyone can understand this and few will be in favor of it.

Once the people understand that the policies of the Obama administration have almost uniformly had the effect of lowering growth and lessening job creation, the result of the election will be unquestionable.