The Presumptive President

Image courtesy of Charis Tsevis

I know it's early, but I'm ready to project a winner for the U.S. Presidential Election long before CNN does. I am projecting that Barack Obama will be the forty-fourth president of the United States.

They say success is 90% effort and 10% luck (or 10% effort, 90% luck depending on who you talk to)--Either way, Obama definitely has the pocket aces at this point. When Obama was first elected to the senate, he and his advisers devised a plan to make a bid for the White House in 2012. His camp realized that George W. Bush left a really big window open; actually, I'm not sure if it was an open window or if they forgot to erect walls altogether.

Bush's approval rating was 28% in April according to a USA TODAY/Gallop Poll. His disapproval rating is the highest for any president since Franklin Roosevelt. This is quite a sharp fall after his approval rating spiked to 90% in the days following September 11^th, 2001.

Obviously, polls like any other indicator have their limitations. Another indicator is consumer confidence, which hit 16-year lows in June. The last low was in 1992, right before Bush (Sr.) lost his lease on the White House to the democrats.

That doesn't mean the U.S. economic woes are fully to blame on Republican policy, or even President Bush for that matter. In fact, many political scientists agree that the framework of U.S. politics imposes very strict constraints on the President's power, even though he (or she) is sometimes termed the most powerful person in the World. Additionally, the U.S. Congress is currently controlled by the Democrats. In reality, policy failures are some combination of circumstance (i.e. luck) and failed policy by all parties involved. I don't pretend to know the ratios of those two factors.

Iraq Example
Any sufficiently balanced policy will maintain America's prosperity so long as it recognizes and adapts to the challenges current times rather than simply using the strategies that worked in the past. With hindsight, it is now hard to find many people who still strongly believe the 'Operation Iraqi Freedom' was a good policy decision. The war appears to have been justified on the basis that brute force military action was sufficient for victory. That worked quite well for the invasion phase following which President Bush stepped out on an aircraft carrier declaring "Mission Accomplished!". Post-invasion though, brute-force military tactics have proven mostly unsuccessful against the guerrilla tactics used by insurgents that include suicide bombers, IED's and sabotage of oil infrastructure. I'm no historian but I was told France started digging trenches on the eve of WWII. The Germans rolled over them with tanks--this is what I mean by relying on strategies that worked well in the past. Lawrence Lindsey, Bush's former chief economic advisor, speaks to his assessment of the cost of the war when he says, "I misjudged an important factor: how long we would be involved [in Iraq]." Current estimates are now between 5 to 10 times higher than what was circulating in Washington before the war ($30 billion up to $200 billion). The casualty count for U.S. soldiers is currently confirmed at 4,102 deaths*.

The Candidates
Clearly, the name George W. Bush is not going to be on the U.S. election ballot. John McCain could certainly be a worthy candidate, yet he probably won't be able to distance himself enough from Bush to win. He does has some significant policy differences, but the single biggest election issue is and will remain the economy. His economic policy is considered 'status quo' with the Bush administration. McCain has the additional challenge of backtracking on numerous past admissions that he is "not an expert on some of this stuff.." ('this stuff' referring to economics). How much this should matter is debatable given that there is no shortage of qualified economists in Washington, but in the eyes of most voters it will matter. It also won't help that there is no shortage of videos on YouTube depicting his shortfalls when it comes to understanding the economy.

There is definitely no guarantee that Obama will be able to fix the economy of course. Some even argue that he will be worse for the economy. His social values and principles are very liberal. On the other hand, his social and economic policies appear to encompass a more pragmatic compromise than his ideals. Whichever the case, if the economy continues to struggle through November, the Republicans will be blamed, leaving the door open for the Democrats.

While Shelby Steele makes some compelling arguments (in his book A Bound Man) as to why Obama can't win the election, I must disagree. Steele's arguments center around race and character, while the focus of the election will be the economy. When Bill Clinton first took office in 1992, voters leaving the polls said the economy was the biggest issue for them, with character being a trailing issue. The Reverend Wright issue appears to be spent while U.S. economic concerns gain momentum. The mortgage crisis fallout continues; house-equity is dramatically falling as are housing starts, the U.S. dollar and equity markets; sovereign and domestic U.S. debt continues to rise; the bulls on commodities...

Economic Outlook
I won't deny that it's possible that the economy could look more positive toward the November election, but the signs don't seem to show that at the moment. The U.S. Federal Reserve continues to resist calls to raise interest rates to bring back the value of the USD (and help stop the rise of oil prices). Some have blamed Fed Chairman Ben Bernake, but unlike John McCain who "wish[es] interest rates were zero", Bernake has some very impressive academic credentials in economics. Hence there are only two logical reasons to delay raising interest rates until late 2008 or in 2009--that more write downs are expected from sub prime mortgages going bad, or that they believe raising interest rates now would result in a catastrophic market collapse. It seems like the Fed's hands are tied with the stagflation dilemma.

All Senator Obama needs to do now is follow the advice President Bush gave him when the two first met at the White House:

"When you get a lot of attention like you've been getting, people start gunnin' for ya. And it won't necessarily be coming from my side, you understand. From yours, too. Everybody'll be waiting for you to slip, you know what I mean? So watch yourself."

[excerpt from The Audacity of Hope]

It will be smooth sailing for Barack H. Obama from now until November. And he has George W. Bush to thank for rolling out the red Carpet. It will still be a close race, but if I had to bet, I'd put my money on Obama.

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Complimentary Reading:

1. Luck - A president's best jobs plan (by Chris Isidore, CNNMoney.com senior writer)


2. The 44th President's $4 Trillion Headache
   (by Jeanne Sahadi, CNNMoney.com senior writer)


3. Broad Says Economy in Worst Slump Since World War II (Anthony Massucci and Erik Holm, Bloomberg.com)

Please feel free to comment on my prediction, but hold back on your comments regarding Obama's suitability for U.S. President--I will get to his flaws, strengths, etc. in an upcoming post. But first, I will examine why Alberta is very well-positioned relative to the global economy despite "growing concerns" around the globe about climate change.