This is an easy election for a challenger to win, but your instincts have to be right. (Image credit: Getty Images via @daylife)
Republican Presidential challenger Mitt Romney has been an invisible candidate of late, even as the nation is aching from a crisis of leadership. The economy is showing no real sign of life, with every jobs report confirming inexorable decline in the nation’s work force. And now in the realm of foreign affairs, deadly adversaries in the Middle East are successfully pursuing strategies by which core constitutional freedoms in our own country—such as freedom of speech—might be abridged.
Were he facing a formidable opponent, the incumbent president would have no chance of winning this November—none. The economy is too poor, and the respect for America abroad too minimal, for any model of political science to predict anything but a rout in favor of the opposition.
That President Obama is not facing a formidable opponent, and has quite a clear path to re-election, was made perfectly clear two days after the September 11 outrages at the consulate in Libya.
On September 13, the Romney campaign issued a power memo reminding everyone that…Obama has not fulfilled his promise to call China a “currency manipulator.”
Mitt Romney is out there fighting yesterday’s war.
Remember China-bashing? It was standard fare back in the pre-Great Recession period of the George W. Bush presidency. China was maintaining a fixed rate of exchange between its currency (the RMB) and the dollar, and calls went up that this was “manipulation.” The evidence (inexplicably) was the merchandise trade deficit between the U.S. and China.
Never mind that fixed rates of exchange supervised the industrial revolution in the 19th century, prevailed everywhere that prospered in the great years after World War II, and were there in the 1990s to help vault China out of the fearsome isolation that Mao had sentenced the country to for nearly half a century.
Forget about all that—if the United States wanted the dollar to fall in value (to encourage “exports” and such), China was supposed to oblige by unfixing its currency and having it appreciate against the dollar.
Sound so very yesterday? It is. It’s very 2006.
We have of course learned a great deal about the world economy since then, one of the chief things being that the guardians of the U.S. currency are ready to manipulate it to death. We are now this week embarking on the third massive “quantitative easing” experiment that will sink the dollar’s value relative to stable things like gold and oil (and probably food too) in even greater record fashion than has already been done.
We have also learned (care of Europe) that at some point, if you have a currency that promises devaluation after devaluation, your government is going to have a very hard time financing its debt—this message unduly pertinent, given that our national deficit now comes in at over $1 trillion every year.
In other words, we have learned one thing, and that is that the dollar must be strengthened. A strong dollar would stop the investment strike (which has taken the form of bloated corporate profit hoards and gold near $1800 an ounce), in that investors would rush to earn returns in real-sector investment if those returns came in a promising currency. And a strong dollar would force the Chinese to strengthen their currency, in that an appreciating dollar implies an appreciating RMB under fixed rates of exchange.
Want the Chinese to raise the value of the RMB? Raise the value of the dollar.
Sound minds articulated these lessons well enough back in 2006, but people like Ben Bernanke, who that year left the chairmanship of the Council of Economic Advisors for that of the Federal Reserve, were notably uninterested, even hostile. That’s right, the Romney campaign is aiming to take us back to the intellectual status quo of the pre-crisis George W. Bush administration, a status quo we are still very much living with right now, despite Obama, given Fed leadership.
It is unlikely that the steely adversaries of the United States would be testing President Obama right now if they were not confident that the man stood to be at the helm for a few more years. Romney has maybe three weeks to save his campaign. As he wanders down the China-bashing garden path this September, the leadership crisis with which this nation is beset further entrenches itself as one of the signature features of the twenty-first century.