The Tumultuous Era in US Economy and Presidential Election

Omar Sindi | Exclusive to iKurd.net

In the near term, the outlook for the U.S. economy’s recovery looks grim. In the long term, the outlook for the economy looks grim. It’s so uncertain that it might take a decade before any president, of either party or ideology, can claim credit for fixing the economy.

Recent polls show that President Obama has a slim lead ahead of the presumptive Republican nominee, Mitt Romney. However, if Obama loses in November, the ultimate factor should not be Romney, because he (Romney) has not offered any cure or economic policy agenda for a near-term solution or long-term fix, other than his campaign slogans blaming all economic ills on Obama’s policies.

In fact, the United States economy was in deep trouble before Obama and his team entered the White House. In addition, President Obama’s recent public support for gay marriage could further alienate conservative groups, especially religious sects, Catholics, Protestants, Muslims, etc.; however, on the other hand, it might also motivate more liberal-minded people to vote for President Obama on Election Day.

The winter’s confident signs of economic recovery have dissipated, leaving a spring of uncertainty. A see-saw pattern of weekly unemployment claims has risen again, and housing starts have diminished. The outlook of a new European recession may threaten to suffocate U.S. exports and jeopardize global finances.

However, the reasons behind the past economic troubles may indeed threaten Obama’s chances of re-election and pose a risk to Romney’s prospects in 2016, if he unseats Obama this fall. It seems that the U.S. economy will not generate enough jobs or prosperity for a president or a party to claim credit.

Regarding the housing market: The difficulty is not just that over 10 million homeowners owe more on their homes than those homes are worth. Additionally, the housing outlook is sluggish, with sales forecasted to remain low because many buyers do not have enough cash for a down payment or do not qualify for new loan terms under new regulations set by the federal government. Even with interest rates as low as they can be, this remains a challenge.

That’s what happens when U.S. incomes fall and have persisted in doing so despite the U.S. economy’s semi-recovery.

The slowdown or decrease in wages is partly due to U.S. multinational corporations, which have, in the past, helped create jobs with high pay. Now, these corporations are hiring abroad or moving overseas to access much cheaper workforces. Some time ago, Commerce Department data showed that U.S. multinationals increased their domestic workforce by a few percentage points during 2011, while they significantly increased their overseas workforce. Many of these companies were previously based in the United States.

With offshoring comes lower wages for the American workforce, whose jobs may be transferred to regions with cheaper labor.

The ongoing decline in wages for American manufacturing jobs may slow recovery. For example, in the United States, the average manufacturing hourly wage is above $20, while in China and India, for the same work, it may be below $5 per hour, likely with no benefits. A recent announcement by a company indicates they will help train the Chinese workforce to build commercial airliners, which will take another chunk of sensitive American jobs.

Transferring American technology overseas will cause more Americans to join the unemployment line, making it more difficult for them to afford homes, cars, or even college tuition for their children. A little over a month ago, a New York Times poll showed Obama and Romney at even percentage points, with many respondents expressing concerns about the U.S. economy and their offspring’s economic well-being.

In this century, the only U.S. economy has managed to afford two wars for more than a decade at the same time. These wars have cost U.S. taxpayers more than two trillion dollars in Iraq and Afghanistan. The Iraq war, at least on the surface, aimed to overthrow a dictatorial system and replace it with a new world order and a democratic system.

Pundits agree that this has not happened yet, as Iraqi Prime Minister Nuri al-Maliki is trying to consolidate power and move toward a one-man rule, despite U.S. Ambassador James Jeffrey claiming in an interview with an Arabic magazine that the U.S. left behind a young democracy in Iraq. Afghanistan’s war, if history teaches us anything, shows that neither the British nor the former Soviet Union succeeded there. The current war in Afghanistan, led by the U.S., also does not look promising, yet U.S. taxpayers continue to fund the ongoing conflict.

There are no signs that Romney’s platform suggests he will defy these courses of action.

Extending worker power to reinstate the share of corporate revenue that once went to wages, or using the government’s power to help build domestic industry, is not part of Romney’s tax proposal. His tax proposal calls for lowering taxes on the wealthy, and his philosophy is that lowering taxes on rich people will create jobs in the United States.

But President Obama has been trying to blame economic ills on his predecessor, stating that when he took office, the U.S. economy was already in dire straits.

Late President Ronald Reagan was re-elected for a second term after convincing a majority of the American people that his policies were based on a strong economic forecast. Former President Bill Clinton was also elected for a second term based on a strong U.S. economy, and Clinton was one of the presidents during a period when the U.S. economy projected a surplus.

Omar Sindi, a senior writer, analyst and columnist for iKurd.net, Washington, United States.

The opinions are those of the writer and do not necessarily represent the views of iKurd.net or its editors.