That great whooshing sound heard when markets opened after U.S. President Barack Obama's re-election was air gushing out of the balloon investors hoped would lift the U.S. private sector out of four years in presidential purgatory.
While Mr. Obama had rightly denounced greedy investment bankers for igniting the 2008 financial crisis, he failed to differentiate between Wall Street's culprits and the great majority of American businesses that became victims of the ensuing recession. As if this demonization of American business wasn't demoralizing enough, the Obama administration unleashed a regulatory witch hunt, forcing corporations to focus on costly, unproductive legal defences rather than create jobs.
While railing against companies that were forced to move manufacturing offshore to survive, he introduced legislation making domestic manufacturing even more costly by removing the secret ballot rights of workers facing unionization. Predictably, private sector job growth remained anemic, leaving the White House to rely on deficit spending for economic recovery. But the economic doldrums continue, even after Washington drove up the national debt by 60 per cent to a staggering $16-trillion (U.S.) over the past four years.
Meanwhile, the damage wrought by this fiscal folly is hitting home with a vengeance. Mr. Obama begins his second term with the so called "fiscal cliff" looming on Dec. 31. And what is the likely outcome of efforts to avoid that fiscal cliff? Continuing to borrow and spend at a reckless pace, setting the nation on course to add yet at another $1-trillion of federal debt in 2013.
There is much to admire about Mr. Obama's personal traits. He is a good husband and father, he genuinely cares about people, and he really wants to do the right thing. The same can be said of Mitt Romney. What separates the two is how to achieve the best result for the American people. And that has largely been shaped by their contrasting life experiences.
Mr. Obama, a former civil rights lawyer and university professor, has never worked in the private sector. Perhaps that's at the root of his skepticism and mistrust of what he derisively calls "big business" and why he believes that only government spending can fuel economic growth.
Mr. Romney, on the other hand, spent his prepolitical career figuring out how to turn around beleaguered private sector businesses. He understands that no country can consume wealth without first creating it. And he knows that unleashing the potential the world's most innovative and capable private sector is the only way the United States has or ever will rise from the depths of the Great Recession.
Today in the United States, almost one in six survives on government food stamps and, as Mr. Romney infamously stated during the Republican primaries, 47 per cent of Americans don't earn enough to pay income tax. Mr. Romney's statement came across as blaming these people, when he should have blamed Mr. Obama's failure to unleash job creation. The cruellest thing a government can do is make people dependent on public programs that can't be sustained. Their suffering, when America hits that inevitable debt wall, will be profound. And, like an earthquake, the impact will reverberate most severely in its closest neighbours.
The fiscal cliff will be temporarily avoided through band-aid political compromises, or it will be simply punted down the road by a few months. And the national debt limit will be raised again and again because, with one out of every three dollars of public expenditures financed by borrowing and half of U.S. spending tied to social security entitlements, stopping the growth of the national debt would require cutting more than half of all other spending. The only way to keep from going over that fiscal cliff is private sector job and wealth creation – in other words, growth.
A Romney win would have encouraged that to happen, but it's hard to be optimistic that Mr. Obama will unleash the potential of American business in the next four years any better than he did in his first term.
Gwyn Morgan