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US Presidential Election 2012

The United States' 57th quadrennial presidential election took place in November 2012. Incumbent President and Democrat Barack Obama won election and is running for a second term. His major challenger was former Massachusetts Governor, Republican Mitt Romney. From January to June, Americans voted in nationwide state level primaries and caucuses, which serveed the purpose of selecting party representatives of states to be sent for the party convention. The key issues in this race for the White House were social issues including the state of the economy, abortion and contraception, gay marriage, and immigration.

CommentInsight & Opinion

Why an Obama win would benefit the world

Joseph Stiglitz says which way Americans vote in the US presidential election matters greatly to the rest of the world - and a Romney victory would be bad news for most

PUBLISHED : Tuesday, 06 November, 2012, 12:00am
UPDATED : Tuesday, 06 November, 2012, 2:26am

Most people around the world will not be able to vote in the US presidential election, even though they have a great deal at stake in the result. Overwhelmingly, non-US citizens favour Barack Obama's re-election over a victory for his challenger, Mitt Romney. There are good reasons for this.

In terms of the economy, the effects of Romney's policies in creating a more unequal and divided society would not be directly felt abroad. But, in the past, for better and for worse, others have often followed America's example. Many governments quickly subscribed to Ronald Reagan's mantra of deregulated markets - policies that eventually brought about the worst global recession since the 1930s. Other countries that followed America's lead have experienced growing inequality - more money at the top, more poverty at the bottom, and a weaker middle class.

Romney's proposed contractionary policies - the attempt to reduce deficits prematurely, while the US economy is still frail - will almost surely weaken America's already anaemic growth, and, if the euro crisis worsens, it could bring on another recession. At that point, with US demand shrinking, the rest of the world would indeed feel the economic effects of a Romney presidency quite directly.

That raises the question of globalisation, which entails concerted action on many fronts by the international community. But what is required with regard to trade, finance, climate change and a host of other areas is not being done. Many people attribute these failures partly to an absence of American leadership. But, while Romney may summon bravado and strong rhetoric, other world leaders would be unlikely to follow him, owing to the belief (correct in my judgment) that he would take the US - and them - in the wrong direction.

American "exceptionalism" may sell well at home, but it does poorly abroad. President George W.Bush's Iraq war - arguably a violation of international law - showed that although America spends almost as much on defence as the rest of the world combined, it could not pacify a country with less than 10 per cent of its population and less than 1 per cent of its gross domestic product.

Moreover, it turned out that US-style capitalism was neither efficient nor stable. With most Americans' incomes stagnating for a decade and a half, it was clear that the US economic model was not delivering for most citizens, whatever official GDP data said. Indeed, the model blew up even before Bush left office. Together with the abuses of human rights under his administration, the recession - the predictable consequence of his economic policies - did as much to weaken America's soft power as the wars in Iraq and Afghanistan did to weaken the credibility of its military power.

In terms of values - namely, the values of Romney and his running mate, Paul Ryan - things are not much better. For example, every other advanced country recognises the right to accessible health care, and Obama's Affordable Care Act represents a significant step towards that goal. But Romney has criticised this effort, and has offered nothing in its place.

America now has the distinction of being among the advanced countries that afford the least equality of opportunity to their citizens. And Romney's drastic budget cutbacks, targeted at the poor and middle class, would further impede social mobility. At the same time, he would expand the military, spending more on weapons that do not work against enemies that do not exist, enriching defence contractors like Halliburton at the expense of desperately needed public investment in infrastructure and education.

While Bush is not on the ballot, Romney has not really distanced himself from the Bush administration's policies. On the contrary, his campaign has featured the same advisers, the same devotion to higher military spending, the same belief that tax cuts for the rich are the solution to every economic problem, and the same fuzzy budget maths.

Consider, for example, the three issues that are at the centre of the global agenda mentioned earlier: climate change, financial regulation and trade. Romney has been silent on the first, and many in his party are "climate deniers". The world cannot expect genuine leadership from Romney there.

As for financial regulation, while the recent crisis has highlighted the need for stricter rules, agreement on many issues has proved to be elusive, partly because the Obama administration is too close to the financial sector. With Romney, though, there would be no distance at all: metaphorically speaking, he is the financial sector.

One financial issue on which there is global agreement is the need to close down offshore bank havens, which exist mainly for purposes of tax evasion and avoidance, money laundering and corruption. Money does not go to the Cayman Islands because sunshine makes it grow faster; this money thrives on the absence of sunshine. But, with Romney unapologetic about his own use of Cayman banks, we are unlikely to see progress even in this area.

On trade, Romney promises to launch a trade war with China, and to declare it a currency manipulator on day one - a promise that gives him little wiggle room. He refuses to note the renminbi's large real appreciation in recent years, or acknowledge that, while changes in China's exchange rate may affect the bilateral trade deficit, what matters is America's multi- lateral trade deficit.

A stronger renminbi would simply mean a switch in the US from China to lower-cost producers of textiles, apparel and other goods. The irony - again lost on Romney - is that other countries are accusing the US of currency manipulation. After all, one of the main benefits of the Federal Reserve's policy of "quantitative easing" - perhaps the only channel with a significant effect on the real economy - derives from the depreciation of the US dollar.

The world has a lot riding on America's election. Unfortunately, most people who will be affected by it - almost the entire world - will have no influence on the outcome.

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University. Copyright: Project Syndicate

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This article is now closed to comments

Jaddy Baddy
Thirty Five Million Democrats, Independents and
disaffected Republicans just cast Fifty Six Million
votes to make Barack Obama the very first winner
of the Presidential Edition of American Idol.
When asked about his uh, stirring victory, POTUS
Obama said: "In America, we only count the votes,
Not the voters."
Vice POTUS Biden chimed in and said: "Hey,
democracy is overrated, anyway."
The American Idol generation thinks they have a
right to vote anywhere they want, anytime they want,
as many times as they want to, and Democrats,
and Chris Christie, agree.
rhj@stic-nftz.com
i do not agree with the article claiming Romney would be worse than current President, simply because the writer is saying it is the government who needs to rule, instead of individual's own efforts to prevail. remember no government is good, if you have any sense of individualism.
TigerJ
Actually no one around me seems to care who wins the US elections. The US will keep on patrolling the world like it owns it, while containing China obviously...
caractacus
Joseph Stiglitz has a broader view of the world than parochial, Republican dogma which, for the citizens of the USA and the world, only holds in store a future of greater inequality and social instability.
The current economic crisis has its origins in Thatcher / Reagan era deregulation and the neo conservative crazies (for 'neo' read 'extreme') who were Reagan's aides, later dominated the administration of "W", manufactured the causus belli for the Iraq War and handed gargantuan contracts without public tender to their favourite corporations (Halliburton, Carlisle, Bechtel) and dumped Joe Taxpayer with the bill.
Now, with typical hypocrisy and breathtaking audacity, the Republicans blame Obama for the financial crisis they created. What a pack of scoundrels.
pgrath1
No wonder Stiglitz had to go to all the way to HK to publish this rubbish.
It is the same threadbare cliches to which the Obama campaign has subjected Americans for the past year - class warfare, the need for more taxes, naughty "Wall Street Bankers" (who were Obama's biggest contributors in 2008) and finally, the leftist pseudo Keynesian nonsense that even MORE Gov't debt will eventually lead the USA into the promised land.
basicblue
Too bad this article could not have made it to the Headlines of all of the US Papers before Election Day.
Concise and to the point. Thank You.
 
 
 
 
 

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