Nostalgia on the campaign trail

Obama practices a cheap populism. He seems to presume that the complexities of the ACA and his repeated attacks on business (on oil companies, insurance companies, banks, hedge funds, private-equity funds and “the rich” in general) have no effect on the climate for investment or job creation. This is dubious. His distributionalism has consequences. True, Obama inherited a dismal economy and massive job loss; but the fact that the recovery has weakened while unemployment remains high cannot be divorced from the mistrust he’s engendered in the business community.

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As for Romney, his emphasis on higher economic growth, though desirable, is no panacea. Even were he to succeed, growth rates almost certainly won’t regain previous levels for a simple reason: an aging society. There will be more retirees, fewer new workers. Romney can’t change that. And even faster economic growth will leave massive budget deficits, which reflect a vast gap — also driven by aging and high health costs — between future spending commitments and taxes. Tax rates can be cut; but any revenue loss would need to be offset by ending tax breaks.

The media campaigns that Obama and Romney are waging against each other are politically unsurprising. Victory awaits the side that can convince the most uncommitted voters that the other guy is a louse. The nostalgic lapse of Democrats into social protectors and Republicans into tax cutters is equally understandable. The roles are familiar and satisfying. The trouble is that they’ve been overtaken by reality. Yesterday’s stereotypes won’t solve today’s problems.

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