The great recession which has started in 2008 with no clear sign of ending anytime soon has brought economy front and center of this year’s presidential campaign. In any presidential election, economy is usually the single most important issue and the state of the economy usually decides whether an incumbent gets re-elected or not. Bill Clinton’s first presidential campaign slogan “economy stupid” is frequently quoted as interesting and effective political slogan. That slogan emphasized the recession of that time and minimized father Bush’s foreign policy success. The come-back kid eked out a victory and the rest is, well, history.
2008 financial meltdown was a great boon for Obama’s presidential campaign in addition to his foreign policy, for instance, opposition to Iraq War. Economy as an issue of a presidential campaign can take many different forms and each presidential election picks up on the theme the public is most concerned about at the time. Teddy Roosevelt had trust busting and square deal. Herbert Hoover had efficiency and prosperity. There were New Deal, Fair Deal, and so on and on. At the moment, in any political conversation, we can’t escape hearing words like inequality, income gap, jobs, unemployment rate, unbridled free market system, financial regulation, redistribution of wealth, fairness, the importance of creativity and innovation, the wisdom of globalization, and controlled free market. Actually I can go on and on. Because each election cycle has its own character, aforementioned words symbolizes this year’s take on economy. This election cycle, the focus is on fairness and growth of the economy for everybody.
What makes things very interesting is that, in the U.S.A., economy is a very emotionally charged topic. It has become, almost, a hot button issue. The two opposing camps strongly believe in their own cause. It is the unbridled free-market capitalism vs. the equitable redistribution of wealth. I don’t think it is as hot as abortion as an issue where extreme activists actually murder abortion practitioners in the name of saving life, not born yet. But I do see very heated exchanges.
Throughout the U.S. history, there is a strong preferable sentiment toward free-market capitalism. From the very beginning, the European part of the U.S. history mostly has been the story of free market capitalism, maximum profit at any cost. During the gilded-age and roaring twenties, the U.S. was practically run by the free-market capitalists. I don’t think many people remember President Garfield over Carnegie, Rockefeller, and J.P. Morgan in the gilded-age or President Harding over Henry Ford and Al Capone. Al Capone, by the way, considered himself a successful and enterprising capitalist.
There is a caveat, which is, at the time, the free-market capitalism was what the American public was familiar with the most. President Coolidge’s campaign slogan, “The business of America is business.”, crystallizes the prevalent U.S. attitude on economy. In the name of efficiency and maximum profit, economic inequality was accepted by the majority of U.S. population. Even in the time of Occupy Wall Street Movement, Gallup poll last December found that 70% of the public wants the government to increase opportunity to get ahead over the government trying to reduce the income gap. While the rest of the world is already leaning toward redistribution, the U.S. being U.S., it is going to be a tough sell to claim redistributions is the answer in the election cycle of 2012
I.M.F. report, last year, by Andrew G. Berg and Jonathan D. Ostry claims that recent evidence shows that the equitable distribution of wealth is better at growing economy in the sustainable long-run than the polarization of wealth. The ultimate task of this year’s presidential campaign for President Obama is how to convince the public that narrow income gap among people works better in growing the pie bigger for everybody. Romney, the Republican, is claiming that free-market capitalism is the best system in the history of mankind. This election will settle a lot of dust and, most likely, show a more mature country.