The Obama Lessons

Nov 09, 2012 Editorial

On Monday, the day before the US presidential elections, we reviewed the reasons for the virtual dead heat between the two candidates in our editorial “Obama and Romney”. We pointed out: “With all of the foregoing factors against Romney, it should be obvious that he has only caught up with Obama because of the latter’s performance.” Obama’s major failures had been his inability to turn around the economy as he had promised in 2008. We concluded, however, “Our bet is still on Obama.”
Obama has won the elections and we would have won our bet, but the challenges that Obama had faced in his first term and could not overcome are all there in front of him as he sets out on his second and final term. The economy is still the elephant in the room, and he will not be getting a breather on this issue. Because of Obama’s inability or unwillingness to work with the Republicans that control Congress to reduce the country’s deficit, America’s credit rating was downgraded: something unthinkable even a decade ago.
Congress ultimately adopted a plan nobody liked – the so-called “fiscal cliff” of obligatory spending cuts and tax increases that kicks in Jan 1st, unless a compromise is struck. If for instance some Bush-era tax cuts are allowed to expire, this will result in an average tax increase of almost $2,000 for middle-class Americans. This is unacceptable to Obama, who wants the tax increases to be applied only on rich Americans earning over $250,000. Similarly, the estimated $109 billion worth of automatic budget cuts to defence spending, social services, education and other discretionary federal spending were resisted by Obama.
Since Congress will meet for only 16 days till the end of December, the compromise will have to be reached by both sides on raising the debt ceiling and reducing future deficits, while not increasing the persistent 8% unemployment rate or derailing the fragile economic recovery. This is a balancing act that should be a lesson to our politicians in Guyana. In the US system of government, the Congress has total control over spending, so unless a compromise is reached, the ratings agencies have already announced they will further downgrade the US sovereign debt.
In Guyana, while the power of the House of Assembly over spending is not as definitive as in the United States’ extreme separation of power and competencies, care will have to be taken that the Opposition do not throw out the baby with the bathwater in their insistence on ‘fiscal rectitude’. Programs vital for the life of the country and institutions, mandated by the constitution, cannot be starved out of existence. Compromise is vital in the US and in Guyana, and unless this is achieved, we will fall off a higher cliff than the US’s: the cliff of social stability.
President Obama has early on called for talks with Romney and the Republicans leadership on crafting a way forward. In Guyana, President Ramotar has also repeated his call for institutionalised Tripartite Talks – as he did a year ago when he won the Presidency. We hope that political parties have discovered that there is no substitute for dialogue in societies as fragmented as ours. Let no preconditions be set to these meetings.
Obama’s victory was built on his recognition of a new feature of the electorate: its growing diversity, occasioned by the increase in ‘minorities’ outstripping that of whites. Guyana has long known that it has a very diverse population. In the last couple of years, there is no longer any inbuilt majority of any one group. But some of our politicians insist on acting as if there is one, as they pander to the interest of one constituency or another. Apart from further polarising the country, it is very poor political strategy – as Romney and the Republicans discovered.
We are willing to bet that the Republicans will change their hard-line posture on immigration: they will have learnt they cannot alienate Hispanics with their rhetoric. Will our politicians show a similar mature willingness to adapt to our new realities?

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