Commentary by Pete du Pont
November 22, 2012
Source: Wall Street Journal
The election is behind us, with President Obama’s strong victory over Mitt Romney. Mr. Obama did not do as well this time, winning by 3.3 million votes compared with 9.5 million in 2008. But he overcame a weak economy and some unpopular policies to win a second term, and that is no small feat.
Still, one could argue his greatest challenge is in front of him, because America’s economy continues to do very poorly. Employment levels are still 3% lower than before the recession that began almost five years ago, meaning our socalled recovery of the last few years is far below other recoveries dating back through the 1950’s.
People of all income levels feel the impact of economic weakness. The number of people receiving food stamps has increased by 15 million, or almost 50%, in the past four years. The number of taxpayers earning $1 million or more per year was just below 400,000 in 2007 (having risen quite a bit from 170,000 in 2002), but it has plummeted and was only around 268,000 in 2010.
Things may get worse before they get better. Just a few days ago, the Congressional Budget Office predicted that the “fiscal cliff” we face in January, if the president and Congress don’t do something very soon, would push us back into recession and raise the unemployment rate above 9% by the end of next year.
There is much to be done in Washington. The White House and Congress must look beyond the immediate fiscal cliff and focus on economic growth for the longer term. One place to start is with corporate tax rates, an area where Mr. Obama has indicated shown some willingness to compromise with House Republicans.
The U.S. has the highest corporate tax rate in the developed world, around 14 percentage points above the average rate among major advanced economies. This is a limiting factor in job creation. In addition to tax reform, there must be spending control and some reduction in the massive levels of regulation we have seen in the last few years.
Unfortunately, what we may see over the next four years is the opposite, the continuing Europeanization of America, putting the government in charge of all that we do—from stricter management of the economy and family and health decisions, to higher taxes and higher government spending. If nothing is done soon, the higher taxes will take effect in weeks.
First, the end of the Bush tax cuts comes on Jan. 1, resulting in higher taxes on almost everyone. Second, because of ObamaCare, taxpayers making more than $200,000 ($250,000 for married couples) will pay an additional 3.8% on investment income, not a good move for job creation. And we see no inclination on the part of the White House to reduce federal spending or lessen the regulatory burden on our nation; in fact, we see just the opposite.
What happened in the recent election? Certainly some of the results were as expected. White men voted for Mr. Romney 62% to 35%, and white women voted 56% to 42%. Blacks suppported Mr. Obama 93% to 6%, and Latinos 71% to 27%. Voters earning less than $50,000 a year voted for Mr. Obama 60% to 38% while those with higher incomes voted for Romney 53% to 45%.
Democrats voted for Obama 92% to 7% and Republicans for Romney 93% to 6%. Mr. Romney, unlike John McCain, won with independents. But that was not enough to win in 2012 because the Democrats did a better job getting their vote out.
State ballot issues can also tell us a good bit about our nation. In California, Gov. Jerry Brown’s Prop 30, a $6 billion tax increase, won with 54% of the vote. In Florida, voters rejected a ballot item that would have limited spending increases to the rates of inflation plus population growth. Both were victories for public-sector unions and others who favor larger state government.
For the first time, advocates for same-sex marriage won at the ballot box. Maryland, Maine and Washington state all legalized it by referendum or initiative, and Minnesota voters rejected an amendment that would have written the traditional definition of marriage into the state constitution. That brings the number of states where gay couples can marry to nine. And, there was a big pot vote in some states. Measures allowing recreational pot use passed in Colorado and Washington state but failed in Oregon.
Looking back on America’s experience after World War II, the results of the recent election, and the challenges faced in Washington, it is obvious our country has become more liberal. Yes, we had Ronald Reagan, but we also had Franklin D. Roosevelt, Lyndon B. Johnson and Jimmy Carter. And now, we have Mr. Obama, the most liberal of them all, elected to a second term. The truth is that the American ship is headed across the ocean toward Europe, aiming to become more like France, Italy and Greece.
Those who worry about the Europeanization of America, and the related economic and social decline are right to be unsettled. Republicans and conservatives must spend some time learning lessons from the election and then do all they can to slow the ship, stop it, and change its course, or soon enough we will look like those countries do today.