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31 August 2012, Gateway House

A crucial choice: Romney or Obama?

Partly due to support from undecided voters, women and African Americans, incumbent U.S. President Barack Obama seems to be ahead in the polls. However, much will rest on which candidate can win over the country’s middle class. Whatever the result, it will have repercussions on markets and deregulation.

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Glitzy political conventions and their choreographed messages may try to be all things to all people, but this American presidential race boils down to one broad question – who will better protect the struggling middle class and its interests – Barack Obama or Mitt Romney?

An overwhelming 90% of Americans count themselves as middle class, even those with incomes above $200,000; so whoever owns their allegiance will be the winner. No surprise that both candidates are trying hard to convince the average American of their dedication to “saving” the middle class.

The middle class can only be saved with a strong economy and steady job growth – a no-brainer. But how to fix the economy and which buttons to push for maximum benefit for the maximum number of people, is what divides the Democrats and Republicans. Should the wealthy pay their fair share in taxes or should the government keep trimming social programmes to raise revenue?

The choices are stark and the landscape polarized. Current figures from the U.S. Federal Reserve show the median family’s assets at $77,300 while the assets of the top 10% of families stand at $1.2 million. Cutting through the myths of “success and hard work” as the only factors behind the riches of the rich, the income gap has sobered even the most fundamentalist of free market advocates.

Economist Joseph Stiglitz, a Nobel laureate, lays bare this American dilemma in his latest book “The Price of Inequality” which has lessons for leaders of all nations, not just the United States. He argues that if the U.S. continues down its current economic path and inequality grows, it will soon become unsustainable. It is not only a question of fairness; it’s a question of survival.

Stiglitz says inequality affects worker efficiency and ultimately turns people away from government because it undermines their faith in the rule of law. When workers see the CEOs getting bonuses while their salaries go down, they become inefficient because they can see the system overvalues the bosses. Example by example, he shows how America may be writing the epitaph of its dream. Stiglitz, Paul Krugman and Raghuram Rajan are a group of economists who are trying to argue in favour of freeing capitalism from the clutches of the few and inject some morality back into the system – not for morality’s sake but for the sake of the system’s survival.

The Occupy Wall Street movement may have petered off but it did engender a debate around these once untouchable ideas. It brought in terms such as “fairness” and “inequality” into the mainstream without too much negative baggage.

Obama, ever the good listener, took note and quietly seized the moral high ground, wrapping all his campaign speeches in the rhetoric of the middle class, the working poor, the burdened student, the laid-off, the single mom and every other group of struggling American.

Romney has belatedly tried to join the debate but it might be hard to shed the image of privilege especially with the Obama campaign relentlessly focusing on his wealth.

It will be a consequential election with possible repercussions on the role of markets, deregulation and fairness. Polls show the incumbent and the challenger in a dead heat, with a small advantage for Obama. Depending on how the question is asked, most voters trust Romney to fix the economy but they also think he would favour the wealthy. His considerable personal fortune (estimated at around $200 million) and his refusal to reveal tax returns for the past ten years as is customary for presidential candidates has raised suspicions.

Obama on the other hand, has introduced the “Buffet rule” which says those making more than $1 million should pay 30% in taxes. And his administration has several Wall Street chieftains in prominent positions, even in the U.S. State Department.

A CBS poll released on Tuesday showed the gap – only 41% of the registered voters interviewed felt Romney understood their problems while 54% thought Obama did. It is being called the “empathy gap.” But Obama had only a one-point lead over Romney’s 45% when asked which candidate the voters were leaning towards.

But when you add the gender gap for the Republican Party to the question of fairness, Romney has an uphill task. The same poll showed Obama with a 10-point lead among women voters while Romney had a nine-point advantage among men.

The Republican Party has only itself to blame for the distance between itself and women. The party’s increasingly hard stance on abortion has alienated women en masse. The bizarre declaration this month by one of its senate candidates, Todd Akin, that women should be denied the option of abortion even in cases of rape because “if it’s a legitimate rape, the female body has ways to try to shut that whole thing down,” sent shivers down the collective female spine.

Romney distanced himself immediately from the remark and asked Akin to step down but the Missouri Republican refused, riding high on the strength of Christian conservatives in his state.

Apart from women, the Republicans also have a tough time with African American voters. Currently, the support among black voters for Romney is zero percent. Yes, the community remains loyal to Obama even though many African American activists say the president has done nothing special for the community. But when faced with the choice, they find Obama more sympathetic to the underprivileged.

If I were a betting person, I would say Obama will scrape through for another term aided in part by the undecided voters, women and African Americans. If he can energize the young once again, he will substantially improve his chances.

Seema Sirohi, an international journalist and analyst, is a frequent contributor to Gateway House: Indian Council on Global Relations.

This article is part of the series of analyses by the author on the U.S. presidential elections, 2012.

This article was exclusively written for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.

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