If Obama Wins, Clinton Will Stay At His Side: Countdown Day 11
Presidents Barack Obama and Bill
Clinton are turning into the most watchable buddy-buddy road show since
"Starsky and Hutch." All they're missing are platform shoes and a
Gran Torino Next week they will travel together to Florida, Ohio and Virginia,
as Clinton tries to infuse his explanatory magic into Obama's campaign-trail
pitch in the final days of a grueling 2012 race.But as attention turns even
before Election Day to the dreaded "fiscal cliff" looming at year's
end, it's becoming clear that Clinton's sidekick duties will not be over on
November 6 if Obama wins.If the current president gets the chance to try to
fashion a post-election deal, he'll need Clinton's help in selling it to fellow
Democrats.White House staffers are already working overtime on the details of
various potential deals; corporate America is begging for demanding prompt
action to avoid massive tax increases and draconian "sequestered"
spending cuts on January 2.Administration officials argue that they will be in
a better position to make a deal with the post-election Congress than a Romney
proto-presidency would be.Obama long ago signaled willingness to take on his
own party by countenancing entitlement cuts. Romney and his running mate, Rep.
Paul Ryan (R-Wis.), are irrevocably committed to not raising income tax rates
on anyone, and not raising the overall tax burden.Since the essence of any deal
would be concession on both sides of the ledger, Romney's first act as president-elect
would require picking a tax fight with the Tea Party and perhaps
Ryan.Meanwhile, Obama's staff and advisers inside and outside the White House many
of them former staffers for Bill Clinton are looking at options. If their boss
wins, talks will begin immediately."I don't see Clinton sitting in on the
negotiations," said a source who is very close to both men. "Budget
talks are incredibly detailed and exhausting. You have to be totally immersed,
and the president has to take the lead. I don't see Clinton in that
process."But if we get a tentative agreement, I expect that the former
president will be asked to help sell it, and I am sure that he will," said
the source, who asked for anonymity to frankly discuss both men. "Nobody
could do it better."Clinton has done it before. In December 2010, Obama was forced to accept an
extension of the Bush-era tax cuts in exchange for a deal to extend
unemployment insurance, an extension of the payroll tax cut and other items on
the Democrats' agenda.As it happened, a meeting with Clinton was already on the
president's schedule that day. After the two met privately in the Oval Office,
Clinton suggested off-the-cuff that they both go to the briefing room, where
Clinton gave a ringing defense of the deal.A planned and elaborate version of
the same thing could happen this December, if the president is reelected and
can fashion a tentative agreement.Obama would need the help. He is not on good
terms with members of Congress in general even, if not especially, with members
of his own party, some of whom regard him as aloof to the point of
condescension. There are some key Democrats in the House with whom he has never
had a serious and extended conversation.The president has already indicated and
indicated again recently in his interview
with the Des Moines Register editorial board hat he is open
to a deal that would include substantial new cuts to entitlement programs, an
idea that is anathema to much of his party.Selling that part of the deal to
constituencies such as labor, the Congressional Black Caucus and teachers
groups, to name a few, would be Clinton's brief. As for family self-interest,
there would be plenty. Most economists and business experts think that a real,
substantive budget deal one that, for example, would save the $4 trillion
suggested by the Simpson-Bowles Plan would boost both the psychology and
reality of the American, and thus the global, economy.Four good years of
Democratic-led U.S. economic growth would set things up nicely for current
Secretary of State Hillary Rodham Clinton in 2016.There's never been a TV show
like it, but "The Good Husband" might sell.
Powell endorsed Obama
An outspoken surrogate
for Mitt Romney's White House campaign suggested late on Thursday that race was
a factor in former secretary of state Colin Powell's endorsement of President
Barack Obama.Former New Hampshire governor John Sununu told CNN that the
re-endorsement of Obama by Powell - a Republican who served in both Bush
presidencies but backed Obama in 2008 - was possibly due to both men being
African-Americans."Frankly, when you take a look at Colin Powell you have
to wonder whether that's an endorsement based on issues or whether he's got a
slightly different reason for preferring President Obama," Sununu told CNN
host Piers Morgan."When you have somebody of your own race that you're
proud of being president of the United States, I applaud Colin for standing with him."The remarks by Sununu, a
prominent and often flamboyant supporter of Romney, could inject race into a
campaign the Republican challenger has tried to keep focused on the sluggish US
economy.The remarks came just two days after Republican Senate candidate
Richard Mourdock, explaining his anti-abortion stance, sparked controversy by
saying that pregnancies caused by rape are "something God intended to
happen".Distracting from
Republican argumentThose remarks threatened to slow Romney's progress in
winning over vital women voters in key swing states and gave Obama an opening
to brand Republicans as extremists when it comes to women's rights.Sununu's
remarks could prove less damaging as Obama already enjoys overwhelming support among
African-American voters but may further distract from Republicans' central
argument against the president's economic policies.The two presidential
candidates are locked in a virtual tie less than two weeks ahead of the 6
November election, with Romney enjoying a slight lead in national polls but
Obama holding a narrow edge in vital battleground states.Powell, who served as
chairperson of the Joint Chiefs of Staff under President George H W Bush and
secretary of state under President George W Bush, is a moderate Republican once
seen as a promising presidential prospect.In his re-endorsement of Obama on
Thursday, Powell credited the president with recent improvements in the economy
and praised him as a steely commander-in-chief who had wound down the wars in
Iraq and Afghanistan.
US consumers boost economic growth
US economic growth picked up in the
third quarter as a late burst in consumer spending offset the first cutbacks in
investment in more than a year by cautious businesses.The stronger pace of
expansion, however, fell short of what is needed to make much of a dent in
unemployment, and offers little cheer for the White House ahead of the closely
contested November 6 presidential election.Gross domestic product expanded at a
2% annual rate, the Commerce Department said on Friday, accelerating from the
second quarter's 1.3% pace. A pace in excess of 2.5% is needed over several
quarters to make substantial headway cutting the jobless rate.Economists polled
by Reuters had expected a 1.9% growth pace in the third quarter. The report
comes a little more than a week before the election in which President Barack
Obama is trying to fend off Republican challenger Mitt Romney.Since climbing
out of the 2007-09 recession, the economy has faced a series of headwinds from
high gasoline prices to the debt turmoil in Europe and, lately, fears of US
government austerity. It has struggled to exceed a 2% growth pace and remains
about 4.5 million jobs short of where it stood when the downturn started.
Consumers, however, largely shrugged off the impending sharp cuts in government
spending and higher taxes, which are due at the start of the year absent
congressional action. Indeed, they went on a bit of a shopping spree as the
quarter wound down, buying a range of goods - including automobiles and Apple's
iPhone 5.Consumer spending, which accounts for about 70% of US economic
activity, grew at a 2% rate after increasing 1.5% in the prior period.Spending despite income squeezeHigh
stock prices and firming house values have made households a bit more willing
to take on new debt, supporting consumer spending. However, incomes were
squeezed in the last quarter, causing households to save less to fund their
purchases.The amount of income available to households after accounting for
inflation and taxes rose at a tepid 0.8% rate in the third quarter, slowing for
a brisk 3.1% pace the prior period. The saving rate slowed to a 3.7% rate after
increasing 4% in the second quarter.The faster pace of spending was achieved
despite a spike in inflation pressures as gasoline prices rose. A price index
for personal spending rose at a 1.8% rate, accelerating from the second
quarter's 0.7% pace. But a core inflation measure that strips out food and
energy costs slowed to a 1.3% rate after rising 1.7% in the prior quarter,
suggesting the increase in overall price pressures will be temporary. With
about 23 million Americans either out of work or underemployed, there are fears
the current pace of spending will not be sustained, especially if gasoline
prices maintain their recent upward march and families get a higher tax bill in
2013.The automatic tax hikes and government spending cuts, known as the
"fiscal cliff," will drain about $600bn out of the economy next year
absent congressional action.Fiscal cliff fears have already hammered business
spending, which dropped at a 1.3% pace in the third quarter, falling for the
first time since the first three months of 2011.Part of the drag in business
investment, which had been a source of strength for the economy, came from
equipment and software, where outlays were the weakest since the second quarter
of 2009.Spending on nonresidential structures contracted after five straight
quarters of growth.In contrast, home building surged at a 14.4% rate, thanks in
large part to the Federal Reserve's ultra accommodative monetary policy stance,
which has driven mortgage rates to record lows.Inventories were a drag on
growth because of a drought in the country's Midwest, which has decimated
crops. Farm inventories cut 0.42 percentage point from GDP growth. In addition,
slowing global demand, particularly weakness in Europe and China, caused US exports to
contract for the first time since the first quarter of 2009. That left a trade
deficit that weighed on GDP growth.But there was surprisingly good news on
government spending, which snapped eight straight quarters of declines on a
strong rebound in defense outlays.
China: $4 Trillion in Dirty Money Should Worry Us All
Global Financial Integrity's new report on illicit financial
flows from China showed some of the
worst numbers that we've ever estimated. Crime, corruption, and tax evasion
cost the world's largest country and second-largest economy $3.79 trillion from
2000-2011. To make matters even darker, illicit capital flight is intensifying.
In 2011 alone, China lost over $600 billion more than any other single country lost over a
ten year period when Global Financial Integrity estimated illicit financial flows from
2000-2009.At first glance, these numbers are
so big that it can be difficult to wrap your head around them. Even for a country
the size of China, $3.79 trillion is a lot of money. What does this look like in the
concrete example? A story in The New York
Times this morning reported that
close family members of Wen Jiabao, the outgoing Premier of China, have accumulated
$2.7 billion in wealth much of it housed offshore. His immediate family was
awarded tremendous amounts of money in government contracts. This comes not
long after The Wall
Street Journal exposed that the wife of Bo Xilai,
a rising star governor who was on the verge of being promoted to China's
powerful Politburo, was responsible for the murder of a British citizen
who helped her family smuggle as much as $1 billion to offshore tax havens and
secrecy jurisdictions.Illicit financial flows on a massive scale as captured in
the GFI study are how these corrupt billionaires hoard their money. Global
Financial Integrity's new report found that in 2010 alone, $213.7 billion of
foreign direct investment flowing into China was officially
reported to come from the British Virgin
Islands population 28,000. This is likely
the result of round tripping where Chinese elites launder money through secrecy
jurisdictions and back into China in order to disguise
its source and is what you would expect wealthy Chinese elites to do if their
wealth was earned illegally. However, massive amounts of money are indeed
leaving China and not returning. Our report found that of the $2.83 trillion that
flowed out of China since 2005, almost $600 billion wound up as deposits or liquid assets
in tax havens.This has tremendous implications for the Chinese economy. Our
report found that illicit financial flows are increasingly driving inequality
in China, and may reflect recent concerns about Chinese elites wishing to leave
the country. At some point, something has to give. Crime, corruption, and tax
evasion will threaten China's economy, and as a
result, the global economy if this trend continues. In the words of our
Lead Economist, Dev Kar, "[China's] social, political,
and economic order is not sustainable in the long-run given such massive
illicit outflows."China has seen massive,
world-changing, economic growth over the past three decades. However,
corruption is undermining much of this growth. The infrastructure that China is building right now
should drive growth, and therefore raise living standards for the Chinese
people for a century to come. However, many of the brand new bridges, roads,
and modern buildings in China have been
plagued by shoddy quality and massive amounts of
corruption. Our research suggests that much of this money is flowing out of
China.I spent most of my professional life as an entrepreneur in Nigeria, and lived there for 15 years. Despite massive oil wealth and a
vibrant, young population, 45% of the population lives below the poverty line.
Per-capita GDP has barely risen since I first set foot there in the 1960s. I
know far too many people living worse off today than they did decades ago. This
is not because the Nigerian economy lacks promise it has huge oil exports, and
the country is filled with good, ambitious,entrepreneurial people but
because crime, corruption, and tax evasion have torn the country apart.When
China is growing at close to 10% every year, China's median citizen sees their
life improving despite endemic corruption and illicit outflows. However, there
are serious questions for the political and social stability of China's economy if growth
slows. Will the median citizen continue to tolerate obvious and tragic
corruption on the scale that we are seeing when more modest growth is not
improving their living standards? When we say that illicit flows drive
inequality, it is because money moved illegally out of the economy hurts your
average person. That money can't be spent on schools, infrastructure or basic
services. To make matters worse, our prior research finds that illicit flows drive underground economies, resulting in
more organized crime, smuggling, and other factors that undermine the Chinese
economy.A recent Pew
poll suggests the average citizen may be getting
restless. The study released last week found that roughly half of the
Chinese public now see corruption and inequality as "very big
problems" in their country, a significant spike from 2008 when the poll
was last conducted.Still, the world needs to do something about this. Potential
political unrest in China affects us all. We
make it far too easy for wealthy elites all over the world to stash their money
in tax havens, including the United States. The world cannot afford to let China collapse into a pit
of corruption and civil unrest. The result would be a disaster.
