John Cassidy's Blog, page 89

The Billionaire’s Club: A Team Romney Conference Call

According to a report in today’s Times, the Romney campaign organized back-to-back conference calls yesterday with big Republican donors to reassure them about the progress of the campaign. The story didn’t contain any details of what was said in the conversations, which involved four of the Mittster’s top advisors. Fortunately, I had a top-secret spy who reported back what was said on one of the calls. (No, it wasn’t Jimmy Carter’s grandson: he was too busy meeting with angel investors for his new online negative-research firm, Carterdirt.com.) Here’s the highly confidential (and highly invented) transcript:

ROMNEY GENIUS 1: “Good afternoon gentlemen, and thanks a lot for taking some time out of your busy schedules to take our call. Obviously, there’s been a lot of publicity about the release of the secretly recorded videotape, which was unfortunate. We wanted to let you all know how we are reacting to that—our feeling is that we can actually turn it to our advantage—and to fill you in a bit on the bigger picture, which is actually pretty positive.”

ROMNEY GENIUS 2: “Yeah, I don’t know if you saw it fellas, but today’s Gallup tracker has the race virtually tied: Obama forty-seven, Romney forty-six. A week ago, Obama was ahead by seven points. Now the national race is back to almost level—Rasmussen actually shows us leading by two points—which is where we always expected to be at this point. Obama’s convention bounce has disappeared, and it looks like Mitt’s comments on the protests in Libya and Egypt, which most of the press panned, did us a bit of good. In the latest CBS News/New York Times poll, Obama’s rating on foreign policy was down five points.”

ROMNEY GENIUS 3: “Obviously, there’s been a lot of noise about the video. We’ve got a new ad going up later today that shows Obama coming out in favor of redistribution. We think that’s an issue that plays well for us. However, it’s important not to get too caught up in the day-to-day stuff. The basic dynamics of the race are the same as they’ve been all year. It’s a close race nationally, and it’s going to come down to the swing states, where, with your help, we are in the process of rolling out an unprecedented ad blitz. As we’ve said all along, the electoral-college map is challenging for any G.O.P. candidate, but we still have some very plausible routes to two hundred and seventy votes. We’re comfortably ahead in North Carolina and New Hampshire. Florida appears to be turning our way, just as we predicted it would, and in Virginia, Wisconsin, Colorado, and Nevada, it’s very close. Ohio is tightening up….

(Loud splutter in the background.)

BILLIONAIRE 1: “Hang on a minute, guys. Let me get this straight. Last week, I wrote a check for five million dollars to one of your Super PACs, and this week the candidate goes out and says half of the voters are deadbeat dependents and it’s not his job to worry about them. You talk about the polls. Well, I look at them, too. Pennsylvania’s gone. Michigan’s gone, Ohio’s almost gone. Sure, the national numbers are a bit better, but most of them still show Obama leading by four or five points. The Times survey you mentioned said Mitt’s even lost his advantage on the economy and jobs. What the heck is he running for if he can’t win on that one? My grandson, who’s dating an Obama supporter at U.C.L.A., says they are already planning a big victory party. This is turning into a goddamn disaster story.”

BILLIONAIRE 2: “Chuck’s right, fellas. I wouldn’t use his language, but let’s put it like this. If my investment in Romney 2012 was a private-equity play, I’d be thinking of shutting down the business and cutting my losses. Where’s the upside? He’s been behind in most of the polls all year, and I don’t see how he’s going to turn it around. Why shouldn’t I take some of my money and send it to other races I care about, and where it might really help, such as Tommy Thompson in Wisconsin and Scott Brown in Massachusetts? I’ll be damned if I’ll see that Warren woman in the Senate. And just as a hedge, I might even send a few bucks to Chuck Schumer. Sure, he’s a Democrat, but at least he recognizes the importance of Wall Street.”

(Short silence on the line.)

ROMNEY GENIUS 4: “O.K., gentlemen, I feel your pain, truly I do. It’s been a tough few days. At least you haven’t had to read stories, like I have, that quoted Republicans describing you as having the wisdom of a goat and the brains of a donkey…”

(Laughs and guffaws all round.)

ROMNEY GENIUS 4: “The important thing is that we stick together and don’t panic. All campaigns have their ups and downs. And as my colleagues said, the fact is we still have a decent shot at winning. Apart from attacking us, the other team really hasn’t got anything to say. On the really big issues—how to create jobs, the size and scope of government, maintaining a strong military—Obama’s on the wrong side of the debate. They’ve just done an effective job of diverting the debate and turning Mitt into this big, bad bogeyman. And, frankly, we’ve helped them out with some mistakes on our side.”

BILLIONAIRE 1: “That’s for darn sure. What sort of cretin goes into a Presidential campaign without straightening out his tax returns? And now he’s insulting seniors who don’t pay any income tax. I’d do a better job myself, and I’m one of the most loathed figures in America—at least that’s what my P.R. woman tells me, bless her cotton socks.”

BILLIONAIRE 3: “Calm down, Chuck. The tape was from a nickel-and-dime fund-raiser back in May. Mitt was just trying to gee up all those Florida auto dealers and Tea Party types. He never thought it would come out. But lets’s cut to the chase. You guys say you can still win the election. How are you going to do it? What’s the game plan from here on in?”

ROMNEY GENIUS 1: “Well, as we said, we’ve got this new Obama ad, and Mitt’s out there on television, and on the op-ed pages, making the big-government-versus-small-government argument, which plays well for us, especially in places like Florida and Colorado. Since we can’t turn the clock back, we’re looking on this as another chance to fire up the base, which we need to boost turnout. Then we’ll pivot back to the center, and try to close the remaining gap in the national polls. If we do that, the state polls will eventually come around.”

ROMNEY GENIUS 2: “That’s where the debates come in. If you’ve been wondering why you haven’t seen very much of Mitt in the past couple of weeks, it’s because he’s been holing up with Rob Portman and the rest of the team to do debate prep. We’re looking on it as Ali-Frazier I. Obama’s the more stylish fighter, but Mitt’s got a deadly left hook. Look what he did to Newt in Jacksonville. And for once, the low expectations for Mitt will play out in our favor. Even if he doesn’t knock out Obama, he’ll do a lot better than most people expect, which will give him a lift.”

ROMNEY GENIUS 1: “It’s a top-down strategy. Mitt takes down Obama on the national stage, and, meanwhile, we hit him hard in the states with negative ads produced by us and by the Super PACs. Plus, we’ll be working on our ground game, making calls to our voters, arranging transport to the polls, and so on. We’re also working with Judicial Watch and other voter-monitoring groups to make life difficult for the other side. But it starts at the top. As you’ve seen in the last few days, we’ve repositioned our messaging slightly to reflect the fact that most people think the economy’s getting a bit better. We’re bringing up other subjects, such as foreign policy and the debt, arguing that we can do better in lots of areas. Of course, the economy’s still key. Unfortunately, we can no longer rely on it for victory.”

BILLIONAIRE 3: “I blame Ben Bernanke. That man’s a traitor to the Republican Party. Flooding the markets with cheap money, firing up the Dow, and making people feel richer. When I saw my investment portfolio had gone up another five hundred million dollars, I knew it was bad news for Mitt.”

BILLIONAIRE 4: “And what about the Saudis? Talking about pumping more oil to keep down the price of gasoline in the runup to the election. Don’t they know Obama and Clinton would sell them out in a minute if the Arab mobs reached Riyadh?”

ROMNEY GENIUS 4: “O.K. fellas, we’re getting a bit off topic. Let’s get back to the business at hand. We need to figure out how we can all be most useful to the campaign. It’s the future of America we are talking about, and you are all great patriots. The fourth quarter has just begun. Let’s get at it!”

(A few half-hearted cheers are heard.)

BILLIONAIRE 5: “One question: Who do I make the check out to?”

See our full coverage of the campaign season at The Political Scene.

Illustration by Tom Bachtell.

Romney’s Flawed Lesson in Political Economy

Say what you like about Mitt Romney—I’ve already said a lot—but he rarely fails to come through when his opponents need him. If Jimmy Carter’s grandson, the would-be opposition researcher who evidently helped to dig up the offending video, had written the script himself he could hardly have come up with something more damaging than the videos secretly taped at a Boca Raton fundraiser this spring and published by Mother Jones on Monday. What sort of candidate, speaking in a quasi-public setting—there are potential leakers lurking in all fundraisers—would say almost half of the voters in the election “are dependent on the government,” that they “believe that they are victims,” and then go on to say, “my job is not to worry about these people. I’ll never convince them they should take personal responsibility and care for their lives”?

The answer proffered by my colleague Amy Davidson and numerous other commentators: a heartless plutocrat who holds the impoverished and the working poor in contempt. Sounding for all the world like Josiah Bounderby, the sneering mill owner in Dickens’s “Hard Times,” Romney went on to say, “I have inherited nothing. Everything that Ann and I have, we earned the old-fashioned way.” Bounderby, it turned out, had exaggerated his humble origins, and so, of course, has Romney—not that anybody could possibly believe him. When your father was the C.E.O. of a big auto company and the governor of Michigan, and you were educated at the three-hundred-acre campus of the Cranbrook School, posing as Horatio Alger is plain silly.

But, then, Romney is a profoundly silly candidate. Even when he has the germ of a serious point to make, he tends to express it in such a garbled, exaggerated, offensive, and ill-thought-out manner that he gets himself into a world of trouble. It happened in London, where his comments about the preparations for the Olympics turned him into a hated figure. It happened in Israel, where, in ruminating on the relationship between culture and economic growth, he insulted the entire Palestinian people. It happened again last week, when Romney’s grandstanding on the protests in the Middle East backfired. And it happened on the video, where he veered from a legitimate discussion about the political economy of tax policy into an Ayn Rand-style rant about the fecklessness and dependency of many, many, many Americans.

The germ of a serious point Romney had to make is this: in a world in which large numbers of poor and working-class voters don’t pay income tax, the standard Republican prescription of across-the-board cuts in income-tax rates—a prescription Romney has adopted wholesale—may no longer have the potency it once did. Over the past twenty years, governments of both parties have adopted policies that raised the income threshold at which households start paying income tax. Thanks to the child tax credit (enacted by Gerald Ford and expanded by George W. Bush) and the Earned Income Tax Credit (also enacted by Ford and expanded significantly by George H. W. Bush), a typical family of four can now make about forty-five thousand dollars a year before being subject to income tax. In New York, Los Angeles, and Washington, an annual income of forty-five thousand dollars isn’t much, but on a national basis it isn’t much below the median household income, which in 2011 was about fifty thousand dollars.

There are all sorts of qualifications that Romney should have mentioned before heaping forty-seven per cent of the population into the pile marked “dependency culture” and dismissing them. Firstly, although these people don’t pay income tax, they do pay other sorts of taxes: payroll taxes, excise taxes, and state and local taxes. According to calculations by the Congressional Budget Office based on the 2007 tax year, households in the poorest fifth of the income distribution pay about four per cent of their income to the federal government, and households in the second quintile pay about eleven per cent. These are effective tax rates, which account for taxes and benefits of all kinds levied and distributed by the federal government. The rates for households in the the middle quintile, the fourth quintile, and the top quintile are as follows: 14.3 per cent, 17.4 per cent, 25.1 per cent. The federal government takes more from the rich than the poor, on average, but Romney shouldn’t have any problem with that. Faced with charges that he intends to give a big tax cut to the wealthy, he’s repeatedly said that he intends to preserve a progressive tax system.

And Romney should have considered the elderly. According to a 2011 study by the non-partisan Tax Policy Center, about a quarter of the households that don’t pay any income tax are made up of retired or semi-retired folks, who benefit from expanded personal deductions and the exclusion of some Social Security payments from taxable income. Since most of these people paid higher taxes throughout their working lives, it hardly seems fair to classify them as tax-avoiding dependents. (Romney also didn’t mention that many of these retirees vote Republican.)

Setting aside the elderly, those who don't pay income tax consist largely of two groups: households in poverty, many of them single-parent families; and working families who earn incomes that are above the official poverty line but not high enough for them to build a decent life without getting some additional help—or so politicians from both parties have decided. To suggest, as Romney did, that these hard-working families “believe that they are victims … believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it,” isn’t just insulting: it is grossly inaccurate.

Many educated people have little idea about the level of wages in this country. According to the Employment Policy Institute, more than half of all jobs pay less than thirty-four thousand dollars a year. A quarter of jobs pay less than twenty-three thousand dollars—the official poverty line for a family of four. The child tax credit and the earned-income tax credit were both designed to reward low-paying work rather than inactivity—that is why they attracted Republican support. They operate like a negative income tax—an idea Milton Friedman, yes that Milton Friedman, originally proposed—which tops up the incomes of the working poor and the working near-poor.

Either Romney was embellishing, and pandering to his potential donors, or he didn’t know what he was talking about. Still, the basic political point he was trying to make is true. Proportionately speaking, fewer Americans pay income tax than used to be the case. For a party that, since Ronald Reagan, has largely built its success on slashing income-tax rates, this is an important development—as is the fact, which the Wall Street Journal reported on earlier this year, that almost one-in-two (forty-nine per cent) of Americans live in households where somebody is receiving some type of government benefit. In conservative circles, these facts are widely discussed, and the smarter Republicans are aware of the challenges they present.

Romney, in his more considered moments, is capable of framing the issues in a less inflammatory manner. At a press conference on Monday night, after the video had emerged, he attempted to explain what he had meant to say when somebody at the Florida fundraiser asked him how he intended to garner enough votes to defeat Obama:

[I]t’s by focussing on those folks that are neither in his camp nor in my camp. Of course there’s a very different approach of the two different campaigns … I recognize that among those that pay no tax, approximately forty-seven per cent of Americans, I’m not likely to be highly successful with the message of lowering taxes. That’s not as attractive to those who don’t pay income taxes as it is to those who do. And likewise those who are reliant on government are not as attracted to my message of slimming down the size of government. And so I then focus on those individuals who I believe are most likely to be able to be pulled into my camp and help me win the 51 or 50.1 per cent that I need to become the next President.

That’s better than calling people “victims” and dependents. Actually, though, Romney goofed on this occasion, too, once again mistakenly giving the impression that almost half of all households don’t pay any tax. Evidently, what he meant to say in the third sentence of his remarks was this: “I recognize that among those that pay no (income) tax, approximately forty-seven per cent of Americans, I’m not likely to be highly successful with the message of lowering (income) taxes.” But instead of saying that, Romney twice left out the word “income,” which I’ve taken the liberty of adding for him. Yes, he partially corrected himself in the next sentence, when he did use the term “income taxes,” but that’s hardly good enough. The entire point of his press conference was to clarify things.

It turns out that clarity isn’t the Mittster’s strong suit. And that’s putting it kindly.

Photograph by Nicholas Kamm/AFP/Getty Images.

How Bad Is It for Romney? You Decide

This being the Jewish New Year, a time for reflection, I’m going to heed the calls of some of our more conservative readers and refrain from passing another negative judgment on my old pal Mitt Romney. Instead, I’ll merely pass along ten headlines from the weekend. Once you’ve read and digested them, there’s a little multiple-choice test.

1. “POLL FINDS OBAMA IS ERASING ROMNEY’S EDGE ON ECONOMY” (New York Times, 9/14). From the beginning, the best thing Romney has had going for him is a widespread perception that he would do a better job than President Obama in handling the economy and creating jobs. As recently as July, a CBS News/New York Times poll showed him with an eight-percentage-point lead on this key issue, which has now been erased. According to the latest CBS/Times survey, fifty per cent of respondents said that Obama would do a better job handling the economy, and just forty-four per cent said Romney. Among “likely voters,” Obama’s lead was smaller—one point rather than six—but still.

2. “ROMNEY AT RISK OF LOSING EDGE ON DEFICIT” (Washington Post, 9/16). In most polls, the budget is just about the only other issue where Romney has held an advantage. In an April ABC News/Washington Post poll, for example, he held a whopping lead of seventeen percentage points—fifty-four to thirty-seven—on the question of who would handle the deficit better. But in the most recent ABC/Post poll, that lead has narrowed to just three points. Other polls show a similar trend.

3. “ROMNEY’S TAX PLAN FAILS TO GAIN A FOOTHOLD” (Wall Street Journal, 9/16). The subhead on this story, which cited a number of recent polls showing Obama leading Romney on the question of who has the best tax policy, was “Conservatives Worry GOP Nominee is Losing Messaging Battle to Obama on an Issue They Say Should Favor Republicans.” Several prominent Republicans said that Romney had failed to explain how his policy of cutting income-tax rates across the board and eliminating some tax shelters would benefit ordinary Americans and help stimulate economic growth. “I think there’s an educational effort that needs to be made with the public,” Douglas Holtz-Eakin, who advised John McCain in 2008, said. “I don’t think sufficient effort has been made on that front.”

4. “POLL: OBAMA LENGTHENS LEAD IN PA” (Philadelphia Inquirer, 9/15). A few months ago, Republican strategists were saying that Pennsylvania would be a competitive state. In May, Karl Rove said that it was “in play.” Now, according to a new poll from the Inquirer, Obama is leading Romney in Pennsylvania by eleven points, which is the same margin by which he won the state in 2008. Romney’s unfavorability rating in the latest poll is forty-nine per cent, and his favorability rating is forty-four per cent. The new survey comes a few days after reports that the Romney campaign was scaling back its activities in Pennsylvania and Michigan, another swing state where Obama has a consistent lead in the polls.

5. “POLL: OBAMA KEEPS 5-POINT LEAD IN VA. AFTER CONVENTION” (Washington Times, 9/17). Even as Romney’s hopes of victory in states like Michigan and Pennsylvania have receded, G.O.P. strategists have focussed on Virginia as an Obama-leaning state where the Republican candidate could score a surprise win. The latest poll, which was carried out by Public Policy Polling, shows little evidence of a Romney surge in the Old Dominion. “Barack Obama continues to look like the definite favorite in Virginia,” Dean Debnam, president of P.P.P., said in a news release. “And it’s hard to imagine a scenario where Obama would win Virginia but lose the election.” P.P.P.’s surveys are sometimes criticized for leaning Democrat. But two other polls last week—from NBC News/Wall Street Journal/Marist College and from Rasmussen—also showed Obama ahead in Virginia.

6. “ELIZABETH WARREN LEADS SEN. SCOTT BROWN IN TWO NEW POLLS IN U.S. SENATE RACE” (Boston Globe, 9/16). Having consistently trailed Brown, who came to office in a special 2010 election to replace Ted Kennedy, Warren, the liberal Harvard professor and scourge of Wall Street, appears to have taken the lead following her tub-thumping speech at the Democratic National Convention. One poll, from the Western New England University polling center, shows Brown trailing by six points. The other survey, from P.P.P., shows Warren having gained seven points in a month, and now leading by two.

7. “INSIDE THE CAMPAIGN: HOW MITT ROMNEY STUMBLED” (Politico, 9/16). In most losing campaigns, the recriminations start after Election Day. Team Romney appears to be getting an early start. In an article that became the talk of the campaign as soon as it was posted, on Sunday evening, Politico’s Mike Allen and Jim VandeHei detailed internal grousings about Stuart Stevens, Romney’s top campaign strategist, including suggestions that he was responsible for the candidate failing to mention Afghanistan in his convention speech and for allowing Clint Eastwood to berate an empty chair:

Romney’s convention stumbles have provoked weeks of public griping and internal sniping about not only Romney but also his mercurial campaign muse, Stevens. Viewed warily by conservatives, known for his impulsiveness and described by a colleague as a “tortured artist,” Stevens has become the leading staff scapegoat for a campaign that suddenly is behind in a race that had been expected to stay neck and neck through Nov. 6.

8. “ROMNEY ABRUPTLY SHIFTS STRATEGY” (Politico, 9/17). On Monday morning, Allen and VandeHei popped up with another scoop. Evidently, Stevens and his colleagues in the Romney brain trust have decided it’s time to scrap their idea of focussing relentlessly on Obama’s economic record in favor of making the case for Romney’s own policy prescriptions (whatever they might be). Here’s how the Politico duo put it:

With polls showing Obama for the first time moving clearly ahead in important swing states— most notably, Ohio—Romney advisers concluded they had to make a painful course correction. Stevens said the economy is likely to remain “the dominant focus” of the campaign. But ads and speeches will focus on a wider array of issues, including foreign policy, the threat from China, debt and the tone in Washington. Stevens said the big, unifying question will be: “Can we do better on every front?”

9. “ROMNEY SEIZES LEAD OVER OBAMA: POLL” (New York Post, 9/13). O.K., this headline is a bit older than the others, but the basic message it conveys holds true. In the Rasmussen daily tracking poll, Romney moved ahead of Obama last Thursday for the first time since the Democratic Convention, and since then he’s retained a slight edge. In Monday’s update, he is leading by forty-seven per cent to forty-five per cent.

How seriously should we take these numbers? Just as P.P.P. is often accused of leaning Democratic, critics say Rasmussen’s results are biased toward the Republicans. In the rival Gallup tracking poll, Obama retains a three point lead, but that is down from seven points last Wednesday. (The Real Clear Politics poll of polls also currently shows Obama leading by three points.)

10. “OBAMA’S CONVENTION BOUNCE BEGINS TO FADE” (Washington Times, 9/16). Both tracking polls suggest that some of the President’s post-Convention bounce has already disappeared. This is hardly unexpected—conventions don’t give candidates the lift they used to—but Team Romney is seizing on it as evidence that it remains very much in the game. “Obama lost [4] points and it was a rough week for us?” Stuart Stevens told Politico. “I don’t quite see it that way. Any poll you pick, [Obama’s] losing a point a day.” John Zogby, a Republican pollster, also offered encouragement to the Romney campaign. “Is it all over?” he said to the Washington Times. “Of course not.”

So that’s the deal. Now, here’s the multiple-choice test, which consists of just one question:

Eight weeks before Election Day, Mitt Romney is:

(a) Done. Put a fork in him.

(b) Battered, bruised, and almost ready for shipping to his multi-car garage in La Jolla.

(c) Struggling but by no means out of it.

(d) Cunningly sitting off the pace in preparation for a late surge.

(e) Doing well and headed to win “fairly comfortably.” (That’s another quote from Stuart Stevens.)

Photograph by Lauren Lancaster.

Three Reasons to Salute Ben Bernanke

It’s time to give Ben Bernanke some credit. Under attack from the left and right for much of the past year, the mild-mannered former Princeton prof has shown some leadership and pushed through a major policy shift. In committing the Fed to buying tens of billions of dollars worth of mortgage bonds every month until the jobless rate, currently 8.1 per cent, falls markedly, Bernanke and his colleagues on the Fed’s policy-making committee have finally demonstrated that they won’t stand aside as tens of millions of Americans suffer the harsh consequences of a recession that was largely made on Wall Street.

I’ve had my ups and downs with Bernanke, whom I profiled at length back in 2008. At the start of the year, I thought critics were giving him a raw deal. With short-term interest rates close to zero (where they’ve been since December, 2008), and with job growth seemingly picking up, the calls for more Fed action seemed overstated. But over the past six months, as the recovery sputtered and Bernanke dithered, I too, ran out of patience with him. In a column in Fortune last month, I even suggested that Barack Obama should have replaced him when he had the chance, back in 2010.

It turns out that Bernanke was merely biding his time. I still think the Fed should have moved earlier. Once it became clear that slower G.D.P. growth, rather than some statistical aberration, was generating the big falloff in job creation we saw from March onwards, there was no justification for inaction. But Bernanke has now rectified the error—and then some. For at least three reasons, Thursday’s move was a historic one, which merits a loud salute:

1. Bernanke exceeded expectations. For several months now, he has been saying that the Fed would eventually act if the labor market didn’t improve of its own accord. In Jackson Hole last month, at the Fed’s annual policy gathering, he strongly hinted at another round of quantitative easing—the practice of exploiting the Fed’s capacity to create money and making large-scale purchases of bonds, which puts downward pressure on interest rates, which, in turn, spurs spending and job creation—at least in theory.

The Fed has tried this policy twice before, in 2009/10 (QE1) and 2010/11 (QE2). In retrospect, it was a big mistake to abandon QE2 just as the Obama Administration’s fiscal stimulus, which had provided support to the economy from 2009 to 2011, was running down. The experience of Japan demonstrates that in the aftermath of asset-price busts, when households and firms are seeking to pay down their debts, the prolonged maintenance of monetary and fiscal stimulus is necessary to prevent a semi-permanent slump.

Bernanke didn’t publicly concede on Thursday that he had blundered—that would be asking too much. But in announcing the terms of QE3, he went considerably further than most observers had been expecting. The two previous rounds of quantitative easing were term limited: this one isn’t. Rather, its duration will be directly linked to the jobs picture. “(I)f the outlook in the labor market for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other tools as appropriate such improvement is achieved…” the Fed said in a statement.

2. The Fed chairman overruled the inflation hawks and put the interests of the unemployed before outmoded economic dogma. With inflation running well below two per cent and plenty of spare capacity in the economy, the notion that the United States faces the threat of hyperinflation, or even inflation that is modest but considerably higher than the current rate, isn’t credible. Still, many conservative economists, and even some people inside the Fed, have been arguing against a resumption of quantitative easing on the grounds that it would undermine the central bank’s ability to maintain stable prices.

At first glance, the inflation hawks’ argument has a certain plausibility to it. Milton Friedman reminded us that ultimately inflation is a monetary phenomenon. If there is a big excess of cash sloshing around the economy, people will eventually use it to bid up prices. In extreme cases, things can go the way of Weimar Germany, or of Zimbabwe in recent years. But such an outcome is far from inevitable. Quantitative easing doesn’t necessarily lead to high inflation. The Bank of Japan has been using it, on and off, for more than a decade, and the Japanese rate of inflation is just 0.2 per cent. Here at home, inflation is running below the Fed’s target rate of two per cent, giving Bernanke plenty of flexibility—a point he stressed in his press conference, arguing that concerns about inflation didn’t justify inaction on unemployment. “(W)e don’t anticipate the economy is going to be overheating anytime soon,” he said. “And as long as we pay close attention to inflation expectations as well as the trajectory of the economy, we think inflation will remain close to our two per cent target.”

3. Bernanke ignored his Republican critics and demonstrated the Fed’s political independence. Most of the people opposed to a resumption of quantitative easing are members of the G.O.P.: Mitt Romney and many senior figures on Capitol Hill are among them. These politicians argue that QE1 and QE2 didn’t work, but they also have a personal interest in keeping the economy comatose until after November. Then there are the G.O.P. “goldbugs,” such as Ron Paul and Rand Paul, who think that the Fed should be effectively abolished. It so happens that Bernanke, too, is a Republican. He served in the White House under George W. Bush, who appointed him to the Fed. But he didn’t let this prevent him from doing what he thought was best for the economy.

“On the politics, we have tried very, very hard, and I think we have been successful…, to be nonpartisan and apolitical, and make our decisions based entirely on the state of the economy,” he told reporters. That is pushing it a bit. You can rest assured that one of the reasons the Fed hesitated to act earlier this year was because it didn’t want to get embroiled in an election-year political row. But over the spring and summer, as the economy stalled, Bernanke evidently decided he would have to defy the Republicans, and that’s what he has done. “We’re not promising, you know, a cure to all these ills,” he said. “But what we can do is provide some support. And by assuring the public that we will be prepared to take action if the economy falters, we’re hopeful that will increase confidence and make people more willing to invest, hire, and spend.” These are the words of a knowledgeable, well-meaning, and reassuringly apolitical public servant. His latest gambit may not work as well as he hopes, although in stoking the stock market and bringing down mortgage rates it is already having some effect. Even if QE3 does succeed, it could create some exit-strategy problems for Bernanke or his successor. (His term is up at the end of 2013.) Alan Greenspan’s long tenure demonstrated that it’s easier to switch on the monetary spigots than to switch them off.

But with more than twenty million Americans out of work or working part-time, and with many others having dropped out of the labor force because they have given up on finding a job, Bernanke isn’t paid to sit around and watch the economy stagnate indefinitely. Under the Employment Act of 1946 and the Humphrey-Hawkins Full Employment Act of 1978, the Fed has a legal obligation to do what it can to help—an obligation that Bernanke has now recognized in a very public fashion: “The idea is to quicken the recovery to help the economy begin to grow quickly enough to generate new jobs and reduce the unemployment rate,” he said. “So that is the criterion we are looking at.”

Well done, Ben!

Photograph by Platon.

Read John Cassidy’s profile of Bernanke, from 2008.

Romney’s Libya Blunder Reflects Larger Failings

Day three of the “September surprise,” and things aren’t getting any better for our boy Willard. Awakening to a chorus of criticism on the nation’s editorial pages—except, of course, from the loyal Wall Street Journal—he was also greeted with new polls showing him trailing by ten points in Michigan and two points in Florida. Meanwhile, the search for senior Republicans willing to repeat his suggestion that the President is providing succor to America’s enemies continues.

So far, just about the only statements of support Romney has managed to elicit have come from discredited neocons (Bill Kristol, Liz Cheney), paleo-cons (Donald Rumsfeld, John Bolton), and nutty-cons (Sarah Palin, Jim DeMint). Meanwhile, John McCain and Condoleezza Rice, arguably the G.O.P.’s two most influential voices on foreign policy, have conspicuously failed to criticize Obama, while paying tribute to Ambassador Chris Stevens, the longtime foreign-service officer who was killed.

About the best that can be said for Romney is that, responding to the public statements from the U.S. Embassy in Egypt, he took a cynical tactical gamble that misfired after the protests in Libya took a tragic turn. When you are losing an election that you should win you have to do something, and accusing a Democratic President of being soft on national security is a standard G.O.P. fallback.

Even this defense of Romney’s actions is a bit of a stretch. On Tuesday night, when his campaign released its initial statement, it was already clear that one U.S. consulate official in Benghazi had been killed, though the person’s name and job title weren’t yet known. Perhaps Romney was assuming it was a low-level employee, maybe not an American citizen. Still, going on the offensive in this manner before all the facts were known was inviting trouble. And if that was foolhardy, Romney’s decision on Wednesday morning to double down—this after the news emerged that Stevens and three other consulate officials had been killed—was virtually inexplicable. “It almost feels like Sarah Palin is his foreign policy adviser,” Matthew Dowd, a former political adviser to President George W. Bush, told the Washington Post. “It’s just a huge mistake on the Romney campaign’s part—huge mistake.”

Obama’s subsequent jibe that Romney “shoots first and aims later” hit home. But perhaps the most disturbing thing about this whole incident is that it wasn’t simply a spontaneous gaffe on the part of the G.O.P. candidate. It was debated and thought through. According to the same report in today’s Washington Post, Romney acted on the “unanimous recommendation of his foreign policy and political advisers.”

Think about that for a moment. Sometime on Tuesday evening, presumably, the best minds that Romney has gathered around him, convened by conference call, or offered their thoughts individually, and all of them thought it was a capital idea, solely on the basis of statements from the Embassy in Cairo, to accuse Obama and his Administration of expressing sympathy “with those who waged the attacks.” Not only that, but there’s no suggestion that the following morning—as Obama, Secretary of State Clinton, and others were busy paying tribute to Ambassador Stevens—any of these sages thought to call Romney up and persuade him to zip it.

Why? Well, it is widely thought that Romney’s political advisers aren’t the brightest bulbs—his entire campaign has been a litany of errors. What has been less remarked upon is the makeup of Romney’s foreign-policy team. For a former businessman who claims to willing to hire the best and smartest regardless of background, it is a remarkably unimpressive and ideologically driven group, consisting largely of washed up neocons and Cold Warriors, many of whom served in the Administration of George W. Bush.

On a day-to-day basis, Romney’s foreign-policy point man is Dan Senor, a former spokesman for the American government in Iraq, who wrote a book about Israel’s economy that Romney often cites. Senor, a longtime neocon, often travels with Romney. On Tuesday, according to a report from ABC News, he was travelling with Paul Ryan in order to brief him along with Reuel Marc Gerecht, another well-known neocon, and Jamie Fly, who worked at the National Security Council under George W. Bush. John Bolton is another important player in the Romney team. Often dismissed even on the right as a hirsute blowhard, Bolton appears to have persuaded Romney to take him seriously. A third influential adviser is Eliot Cohen, a professor at John Hopkins, who once worked for Paul Wolfowitz. Then there’s Bill Kristol, the editor of The Weekly Standard, who is also said to have Romney’s ear.

Kristol, Bolton, Gerecht, Cohen, and several other of the people who are listed as informal advisers on Romney’s Web site are former members of the Project for the New American Century, the neocon think tank that will forever be linked to the invasion of Iraq. Conspicuously absent from Romney’s foreign-policy advisory team are representatives of the less bellicose school of thinking that dominated Republican foreign policy before the neocons showed up. A few months back, in a piece entitled “Is There A Romney Doctrine?,” David Sanger, the Times’ veteran Washington correspondent, wrote this:

Curiously for a Republican candidate with virtually no foreign policy record, Mr. Romney has made little effort to court the old-timers of Republican internationalism, from the former national security adviser Brent Scowcroft to the former secretaries of state James A. Baker III, George P. Shultz and even the grandmaster of realism, Henry A. Kissinger. And in seeking to define himself in opposition to President Obama, Mr. Romney has openly rejected positions that George W. Bush came around to in his humbler second term.

What are we to make of all this? One interpretation is that Romney is one of nature’s neocons—a soul mate of Wolfowitz and Kristol. I don’t think that’s right. From all that we know about his history, he is a fairly cautious and practical fellow, hardly the type to embark on ideological crusades. My theory is that in this area, as in others, Romney has demonstrated that he’s a poor politician, allowing himself to be co-opted and hoodwinked by the right.

When Romney decided to run in 2012, the best argument for his candidacy was that he had nothing to do with the Bush Administration and could appeal to moderate voters. But rather than trying to make a break with the Bush Administration and portraying himself as a different sort of Republican, one who has learned from the mistakes of the past, Romney has embraced the Bush heritage—one that delivered the Presidency to Obama in 2008. We see this in economic policy, where he has embraced the Republican orthodoxy that tax cuts are a solution to everything and tax increases are evil. We see it in the field of social issues, where he has pandered to evangelicals and conservative Catholics on issues like abortion and gay marriage. And now we see it in foreign policy, where he has given a platform to the very folks who led us to disaster in Iraq.

Romney’s blundering during the past couple of days is of a piece with his entire campaign. A man with an impressive résumé, whose best hope of victory lay in portraying himself as a moderate, independent figure—somebody not beholden to tired old orthodoxies, Democratic or Republican—has self-destructed by aligning himself with some of the least credible and most voter-repellant groups in the G.O.P. If he had kept quiet on Tuesday, he would be well placed now to raise some legitimate concerns about what happened: Why was the consulate in Libya so lightly guarded? What returns is the United States getting on the billions of dollars in aid it provides to Egypt? Why did we intervene in Libya but not in Syria? What’s our over-all policy for the Middle East? If he tries to make these points today or tomorrow, his intervention will be widely dismissed as another political ploy.

His electoral prospects have deteriorated to the point where about his only hope is a grim one: that the situation in the Middle East worsens, and more American embassies get sacked. That way, perhaps, the alarmist warnings of Bolton and others about lack of leadership and resolve on the part of the Obama Administration will start to resonate with voters. As of now, though, I’m sticking with my initial judgment: it looks like curtains for the Mittster.

See our full coverage of the campaign season at The Political Scene.

Photograph by Charles Dharapak/AP.

“Libya Surprise” Could Be Death Knell for Romney Campaign

Harold Wilson, who was Prime Minister of Britain twice, in the sixties and seventies, famously said a week is a long time in politics. Sometimes, so is a day. This time yesterday, the conventional wisdom, faithfully trotted out by yours truly among many, was that Obama was coasting to victory in a Presidential sweepstakes that was threatening to peter out in tedium.

So much for that. After last night’s “September surprise,” Obama is still home free, and Romney is still trailing. In fact, this might well be the death knell for his campaign. But what an uproar.

Mitt Romney’s attempt to exploit the violent anti-U.S. demonstrations in Egypt and Libya to portray Obama as soft on America’s enemies backfired almost immediately, when it became clear the statement from the U.S. Embassy in Cairo he had cited was issued before the demonstrations began. Overnight, the tragic news came that Chris Stevens, the U.S. Ambassador to Libya, and three other U.S. officials were killed while trying to flee the besieged U.S. consulate in Benghazi. But still the Mittster didn’t quit seeking to gain political advantage. Speaking in Florida this morning, he repeated the charge that the Obama Administration was failing to stand up for things Americans hold dear, such as freedom of speech. The White House was “standing in apology for our values” and following a “terrible course,” Romney said.

The reaction to Romney’s desperate gambit has been almost universally negative. About the only people who are sticking up for him today are Jim DeMint, the Tea Party senator from South Carolina, and Bill Kristol, the editor of the Weekly Standard. Even Romney’s running mate, Paul Ryan, failed to echo his line of attack. Speaking in Wisconsin, Ryan described the killings in Libya as “pretty disturbing,” but he didn’t criticize Obama, and he said it was “a time for healing.”

There will be plenty of time to discuss the rights and wrongs. But before getting into all that, I thought it might be worth setting down how the past twenty-four hours unfolded. With events taking place in three countries, on two continents, there has been a lot of confusion about who said what when. Here’s a quick timeline I put together from the Web. As far as I can see, Romney doesn’t come out of it looking any better. But it does indicate that his attacks initially caused some concern in the White House—enough concern for the Administration to try and distance itself from its loyal servants in Cairo.

Ironically, it all began with a temporary truce between the campaigns to mark the anniversary of 9/11. But yesterday afternoon, demonstrators surrounded the U.S. embassies in Cairo and Benghazi to protest an anti-Islam film, a lengthy trailer for which can be seen on You Tube, that reportedly depicts the prophet Mohammad as a womanizer, a child molester, and an imposter. Initially, the focus was on Egypt. Around noon local time, before the protests against the video began but following threats of violence, the U.S. Embassy in Cairo posted this statement online:

The Embassy of the United States in Cairo condemns the continuing efforts by misguided individuals to hurt the religious feelings of Muslims—as we condemn efforts to offend believers of all religions. Today, the 11th anniversary of the September 11, 2001 terrorist attacks on the United States, Americans are honoring our patriots and those who serve our nation as the fitting response to the enemies of democracy. Respect for religious beliefs is a cornerstone of American democracy. We firmly reject the actions by those who abuse the universal right of free speech to hurt the religious beliefs of others.

Embassy staffers also issued a number of tweets that made similar points. Some of these messages were subsequently deleted, but not before a number of Republicans and conservative journalists here in the United States were alerted. One of the tweets said, “We firmly reject the actions by those who abuse the universal right of free speech to hurt the religious beliefs of others.” Another said, “Respect for religious beliefs is a cornerstone of American democracy.” (A report from CBC, the Canadian news organization, reproduces some of the tweets.)

As the day and evening wore on, a couple of thousand demonstrators gathered outside the Cairo embassy. According to a Reuters report from the scene, most of them were youthful supporters of Islamic groups or “ultras,” the soccer fans who played a big role in bringing down Hosni Mubarak. Some of the demonstrators tried to scale the walls of the fortress-liked compound. Eventually, they succeeded, seizing a U.S. flag and setting it alight before the television cameras. Reuters reports that there were about twenty people atop the embassy wall, and they tried to raise their own black flag, emblazoned with the words: “There is no god but God, and Mohammad is his messenger.”

In Benghazi, a city in eastern Libya, meanwhile, a similar protest was taking place, and it, too, was turning violent. Militia men armed with grenades raided the U.S. consulate and set it on fire. Initially, Libyan officials said that one embassy worker had been killed. “The other staff members were evacuated and are safe and sound,” Libya’s deputy interior minister Wanis al-Sharif told AFP news agency. A news story from the BBC posted at about 9 P.M. E.T. said that the identity of the dead U.S. official wasn’t yet known, but he had reportedly been shot.

In response to the killing, Secretary of State Hillary Clinton issued a statement on Tuesday night that said,

I condemn in the strongest terms the attack on our mission in Benghazi today. As we work to secure our personnel and facilities, we have confirmed that one of our State Department officers was killed. We are heartbroken by this terrible loss. Our thoughts and prayers are with his family and those who have suffered in this attack.

The statement went on to mention the anti-Islam video that had sparked the demonstrations:

Some have sought to justify this vicious behavior as a response to inflammatory material posted on the Internet. The United States deplores any intentional effort to denigrate the religious beliefs of others. Our commitment to religious tolerance goes back to the very beginning of our nation. But let me be clear: There is never any justification for violent acts of this kind.

While all this was happening, conservative bloggers and Republicans were seizing upon the statements from the Cairo embassy as an opportunity to criticize the Obama Administration for showing weakness in the face of attacks. Some of them were confusing the timing of the statements, mistakenly suggesting they were put out after the demonstrations and incursions had begun. Evidently fearful that it was was politically vulnerable, the Obama Administration moved to distance itself—a pretty disreputable move, given what its diplomats had just gone through. “The statement by Embassy Cairo was not cleared by Washington and does not reflect the views of the United States government,” an Administration official told Byron Tau, a reporter for Politico, who promptly posted a story headlined, “Obama administration disavows Cairo apology.” (The embassy statement was not actually an apology, but that had been lost, too.)

That wasn’t enough for the Romney campaign. It had prepared a statement that was embargoed until midnight, thereby keeping to the 9/11 truce. But as things hotted up it decided to move early. At 10:09 P.M., according to an informative backgrounder at Buzzfeed, Andrea Saul, a Romney spokeswoman, e-mailed reporters with a ready-to-use statement from Romney that said,

I’m outraged by the attacks on American diplomatic missions in Libya and Egypt and by the death of an American consulate worker in Benghazi. It’s disgraceful that the Obama administration’s first response was not to condemn attacks on our diplomatic missions, but to sympathize with those who waged the attacks.

Once Romney’s inflammatory statement hit the Internet, a frenzy ensued on Twitter and the political Web sites, with reporters parsing the various statements and speculating about the deleted embassy tweets. By midnight, several other G.O.P. heavies had criticized the Administration, including Reince Priebus, the chairman of the Republican National Committee. “Obama sympathizes with attackers in Egypt. Sad and pathetic,” Priebus tweeted. And Sarah Palin also weighed in. In a lengthy post on her Facebook page, she said: “Apparently, President Obama can’t see Egypt and Libya from his house…. We already know that President Obama likes to ‘speak softly’ to our enemies. If he doesn’t have a ‘big stick’ to carry, maybe it’s time for him to grow one.”

The Obama campaign pushed back. Just after midnight, Ben LaBolt, a spokesman for the Obama campaign, sent an e-mail to reporters that said, “We are shocked that, at a time when the United States of America is confronting the tragic death of one of our diplomatic officers in Libya, Governor Romney would choose to launch a political attack.”

That was about it for Tuesday night. This morning came the news that four U.S. officials in Benghazi, not one, had been killed while attempting to flee the besieged consulate, and that Ambassador Stevens was among them. But this news didn’t persuade Romney to change his tone—far from it. Appearing at a hastily arranged press conference in Jacksonville, he reiterated his earlier criticisms, saying,

The president takes responsibility not just for the words that come from his mouth, but also for the words that come from his ambassadors, from his Administration, from his embassies, from his State Department. They clearly sent mixed messages to the world. The statement that came from the Administration—and the embassy is the Administration—the statement that came from the Administration was a statement which is akin to apology. And I think was a severe miscalculation.

Other Republicans struck a more conciliatory note. On Capitol Hill, John Boehner, the Speaker of the House, ordered flags to be lowered to half-mast. Reince Preibus tweeted, “Our prayers are w/Ambassador Stevens’ family and the families of those killed in the attacks in Libya. We mourn their loss and grieve w/them.”

Shortly after ten-thirty this morning, President Obama and Secretary of State Clinton appeared together in the White House Rose Garden. The President paid tribute to Stevens and his dead colleagues, and he vowed to exact justice on the perpetrators. He also referenced the video that started it all, saying,

We reject all efforts to denigrate the religious beliefs of others. But there is absolutely no justification for this type of senseless violence. None. The world must stand together to unequivocally reject these brutal acts.

The “severe miscalculation” may have been Romney’s.

Photograph by Charles Dharapak/AP Photo.

The Security State: Is Al Qaeda Winning the War on Terror?

On this, the eleventh anniversary of the 9/11 attacks, there is a general consensus that “we” are winning the so-called war on terror. In Charlotte last week, President Obama declared, “A new tower rises above the New York skyline, Al Qaeda is on the path to defeat, and Osama bin Laden is dead.” That’s true, of course, and it’s right and fitting to remember the victims of 9/11, and pay tribute to the troops who’ve fought in places like Helmand Province.

But what sort of victory does it constitute? The primary aim of terrorists is to inspire terror. Bin Laden, Khalid Sheikh Mohammed, and other Al Qaeda leaders aspired to force the U.S. military out of Saudi Arabia and other Arab lands, but they knew this was unlikely. Their immediate goal was to strike back at the Great Satan, creating lasting panic, trepidation, and dread inside the United States. They wanted to shock Americans into realizing that the actions their government took overseas would have consequences, potentially very bad consequences, at home. More than a decade on, can we say that the 9/11 terrorists haven’t achieved these things?

After fighting two unpopular wars in ten years, the United States is so cowed that it is slinking out of Afghanistan, the task it set itself patently unfinished, while it refuses even to consider intervening in Syria, where a military dictator is bombing his own people. About the only military intervention Washington will countenance these days is bombing suspected enemies, the occasional one an American citizen, with unmanned drones—an activity that largely takes place beyond the purview of Congress and the media.

In libertarian and interventionist circles, this state of affairs is widely discussed and lamented. But what of the situation here at home, where the actions of nineteen men armed only with box cutters has transformed the United States into a country consumed to the point of obsession with security? Air travellers have become compulsory participants in peep shows, with high-tech magnetometers and X-ray machines conducting virtual strip searches. Metropolitan police departments have been converted into paramilitary forces armed with assault rifles, armored personnel carriers, and even, in the case of New York, anti-aircraft guns. Peaceful protesting has turned into a potentially dangerous pursuit, given the aggressive policing that it attracts. And many major events now take place behind security cordons so elaborate they are almost laughable.

In Charlotte last week and in Tampa the week before, great swaths of downtown were transformed into virtual military encampments—and for what purpose? To protect the dignitaries and delegates from possible bomb attacks? A simple cordon drawn around the Tampa Bay Times Forum and the Time Warner Cable Center would have sufficed for that purpose. Rather than securing the convention sites, the authorities in Tampa and Charlotte fenced off and locked down block after block, deploying so many heavily armed cops, national guards, and Secret Service agents that it was impossible to count them all.

One of the charms of going to conventions used to be that everything took place within a small area, and you could wander around and bump into people: politicians, delegates, party activists, protesters. These days, it’s so much hassle getting from A to B that it’s hardly worth venturing outside your allotted seat—if you can get to it in the first place. Twice last week, I was locked out of the Time Warner Cable Arena after the Secret Service shut it down without an explanation. On the first occasion, it reopened after about an hour, and I managed to get in. The second time, the gates didn’t reopen at all, and I eventually gave up. It wasn’t just journalists who were complaining. At the G.O.P. convention, I hitched a ride back from an event in St. Petersburg with one of Mitt Romney’s big donors. He was bemoaning the fact that his hotel was inside the security zone, which meant that it was virtually impossible for him to see anybody. “It’s a nightmare,” he said.

Now, you may not give a fig for the concerns of cosseted journalists and multi-millionaires, and I can’t say I blame you. But what about ordinary Americans who want to get their views across in a peaceful demonstration? Increasingly, the only way to do this is inside a riot-police “kettle” at the time and place of the authorities’ choosing. We saw this across the country last year with the heavy-handed treatment of Occupy Wall Street. It happened again in Charlotte. Returning to the Westin Hotel one night, I came across a couple hundred protesters, tops, carrying signs and chanting anti-war and anti-corporate slogans. To be honest, it was a pretty piddling turnout, the sort of affair that twenty years ago would have been handled by a couple of dozen cops, with a few horses as backup.

Outside of the military, I have rarely seen such a display of firepower. Surrounding the protesters, there were at least as many cops in full riot gear. Along the sidewalks, there were cops on bikes, their batons interlinked, preventing any of the onlookers from joining the demonstrators. At every intersection, there were dozens and dozens of officers on motorbikes. Immediately in front of and behind the demonstration, there were big trucks—personnel carriers, really—packed with more cops ready to leap off if needed. And up various side streets, there were yet more helmeted cops providing backup. I hate to think how much it was costing to police a demonstration so small it hardly made the local papers.

Some of these security precautions were probably put in place last year, during the O.W.S. protests, when the authorities in Tampa and Charlotte feared thousands of demonstrators descending upon their cities. Ultimately, though, they were as much a product of 9/11 as the airport security lines and the drone missions were. With plentiful federal funds available to beef up “homeland security,” police departments all over the country have been stocking up on military-style hardware that, although originally intended to target foreign terrorists infiltrating the country, is now increasingly used for regular police work involving American citizens who pose no threat to national security.

Perhaps the most depressing thing about all of this is that virtually nobody in the two major parties challenges it. Republicans who cavil when Washington finances green-energy companies are perfectly happy to see countless billions of federal dollars being spent on X-ray machines, electronic eavesdropping, and riot gear. Democrats, understandably eager not to be criticized as soft on security issues, are just as ready to spend. In the past four years, the Obama Administration has expanded the budget of the Department of Homeland Security by almost a fifth. From both sides, there is nary a word about the cost-effectiveness of the spending, or how it is changing the relationship between citizens and government.

Whichever party wins in November, the security state will continue to expand—we can be sure of that. Come the twentieth anniversary of 9/11, it will probably still be growing. Fighting terror, like fighting Communism before it, has become a growth industry, the participants in which constitute an immensely powerful lobby. Barack Obama may be right when he says Al Qaeda is all but defeated. But its legacy is thriving.

Photograph courtesy of the N.Y.C. Mayor’s Office.

Obama Math: Probability of a Win Now Seventy-Five Per Cent

After the blowout parties in Tampa and Charlotte comes the hangover, and the sober reckoning of where things stand. For Team Obama, the outlook remains good. Despite Friday’s poor job figures and the lukewarm reviews that the President’s convention speech received, the evidence suggests his lead in the polls is increasing. As for Team Romney, despite having had a decent convention, it enters the final eight weeks of the campaign needing something unexpected to happen.

Here is the math:

8.1: Objectively speaking, the August job figures were a big disappointment. It wasn’t just the headline figure: just ninety-six thousand jobs created. June and July’s payroll figures were revised down. Over the past six months, the economy has created just ninety-seven thousand jobs a month, which belies the theory, popular earlier this year, that the slowdown in the labor market was merely a statistical aberration. The fact is the recovery has stalled: economic forecasters are expecting annualized G.D.P. growth of just 1.6 per cent in the period from July to September, and that follows G.D.P. growth of just 1.7 per cent in the third quarter.

The big mystery is why Obama isn’t suffering more political damage. If this time last year you had told the pundits that the economy would be sputtering like this just weeks before the election, most of them—myself included—would have predicted a Republican victory, or, at least, a Republican lead in the polls. Why hasn’t it materialized? Obviously, the bruising G.O.P. primary and the fact that Romney is such a weak candidate are part of the answer. But I also suspect two other economic factors are playing a role.

One is the headline unemployment rate. As a result of population growth, the potential labor force expands by about a hundred-and-twenty-five thousand jobs a month. When job creation doesn’t match this increase, as it isn’t doing now, the jobless rate typically rises. But Obama has gotten lucky with the numbers. Since the start of this year, the unemployment rate has actually declined by two-tenths of a percentage point, from 8.3 per cent to 8.1 per cent, which makes it difficult for Republicans to argue that things are getting worse.

How so? With the economic downturn now well into its fifth year, many jobless Americans are giving up on finding employment, which has helped keep a lid on the unemployment rate. To be counted as a member of the labor force, a jobless person has to have actively looked for work during the previous four weeks. If the person doesn’t satisfy that criterion, he or she isn’t officially counted as unemployed despite being out of work. In February, the labor force was 154,871,000. In August, it was 154,645,000, a decline of close to two-hundred-and-thirty thousand. Another telling fact is that the “participation rate”—the proportion of the working-age civilian population that is in the labor force—has fallen to its lowest level since September, 1981. At the start of 2007, the peak of the boom, the participation rate was 66.4 per cent. Last month, it was 63.5 per cent. That’s bad news for millions of unfortunate Americans, but it has prevented the unemployment rate from rising, which could have been politically catastrophic for Obama.

13,300: The other factor that is playing a role, I think, is the rise in the stock market, which people are seeing reflected in their I.R.A.s and 401ks. Since March, 2009, when it hit a bottom, the stock market has virtually doubled in value. And it keeps going up. A year ago, the Dow closed the first week of September just below 11,000. Today, it stands above 13,300. We can argue whether this bull market represents a resurgence in corporate profits or the Fed flooding Wall Street with cheap money—it’s probably a bit of both—but the fact is it translates into rising wealth. Add in the fact that house prices are finally picking up in most parts of the country, and many Americans who aren’t out of a job or working part time because they can’t find a full-time job are starting to feel a bit better about their personal finances.

50: According to the latest Gallup tracking poll, Obama’s approval rating has just hit fifty per cent, and his disapproval rating has fallen to forty-four per cent. This might be a temporary bounce driven by the convention, but if it were to persist it would be highly significant. History suggests that incumbent Presidents with approval ratings of fifty per cent or higher tend to get reëlected.

And it’s not just Gallup: other polls show a similar story. Rasmussen, the other daily-tracking poll, has Obama’s approval rating at fifty-two per cent, compared to forty-eight per cent this time last week. Real Clear Politics, which averages all the recent polls—tracking and otherwise—shows a slightly smaller bounce. It has Obama’s approval rating at 49.2 per cent, up about two per cent on a week ago. As more post-convention polls are published over the next few days, this figure might well increase further.

The rise in the President’s approval ratings is also reflected in the head-to-head surveys. Both Gallup and Rasmussen now show Obama leading Romney by five points or thereabouts. This time last week, the race was virtually tied. Again, some of this bounce might prove temporary. But if some of it persists, as it probably will, Charlotte will have given the Democrats a bigger lift than Tampa gave the Republicans.

270: That’s the number of votes in the Electoral College necessary for victory. On the plane home from Charlotte last Friday, I played around with arithmetic and tried to draw up potential routes for victory for both sides. However you do it, the message is the same: things are looking very good for Obama and very challenging for Romney.

The invaluable Real Clear Politics electoral map shows that Obama is looking good for two hundred and twenty-one Electoral College votes, which means that he needs just another forty-nine for victory. Romney-leaning states account for a hundred and ninety-one votes, so he needs somehow to pick up another seventy-nine. With the recent addition of Pennsylvania to the Democratic column, ten states remain competitive: Colorado (nine electoral votes), Florida (twenty-nine), Iowa (six), Michigan (sixteen), Nevada (six), New Hampshire (four), North Carolina (fifteen), Ohio (eighteen), Virginia (thirteen), and Wisconsin (ten).

If you fiddle around with permutations, you will find that Obama has many ways to emerge victorious. If he comes out in top in Florida and Ohio (where a new poll shows him leading by five points) it’s pretty much over. If he loses Florida, he still win by sweeping the Midwest. And even if he loses Florida and Ohio, he can pull through by winning Colorado, Iowa, Michigan, Nevada, New Hampshire, and Virginia—all states where he’s ahead in the polls.

Romney, on the other hand, is utterly dependent on winning Florida and North Carolina, two traditionally Republican states that are now tossups. Even if he does well in the Southeast, he has to turn around some states that are leaning to Obama. One way to do it would be win Virginia, a possibility Karl Rove is still talking up, and then sweep Colorado, Iowa, and Nevada. Another possibility is to win Virginia and then rally in the Midwest, grabbing two out of three from Michigan, Ohio, and Wisconsin. Given the most recent state polls, both of these options represent formidable challenges.

Of course, something could still happen to change the polling dynamics. Romney could tear a piece out of Obama in the debates; the tsunami of negative ads the Republicans are about to unleash could conceivably turn around some Obama-leaning states; there could be an “October surprise.” As of now, though, there is no sign of Romney getting the surge he needs. Intrade, the online prediction market, puts the odds of an Obama victory at about fifty-nine per cent. Personally, I think that’s a low estimate. As I’ve said before, I pay more attention to the offshore bookmakers, where more real money is staked. At Ladbrokes, the British bookie, Obama is now the one-to-three favorite to defeat Romney, which means you have to bet three hundred dollars on him to win a hundred dollars. These odds imply that the probability of an Obama victory is seventy-five per cent.

That figure sounds a bit high, but only a bit. With the polls and the electoral math still going in his favor, the President has ample reason to be confident. Just not overconfident.

See our full coverage of the campaign season at The Political Scene.

Photograph by Gaia Squarci.

Obama Math: 8.1 + 13,300 + 50 = 270

After the blowout parties in Tampa and Charlotte comes the hangover, and the sober reckoning of where things stand. For Team Obama, the outlook remains good. Despite Friday’s poor job figures and the lukewarm reviews that the President’s convention speech received, the evidence suggests his lead in the polls is increasing. As for Team Romney, despite having had a decent convention, it enters the final eight weeks of the campaign needing something unexpected to happen.

Here is the math:

8.1: Objectively speaking, the August job figures were a big disappointment. It wasn’t just the headline figure: just ninety-six thousand jobs created. June and July’s payroll figures were revised down. Over the past six months, the economy has created just ninety-seven thousand jobs a month, which belies the theory, popular earlier this year, that the slowdown in the labor market was merely a statistical aberration. The fact is the recovery has stalled: economic forecasters are expecting annualized G.D.P. growth of just 1.6 per cent in the period from July to September, and that follows G.D.P. growth of just 1.7 per cent in the third quarter.

The big mystery is why Obama isn’t suffering more political damage. If this time last year you had told the pundits that the economy would be sputtering like this just weeks before the election, most of them—myself included—would have predicted a Republican victory, or, at least, a Republican lead in the polls. Why hasn’t it materialized? Obviously, the bruising G.O.P. primary and the fact that Romney is such a weak candidate are part of the answer. But I also suspect two other economic factors are playing a role.

One is the headline unemployment rate. As a result of population growth, the potential labor force expands by about a hundred-and-twenty-five thousand jobs a month. When job creation doesn’t match this increase, as it isn’t doing now, the jobless rate typically rises. But Obama has gotten lucky with the numbers. Since the start of this year, the unemployment rate has actually declined by two-tenths of a percentage point, from 8.3 per cent to 8.1 per cent, which makes it difficult for Republicans to argue that things are getting worse.

How so? With the economic downturn now well into its fifth year, many jobless Americans are giving up on finding employment, which has helped keep a lid on the unemployment rate. To be counted as a member of the labor force, a jobless person has to have actively looked for work during the previous four weeks. If the person doesn’t satisfy that criterion, he or she isn’t officially counted as unemployed despite being out of work. In February, the labor force was 154,871,000. In August, it was 154,645,000, a decline of close to two-hundred-and-thirty thousand. Another telling fact is that the “participation rate”—the proportion of the working-age civilian population that is in the labor force—has fallen to its lowest level since September, 1981. At the start of 2007, the peak of the boom, the participation rate was 66.4 per cent. Last month, it was 63.5 per cent. That’s bad news for millions of unfortunate Americans, but it has prevented the unemployment rate from rising, which could have been politically catastrophic for Obama.

13,300: The other factor that is playing a role, I think, is the rise in the stock market, which people are seeing reflected in their I.R.A.s and 401ks. Since March, 2009, when it hit a bottom, the stock market has virtually doubled in value. And it keeps going up. A year ago, the Dow closed the first week of September just below 11,000. Today, it stands above 13,300. We can argue whether this bull market represents a resurgence in corporate profits or the Fed flooding Wall Street with cheap money—it’s probably a bit of both—but the fact is it translates into rising wealth. Add in the fact that house prices are finally picking up in most parts of the country, and many Americans who aren’t out of a job or working part time because they can’t find a full-time job are starting to feel a bit better about their personal finances.

50: According to the latest Gallup tracking poll, Obama’s approval rating has just hit fifty per cent, and his disapproval rating has fallen to forty-four per cent. This might be a temporary bounce driven by the convention, but if it were to persist it would be highly significant. History suggests that incumbent Presidents with approval ratings of fifty per cent or higher tend to get reëlected.

And it’s not just Gallup: other polls show a similar story. Rasmussen, the other daily-tracking poll, has Obama’s approval rating at fifty-two per cent, compared to forty-eight per cent this time last week. Real Clear Politics, which averages all the recent polls—tracking and otherwise—shows a slightly smaller bounce. It has Obama’s approval rating at 49.2 per cent, up about two per cent on a week ago. As more post-convention polls are published over the next few days, this figure might well increase further.

The rise in the President’s approval ratings is also reflected in the head-to-head surveys. Both Gallup and Rasmussen now show Obama leading Romney by five points or thereabouts. This time last week, the race was virtually tied. Again, some of this bounce might prove temporary. But if some of it persists, as it probably will, Charlotte will have given the Democrats a bigger lift than Tampa gave the Republicans.

270: That’s the number of votes in the Electoral College necessary for victory. On the plane home from Charlotte last Friday, I played around with arithmetic and tried to draw up potential routes for victory for both sides. However you do it, the message is the same: things are looking very good for Obama and very challenging for Romney.

The invaluable Real Clear Politics electoral map shows that Obama is looking good for two hundred and twenty-one Electoral College votes, which means that he needs just another forty-nine for victory. Romney-leaning states account for a hundred and ninety-one votes, so he needs somehow to pick up another seventy-nine. With the recent addition of Pennsylvania to the Democratic column, ten states remain competitive: Colorado (nine electoral votes), Florida (twenty-nine), Iowa (six), Michigan (sixteen), Nevada (six), New Hampshire (four), North Carolina (fifteen), Ohio (eighteen), Virginia (thirteen), and Wisconsin (ten).

If you fiddle around with permutations, you will find that Obama has many ways to emerge victorious. If he comes out in top in Florida and Ohio (where a new poll shows him leading by five points) it’s pretty much over. If he loses Florida, he still win by sweeping the Midwest. And even if he loses Florida and Ohio, he can pull through by winning Colorado, Iowa, Michigan, Nevada, New Hampshire, and Virginia—all states where he’s ahead in the polls.

Romney, on the other hand, is utterly dependent on winning Florida and North Carolina, two traditionally Republican states that are now tossups. Even if he does well in the Southeast, he has to turn around some states that are leaning to Obama. One way to do it would be win Virginia, a possibility Karl Rove is still talking up, and then sweep Colorado, Iowa, and Nevada. Another possibility is to win Virginia and then rally in the Midwest, grabbing two out of three from Michigan, Ohio, and Wisconsin. Given the most recent state polls, both of these options represent formidable challenges.

Of course, something could still happen to change the polling dynamics. Romney could tear a piece out of Obama in the debates; the tsunami of negative ads the Republicans are about to unleash could conceivably turn around some Obama-leaning states; there could be an “October surprise.” As of now, though, there is no sign of Romney getting the surge he needs. Intrade, the online prediction market, puts the odds of an Obama victory at about fifty-nine per cent. Personally, I think that’s a low estimate. As I’ve said before, I pay more attention to the offshore bookmakers, where more real money is staked. At Ladbrokes, the British bookie, Obama is now the one-to-three favorite to defeat Romney, which means you have to bet three hundred dollars on him to win a hundred dollars. These odds imply that the probability of an Obama victory is seventy-five per cent.

That figure sounds a bit high, but only a bit. With the polls and the electoral math still going in his favor, the President has ample reason to be confident. Just not overconfident.

See our full coverage of the campaign season at The Political Scene.

Photograph by Gaia Squarci.

Six Unanswered Questions From Charlotte

1. Did Obama peek at Friday’s dismal job figures—payroll growth of just ninety-six thousand in August—before his speech? If he did, it would help explain why he gave such a low-key and modest address, and why, unlike Bill Clinton and Joe Biden, he didn’t claim that the economy had already turned around.

2. What was the real reason for Obama’s speech being moved indoors to the Time Warner Cable Arena? The official explanation was the weather, but Thursday turned out to be, for the most part, bright and sunny. Republicans claim that the Democrats were having trouble filling a seventy-thousand-seat outdoor stadium. My suspicion, based on nothing but tactical logic, is that Obama and his advisors decided a grand stadium appearance would make it difficult to portray the President as humble but resolute, his sleeves rolled up.

3. Where was Tim Geithner? Given the dominant role that the economy has played in Obama’s first term, the youthful Treasury Secretary is undoubtedly the most consequential figure in the administration after the President, but he’s also turned into its invisible man. What a waste of all that television training he got on taking the job.

4. Where were George Clooney and Justin Timberlake? Eva Longoria did O.K., but she doesn’t have the star power of G.C.(who did narrate a video), whom Obama has described as a good friend, or the hold over young voters of J.T., who recently said he was inspired by Obama again. After the Clint Eastwood fiasco in Tampa, perhaps the Obama people decided to ease up on the Hollywood endorsements.

5. Will Obama get a post-convention bounce? David Plouffe, his political advisor, said that he wasn’t expecting one, but that was almost certainly an attempt to downplay expectations. After the Republicans’ recent resurgence in the polls—the race has tightened by three or four points since early August—Team Obama will be hoping to tack on at least a couple of points. Friday’s job figures won’t help with that.

6. Why is Team Obama so confident of victory? They don’t like to say it publicly, but these guys think they’re winning. Part of the explanation is the Electoral College map, which means that Romney has to win Florida and Michigan plus Ohio or Virginia if he is to have any chance. But also, I suspect, the Obamaites hold the Mittster’s political skills in such low regard they just can’t imagine losing to him.