Moody’s, Israel, And Desperate Republicans

Presidential campaigns always worry about an “October Surprise” – an event beyond their control that has a major impact on the election.

While the following two items are not necessarily of that significance, they have injected themselves into the September election campaign dialogue.

And while both may seem to be a problem for President Obama, I am not sure this is the case.


Moody’s And Wall Street 

Moody’s said Tuesday it would likely strip the United States of its AAA credit rating if lawmakers fail to produce a long-term debt reduction plan next year. They also went on to say that if negotiations go well, it would affirm the country’s AAA rating and change its outlook to “stable” from “negative.”

If you recall, Standard and Poor’s downgraded their US credit rating just over a year ago, so this is really no surprise.

Other than the timing

The chatter following this announcement has been sadly predictable.  Those on the right are blaming the President.  Democrats are pointing to Congress and their obstructionary behaviour last summer during budget negotiations.

Let’s look at some key facts.

Conventional wisdom likes to assume that Republicans, in this case Romney/Ryan are better stewards of the economy and so on the surface, a credit downgrade threat would seem to hurt President Obama.  But Republicans best beware this strategy, especially in this case. Why?

First of all, Moody’s was quite specific in its criticism of Congress. And it was Congress who played “chicken” with the debt ceiling last summer. In fact, this is what  Paul Ryan said, while Chair of the House Budget Committee:

May 2011“If a bondholder misses a payment for a day or two or three or four — what is more important is you are putting the government in a materially better position to better pay its bills going forward”

Yes, he was saying that default would be ok for a short time, if necessary.  Not conciliatory words and not a very smart plan.  The result could have been financial panic.  And for those who would say it was just a negotiating tactic?  If true, I would say it shows a side of Mr. Ryan that best be kept hidden away.

In the same interview, Ryan talks about the “Biden Commission” – the same commission he mentioned in his infamous fact-free speech in Tampa.

None of this would be good for Republicans to highlight, so I would caution them against trying to pin this latest economic press release on the President.

For example, the Democrats could easily run an ad featuring Senate Minority Leader Mitch McConnell saying this“the single most important thing we want to achieve is for President Obama to be a one-term president.”

After watching an ad like that, who do you think voters might blame for the current budgetary mess? And it’s not like the GOP can refer back to G.W. Bush (the man Tampa ignored).  His impact on the economy was, well, horrific.

Also, there is Mr. Ryan’s budget.  It doesn’t add up. Even Mr. Romney is running away from it.  Again, not good to highlight.

Finally, it is worth noting that Wall Street has contributed more to Republicans and their PAC’s this cycle by a ratio of nearly four to one.  If Democrats were to point this little fact out, then this whole news story might backfire quite badly on the GOP.


Israel and Iran

It has long been a mystery to me why Israel holds such sway in US Presidential elections.  Obviously, Jewish voters are important to both sides, but the US Government is never going to abandon Israel, nor let anything develop that threatens its existence.  To say otherwise, especially in light of recent democratic initiatives in the region, is disingenuous at best.

So, when Israeli Prime Minister Benjamin Netanyahu injects himself into the campaign, it gets my interest.

Mr. Netanyahu reacted swiftly to comments by US Secretary of State Hillary Clinton, who suggested there was still time for a negotiated end to the issue of Iran’s nuclear program. Israel disagrees. No surprise here.

However, it was also seeded to the press that President Obama had refused to make time to meet with Mr. Netanyahu during his upcoming trip to the US.  The White House has since denied this, but the damage was already done: President Obama has abandoned Israel and is not fit to lead the US in its interests abroad!

Can this really be the case?

The first thing to note is that Mr.Romney has been stumping about his very long and close friendship with Mr. Netanyahu. As has been pointed out for us by Fox News, Mr. Netanyahu is thinking a Romney win would help him in his plans for a preemptive attack against Iran.

Second, Sheldon Adelson, who has donated 20 million dollars to the GOP this election cycle, was behind Mr. Romney’s recent visit to Israel.

Here’s the important part: Adelson is also very close with Mr. Netanyahu – so close that he started his own newspaper in Israel, after being unhappy that the 3 major Israel dailies were being too critical of Mr. Netanyahu. (It is interesting to note that the paper has been called a “danger to democracy“. Fox News, I’m looking in your direction now…)

Politically, this fabricated episode also neatly fits in with Romney’s recent stump speeches claiming that President Obama wants to weaken the US military (he does not).

But, this could backfire on Republicans, who know that their only hope of winning is to stick to the economy.


Final thoughts

I think there is far more risk in these news items for Republicans. Why?

They have no record to run on economically.  G.W. Bush’s two terms were a financial disaster for the US economy and last summer’s budget fiasco was at the very least, equally their fault.  Wall Street actions nearly caused a depression, took billions in taxpayer’s bailout funds and then sat on it, all while continuing to pay out huge compensation packages to executives.  Moody’s, viewed as a surrogate for Wall Street, will therefore win them no favors with voters, given these current and historical attitudes “main street” has for Wall Street.

Republicans can’t attack President Obama on his foreign policy, or as being soft militarily either. The Arab Spring and Osama Bin Laden are just two examples of the administration’s successful handling of both files.  This reality was reflected in the Republican speeches from Tampa, where there was very little talk of the military.  Mr. Romney for example, did not say the word troops once in his speech.  Not one time.

And Republicans know both topics are troubling.  The result is a constantly changing rhetoric of puffery with no policy specifics and a dependance on SuperPAC attack ads that rely on falsity and offer no real solutions.

Unfortunately for GOP voters, it smells of desperation from a group low on ideas.  A group who expected that their hatred and disdain for this President was shared widely among the electorate, and assumed victory would require very little in the way of a detailed plan. A group who are constantly on the defensive when confronted with fact checkers and legitimate policy questions. A group who fears they have been exposed as such.

And fear breeds hostility, negativity and desperation.

And that desperation will likely lead us to more stories like these, all with dubious timing and an intricate web of connection to the election.  Stories the challengers will hope they can stick to the incumbents.

All the while, sticking it to the voters…



More proof of Mr. Netanyahu ‘s deep connection to Mr. Romney from the now infamous Mother Jones videos.   In his speech he said:

“I have a very good team of extraordinarily experienced, highly successful consultants, a couple of people in particular who have done races around the world. I didn’t realize it. These guys in the US—the Karl Rove equivalents—they do races all over the world: in Armenia, in Africa, in Israel. I mean, they work for Bibi Netanyahu in his race. So they do these races and they see which ads work, and which processes work best, and we have ideas about what we do over the course of the campaign.”