Dr Bharat Jhunjhunwala
Republican contender for the President of the United States Mitt Romney has supported outsourcing and opposed welfare doles. He is not inclined to directly provide relief to the American people from the ongoing global financial crisis. His economic policies may prove better in the long run, however. Improved profitability of American companies may keep that economy afloat even though troublesome for the people. On the other hand, Obama does not have concrete policies for bringing the United States out of the economic crisis. Yet he is more considerate and soft towards the common man. The American people, therefore, face a difficult choice between good economic policies and people’s welfare.
The world view of the two contenders is quite different. Obama is strongly opposed to outsourcing. Romney, on the other hand, supports it. American companies should be allowed to outsource in order to remain competitive in the global economy, he says. As Governor of Massachusetts he had vetoed a Bill passed by the legislature banning government contractors from outsourcing work.
Obama is right that jobs, especially, those dependent on US Government support should not be outsourced. But he forgets that US companies will have to use more expensive labour. They will be priced out of the global market and the jobs will evaporate into the air anyways. Romney, on the other hand, is correct insofar as supporting American businesses are concerned. But he has no prescription for creating jobs. Ground reality is that the high standards of living of American people are not sustainable in a global economy in which wages have to be equalized.
President George W Bush had provided tax cuts to American citizens to help them ward off the impact of global recession. These tax cuts are due to expire in December 2012. Obama wants to end tax cuts for the richer persons earning more than $250,000 per year. He also wants to continue to with the present policy of providing generous unemployment compensation to the people. In contrast, Romney wants to reduce tax rates for all persons-poor as well as rich. And he wants to replace unemployment compensation with ‘unemployment savings accounts’ where individuals will deposit part of their incomes and which will then be used to pay unemployment compensation to them should such a need arise. This arrangement will be somewhat like the Provident Fund in India where a person deposits part of his salaries and gets certain benefits later. Romney does not want the Government to be burdened with the provision of unemployment compensation.
Third major difference in the position of the two candidates is regarding the educational system. Obama is focused on reform of the primary educational system and on improvement of quality. Romney, on the other hand, is focused on pushing frontline research. Both actions are important. However, the glory of American economy is largely due to research. Any failing on this front will be irreparable.
Obama tilts towards China. He mentioned China’s positive role in South Asia during his visit to China. That was a direct affront to India’s dominant position in the subcontinent. Obama hosted Manmohan Singh in the first State Dinner of his presidency in 2009. However, shorn of symbolisms, nothing concrete was achieved. Observers declared the visit a failure. Obama did support India’s candidacy for a permanent seat in the United Nations Security Council which is welcome but that is merely ‘talking in the air’ because the matter is not on the global agenda at present.
Romney is hard on China in comparison. He has highlighted the complicity of Chinese Government is encouraging violation of patent laws by Chinese manufacturers. He has demanded that the US Government impose countervailing duties on Chinese goods that are made artificially cheap by the policy of Chinese Government to keep value of the Yuan low. Romney has explicitly said that he favours closer cooperation with India and Indonesia in order to counter Chinese hegemony in Asia. From the global geopolitical standpoint, therefore, Romney will be more favourable to India.
Indian expatriates living in the US appear to support Obama more than Romney. Perhaps this is due to the historically soft position of the Democrats on immigration. This may also be due to the race factor. Brown-skinned Indian NRIs may feel closer to black Obama. But Indian expatriates will have to make a difficult choice between their sentimental preference for Obama and the less-favourable position of Obama towards India.
Obama and Romney need to understand that the party is over. The strength of the United States in the last 100 years arose mainly from its technological edge-assembly line, atomic reactors, jet airplane, space exploration, computers and internet have been all American inventions. America has lost that edge lately. The present high standards of living have been sustained by the monopoly profits made by companies working with these pioneering technologies. These profits are no longer coming in. Therefore, the imperative is for the American people to adjust to lower standards of living. Unfortunately Obama and Romney display no recognition of this hard reality. Both are not realizing that need of the hour is to tighten the belt. Neither will provide stable relief to the American people.
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