The battle between President Obama and Republican presidential candidate Mitt Romney has gotten heated over the past few weeks. As November nears and the president looks to assuage voters against fresh news of the country's economic malaise, instead of talking up positive news from his four years in office, Mr. Obama has attacked Romney personally.
The first shot across the bow was an attack on the predatory business practices of the private equity industry where Romney cut his teeth. However, yesterday Obama made the biggest faux pas in his presidency; the consummate politician, it was a sharp departure for a president who always seems to say the right things publicly. Speaking at a morning news conference, the president blamed declines in the economy's vital signs on cutbacks in spending by state and local governments, Congress' refusal to support his jobs bill, and negative headwinds coming from Europe. And overall, "the private sector is doing fine." According to the Washington Post:
"The remark struck a discordant political note in the current economic climate, and Republican adversaries pounced on the assertion to lampoon him for being out of touch. And at least politically, Obama played directly into the GOP argument that he does not understand the depths of the economic crisis and that he is too dependent on government to solve the economy's problems. At a campaign appearance in Council Bluffs, Iowa, presidential rival Mitt Romney accused Obama of an 'extraordinary miscalculation' that will 'go down in history … Is he really that out of touch?' Romney said. 'He's defining what it means to be detached and out of touch with the American people.'"
The scenario sounds eerily similar to the gaffe Republican presidential candidate, John McCain, made in September 2008 after the failure of Lehman. In Shock Exchange … How Inner City Kids From Brooklyn Predicted The Great Recession And The Pain Ahead, due out in July, Ralph Baker, Executive Director of the New York Shock Exchange, describes how McCain's extraordinary miscalculation was the nail in the coffin of any plans he had on becoming the country's next president:
"Mr. McCain stayed the party line by promising to preserve existing tax cuts imposed by President George W. Bush. He preached the usual supply-side rhetoric of low capital gains taxes, a reduction in corporate taxes and reduced government spending. Mr. Obama on the other hand, proposed a middle-class tax cut, an investment in alternative energy, and modernization of the country's schools. On September 16, 2008, the day after Lehman Brothers failed, Senator McCain made a fatal flaw. Speaking to a group of supporters in Florida, McCain calmly stated that the 'fundamentals of the economy are strong.' I thought the guy had completely lost his mind. Senator Obama seized the moment by calling the meltdown of the stock market 'the most serious financial crisis since the Great Depression,' and Mr. McCain 'out of touch.'"
The Shock Exchange had been writing about the deteriorating U.S. economy and the doom facing the likes of Goldman Sachs (GS), JPMorgan Chase (JPM) and Morgan Stanley (MS). We predicted the Great Recession, and McCain's comments left me in a state of shock (no pun intended). Moreover, the economy is still not doing fine. To learn about the "pain ahead", you will have to wait until July.