Politics Obama - Actually doing a good job?

Raghnar · Sep 25, 2012

Beware that Germany rushing into renewable energy sources has the implication of A LOT of new Carbon plants...

Baraka_Guru · Sep 25, 2012

When you account for all tax credits, breaks, benefits, loopholes, etc., corporate rates (i.e., the effective corporate tax rate) in the U.S. are relatively low. It really comes down to specific incentives for developing technologies or capacities within certain industries that would otherwise be underdeveloped without such benefits.

U.S. Corporate Tax Rate Plunges To 40 Year Low Of 12.1 Percent | ThinkProgress

Raghnar said: ↑

Beware that Germany rushing into renewable energy sources has the implication of A LOT of new Carbon plants...
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It's certainly a challenge, but it seems to be one they are actively managing. Compare that to the long-term problems France may face with their nuclear-centric strategy.

I still say a mixed approach is best, while continuing to develop better, cleaner technologies.

Busting the carbon and cost myths of Germany's nuclear exit | Damian Carrington | Environment | guardian.co.uk

New Coal Fired Plants Could Be Key to German Energy Revolution - SPIEGEL ONLINE

Aceventura · Oct 2, 2012

redux said: ↑

In fact, the effective tax rates of oil/gas industries are among the lowest of any industry (in the 15% range, lower than than industry average of 18%)...and among the highest profits.
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I suppose there are different methods for calculating effective tax rates, but I looked at Exxon Mobil's annual 2011 numbers they had (audited) line item before tax, income of $73,257 (in millions) and after tax income of $42,206 (in millions). That is an effective rate of about 42%. Here is a link to the data.

Financial Statements for Exxon Mobil Corporation - Google Finance
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Baraka_Guru said: ↑

When you account for all tax credits, breaks, benefits, loopholes, etc., corporate rates (i.e., the effective corporate tax rate) in the U.S. are relatively low.
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One thing to keep in mind is that corporate taxes get passed on to consumers. Consumers pay corporate taxes. If one country has artificially low corporate tax rates out of line with other nations, all other thing being equal, net capital will flow to that country. Only foolish nations would have a tax policy that goes beyond real social costs making their nation relatively uncompetitive. it is also foolish to have tax policy that goes below real social costs forcing their citizens to subsidies the lives of people in other nations - a strange form of voluntary exploitation, China comes to mind.

Baraka_Guru · Sep 25, 2012

Aceventura said: ↑

I suppose there are different methods for calculating effective tax rates, but I looked at Exxon Mobil's annual 2011 numbers they had (audited) line item before tax, income of $73,257 (in millions) and after tax income of $42,206 (in millions). That is an effective rate of about 42%. Here is a link to the data.

Financial Statements for Exxon Mobil Corporation - Google Finance
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There's what the industry reports, and then there's the reality:

[...]

Reuters compares the 45 percent tax rate Exxon claims it pays to the effective rate estimated by Citizens for Tax Justice — a rate that’s even lower than Mitt Romney’s tax rate. Chevron, which made $26.9 billion profit in 2011, paid 19 percent:

Citizens for Tax Justice considers U.S. profits and U.S. taxes paid only. By that measure, Exxon Mobil paid 13 percent of its U.S. income in taxes after deductions and benefits in 2011, according to a Reuters calculation of securities filings.

It is a far cry from the 35 percent top corporate tax rate.

Still, the three-year average for telecom companies is 8 percent; for information technology services companies, it is 2.5 percent, according to CTJ.

Chevron CEO John Watson recently claimed “We’re the highest taxed industry that I’m aware of” while the American Petroleum Institute has claimed the industry pays a tax rate at more than 40 percent. But as Reuters explains, the oil industry uses a different methodology to claim it pays an artificially higher tax rate to the public. The industry “lumps together U.S. and foreign taxes. It includes taxes that are deferred and thus not paid yet. U.S. companies must pay taxes on profits earned abroad, but they can defer these taxes until they bring the cash into the country.” The big five use this tactic of hoarding cash oversees in tax havens, cutting their tax rates drastically. Exxon uses at least 20 tax shelters. These tax loopholes permit Exxon to pay a rate in-line with Mitt Romney, who’s also notorious for tax dodging.
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Exxon Mobil's Tax Rate Drops To 13 Percent, After Making 35 Percent More Profits On Rising Gas Prices In 2011 | ThinkProgress

Aceventura said: ↑

One thing to keep in mind is that corporate taxes get passed on to consumers. Consumers pay corporate taxes. If one country has artificially low corporate tax rates out of line with other nations, all other thing being equal, net capital will flow to that country. Only foolish nations would have a tax policy that goes beyond real social costs making their nation relatively uncompetitive. it is also foolish to have tax policy that goes below real social costs forcing their citizens to subsidies the lives of people in other nations - a strange form of voluntary exploitation, China comes to mind.
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Oh, shareholders pay corporate taxes too, of course.

And it's a bit superficial to look at tax rates alone in terms of gauging competitiveness. All other things are never equal.

redux · Oct 2, 2012

Aceventura said: ↑

I suppose there are different methods for calculating effective tax rates, but I looked at Exxon Mobil's annual 2011 numbers they had (audited) line item before tax, income of $73,257 (in millions) and after tax income of $42,206 (in millions). That is an effective rate of about 42%. Here is a link to the data.

Financial Statements for Exxon Mobil Corporation - Google Finance
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.....
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In fact, that rate of about 42% includes foreign taxes and taxes that are deferred....as pointed out in baraka's link.
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Nearly 100 years of tax breaks, tax incentives, depletion allowances, lease waivers and other subsidies:

What other industry has fared so well?

Aceventura · Oct 2, 2012

Baraka_Guru said: ↑

Oh, shareholders pay corporate taxes too, of course.
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The point is that taxes get reflect in prices. Generally, no matter what happens there is going to be a reversion to a risk adjusted rate of return to invested capital.

And it's a bit superficial to look at tax rates alone in terms of gauging competitiveness. All other things are never equal.
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Here we go again - I did not imply "alone", I specifically stated "all other things being equal".
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redux said: ↑

In fact, that rate of about 42% includes foreign taxes and taxes that are deferred....as pointed out in baraka's link.
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I wrote that I suppose there are different methods for calculating effective tax rates. I tend to look at it in absolute terms, I prefer not making all kinds of contortions to get a result to fit a certain political argument.

Alistair · Sep 25, 2012

Aceventura said: ↑

The point is that taxes get reflect in prices.
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They certainly do. So do subsidies, of course.

As a non-American, I think Americans pay FAR too little for gas and that adds to the problem. Raising gas prices via taxation, of course, is inflationary - which is also a problem. Perhaps it depends on how those taxes are used?

Baraka_Guru · Sep 25, 2012

Aceventura said: ↑

The point is that taxes get reflect in prices. Generally, no matter what happens there is going to be a reversion to a risk adjusted rate of return to invested capital.
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Prices aren't tied directly to taxes. Both prices and profits are a result of a number of other variables. Taxes are merely one of them.

Also note that another thing influenced by taxes and other expenses are salaries and wages.

Here we go again - I did not imply "alone", I specifically stated "all other things being equal".
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What else is implied in the assumption that "all other things [are] equal." Why would you make that assumption if not to consider taxes in isolation, or at least as the only significant factor?

Again, all other things are never equal.

Do you want to look at other relevant factors too?

Aceventura · Sep 25, 2012

Baraka_Guru said: ↑

Prices aren't tied directly to taxes. Both prices and profits are a result of a number of other variables. Taxes are merely one of them.
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Look at the variance in state sales taxes for gas. Different states have different tax amounts. Adjusting for "all other things being equal" (Econ 101), the variance at the pump is due to different tax rates.

Do you want to look at other relevant factors too?
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No, I want to talk about President Obama's promise to lower health care insurance premiums.

A family with employer-provided health insurance now pays just under $16,000 in annual premiums, an increase of about 4 percent over a year ago, according to a study released Tuesday by the nonprofit Kaiser Family Foundation.
Individual policies purchased through an employer rose even less, increasing just 3 percent from last year to an average of $5,615, the study said.
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http://www.nytimes.com/2012/09/12/business/health-care-premiums-rise-modestly-report-says.html?_r=0

On the surface these modest increases may appear to be good news, however adjusting for other factors like actual wages being down. All other things being equal real premium increases are measurably higher. Yet another failed promise.

Baraka_Guru · Sep 25, 2012

Aceventura said: ↑

Look at the variance in state sales taxes for gas. Different states have different tax amounts. Adjusting for "all other things being equal" (Econ 101), the variance at the pump is due to different tax rates.
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So you want to ignore price fluctuations based on domestic and global factors? Why? That makes no sense.

No, I want to talk about President Obama's promise to lower health care insurance premiums.

http://www.nytimes.com/2012/09/12/business/health-care-premiums-rise-modestly-report-says.html?_r=0

On the surface these modest increases may appear to be good news, however adjusting for other factors like actual wages being down. All other things being equal real premium increases are measurably higher. Yet another failed promise.
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What's with you and wanting all other things to be equal? You only include the things you want to include. It's usually just one thing. This time you want to include two things, because it helps your case to state that wages are down. Convenient.

I'd suggest looking at the big picture, but that might be a mistake. Let me just ask you what you think the problem is and what the solution is. Do you think this comes down to regulation? Do you think there are adequate regulations? Do you think there should be more? Less? I think I know your answers, but I don't want to presume. "Obamacare" is relatively new and a rather odd beast that needs a bit of work, to say the least.

Aceventura · Sep 25, 2012

Baraka_Guru said: ↑

So you want to ignore price fluctuations based on domestic and global factors? Why? That makes no sense.
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Here is some info on the concept "all other things being equal" or ceteris paribus:

Ceteris paribus or caeteris paribus is a Latin phrase, literally translated as "with other things the same," or "all other things being equal or held constant." It is an example of an ablative absolute and is commonly rendered in English as "all other things being equal." A prediction, or a statement about causal or logical connections between two states of affairs, is qualified by ceteris paribus in order to acknowledge, and to rule out, the possibility of other factors that could override the relationship between the antecedent and the consequent.[1]
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Ceteris paribus - Wikipedia, the free encyclopedia

I am not sure what the basis of our miscommunication is - perhaps we need to start at the basic level.

Baraka_Guru · Sep 25, 2012

Aceventura said: ↑

Here is some info on the concept "all other things being equal" or ceteris paribus:

Ceteris paribus - Wikipedia, the free encyclopedia

I am not sure what the basis of our miscommunication is - perhaps we need to start at the basic level.
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I would simply suggest both of us avoid using Ceteris paribus as a crutch. We should discuss complex matters without oversimplifying them, especially when it involves leaving out important and unavoidable factors.

There is no sense in speaking of things in isolation when they don't operate as such.

Aceventura · Sep 25, 2012

Baraka_Guru said: ↑

I would simply suggest both of us avoid using Ceteris paribus as a crutch.
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The above is odd to me. Ceteris paribus is not a crutch in my opinion.

We should discuss complex matters without oversimplifying them, especially when it involves leaving out important and unavoidable factors.
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At the core, again, we find that we think different. I find this intriguing. I have no clue how to understand complex relationships between two variables without adjusting or controlling for the other variables - Ceteris paribus. Perhaps you can elaborate on how you do it.

redux · Sep 25, 2012

Aceventura said: ↑

....

On the surface these modest increases may appear to be good news, however adjusting for other factors like actual wages being down. All other things being equal real premium increases are measurably higher. Yet another failed promise.
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premium growth at historic lows......savings of $3+ billion to seniors in closing donut hole....2+ million young adults now covered in family plan....$1+ billion in rebates for overcharges....millions of children with pre-existing conditions now covered...preventive care with no co-pay for all existing plans.....

Failed promise? By what objective measure or standards?

samcol · Oct 2, 2012

he should be thrown out of office for this alone. this is not acceptable foreign policy. this is not spreading peace and democracy.

Outrage at CIA's deadly 'double tap' drone attacks

Report claims just one in fifty victims of 'surgical' US strikes in Pakistan are known militants. Jerome Taylor reports on a deadly new strategy
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ralph nader also provided what i consider great critisism of the president especially from someone on the left.

It’s no surprise that Ralph Nader isn’t a fan of former President George W. Bush. After all, the longtime activist ran against him in both 2000 and 2004. But Nader’s even less a fan of President Barack Obama, if only because he thinks Obama was capable of so much more.
On issues related to the military and foreign policy, Obama’s worse than Bush, “in the sense that he’s more aggressive, more illegal worldwide,” Nader told POLITICO, going so far as to call Obama a “war criminal.”

(Also on POLITICO: Nader: Both conventions "corrosive")
“He’s gone beyond George W. Bush in drones, for example. He thinks the world is his plate, that national sovereignties mean nothing, drones can go anywhere. They can kill anybody that he suspects and every Tuesday he makes the call on who lives and who dies, supposed suspects in places like Yemen and Pakistan and Afghanistan, and that is a war crime and he ought to be held to account.”
Nader called Obama “below average because he raised expectation levels. What expectation level did George W. Bush raise?… He’s below average because he’s above average in his intellect and his knowledge of legality, which is violating with abandon.”
“I don’t know whether George W. Bush ever read the Constitution,” said Nader. “This man taught the Constitution, and this is what we got.”
Nader gave Obama this much: He’s the lesser of two evils when compared to GOP presidential nominee Mitt Romney. But he said Obama is “the more effective evil because he brings credibility, he brings the democratic heritage to it, he has legitimized the lawless war-mongering and militarism abroad of George W. Bush.”
(Also on POLITICO: Obama at U.N. gives robust defense of free speech)
When asked to highlight some positives about Obama’s presidency, Nader said, “I like the way he’s emphasized renewable energy, even though he still supports nuclear and fossil fuels, as if they’re all the same, all of the above. But he does speak more about renewables than any president perhaps since Jimmy Carter.” (Nader will be speaking at the Green Festival in Washington, D.C., later this month.)
And: “He wanted to have a public works program, he really did want to have a jobs program and the Republicans crushed it and that would have created a lot of jobs that couldn’t be exported to China.”
Nader doesn’t let Republicans off easy, either, calling them “the worst Republican Party in history.”
“We’re dealing with a real sick, decaying Democratic Party that can’t defend the country against the cruelest, most ignorant, most anti-worker, most war-mongering, most Wall Street–indentured Republican Party in its history, since the 1850s.”
As for Romney, Nader said “he’s not the old Romney, governor of Massachusetts. He’s had a character and personality makeover. He’s just bought into the extreme right wing of the Republican Party, represented by Paul Ryan, and I don’t think he’s going to be able to shake that. He’s basically a corporation running for president masquerading as a human being.”
For the first time in a long time, Nader is not running for president this year. From the way he puts it, he may be through with such campaigns.
“I’ve run several times and we’ve documented the two-party tyranny, which means they’re very adept at excluding, with a whole variety of ways, third parties.”
It’s not, however, because he’s been billed by some as a political spoiler.
“That’s a politically bigoted words, as if we’re second-class citizens,” said Nader. “Since we’re all trying to get votes from one another, either we’re all spoilers of one another or none of us are spoilers.”
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redux · Sep 25, 2012

On balance, while I dont support the drones policy, I would take the Obama foreign policy over the two alternative conservative/libertarian extremes.....preventive war/attack Iran (neo-cons) or appeasement/total disengagement (R Paul).

samcol · Oct 2, 2012

redux said: ↑

On balance, while I dont support the drones policy, I would take the Obama foreign policy over the two alternative conservative/libertarian extremes.....preventive war/attack Iran (neo-cons) or appeasement/total disengagement (R Paul).
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his foreign policy has just been bush term 3, that's why i can't understand the support of him. how would a neo-con at this moment be any worse? nothing about iran is off the table. a pre-emptive strike could happen anytime with either obama or romney in power.

iraq is bush's legacy as the left likes to say, but are we really out of there? the policy is troops out, blackwater (renamed ACADEMI) back in. it all just seems smoke and mirrors.

afghanistan has been nothing more than surge in 2009 then withdrawl surge before election. just seems purely political.
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from an anti-war perspective having romney might actually be better. during bush's seconds term the resistance from the left was immense. however when obama got in power the whole anti-war, anti police-state movement went to sleep for the most part.

Baraka_Guru · Sep 25, 2012

Aceventura said: ↑

The above is odd to me. Ceteris paribus is not a crutch in my opinion.
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It's not a crutch in the right context. Your use seems to be for that purpose. It's like you're saying you want to talk about Factor A and Factor B while ignoring Factors C through G because you see patterns between A and B, and wouldn't it be nice if we could just look at A and B?

Well, it might be nice, but we'd be having a different kind of discussion entirely. Personally, I don't think it would be a very interesting one.

At the core, again, we find that we think different. I find this intriguing. I have no clue how to understand complex relationships between two variables without adjusting or controlling for the other variables - Ceteris paribus. Perhaps you can elaborate on how you do it.
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When you look at relationships between two variables, it helps to know whether there are other factors that influence them. In your past few posts, you seem to want to eliminate these other factors from the discussion. I'm not sure why that is. Are you trying to go in the direction of philosophy or theory? I thought we were talking about real-life issues.

Look, I really wouldn't mind discussing the insurance premium issue. But I'm not going to limit the discussion simply because you find it convenient. Will you respond to my questions about regulation?

Raghnar · Sep 26, 2012

Baraka_Guru said: ↑

It's certainly a challenge, but it seems to be one they are actively managing. Compare that to the long-term problems France may face with their nuclear-centric strategy.

I still say a mixed approach is best, while continuing to develop better, cleaner technologies.
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France have nuclear-centric induced problems, but also a lot of asset, expecially in these new go-green-goodies political parties in continental europe (Italy for 20 years and now even Germany, that started importing energy), France is the one that is providing a steady and affordable amount of energy making EDF getting a fortune.
Germany is paying a lot of incentives to the monumental disaster that is its photovoltaic industry, now completely crushed by Chinese cheap Panels coming from the biggest deposits or rare earth available (and now starting to be closed to exports, trusting their factories and crushing external competition) and cheap super-dirty-and-killing carbon energy. Now its getting revamped the Ruhr Carbon deposits and opening GW-sized Carbon power plants, and will be practically impossible to stick to the Kyoto protocol within few years... I see a grim future for that country that now is playing bossy in the European Politics.
The only energetic hope for this europe is to unite even more, at least energetically, adding the big France Nuclear basepower to the new Spanish Eolic resources, the on-demand Carbon and Gas modulation respectively used in Germany and Italy.
You in the US have a lot a resources and space and less worry, but the renewable sources can kill a country more than 100 Fukushima, if you play insane with the state incentives...

rogue49 · Sep 27, 2012

Only if the government plays it the right way...will it strengthen the nation, make energy more affordable and move forward with alternatives.
Otherwise, they'll end up bowing down to the Energy Powers...and they'll just line their own pockets with whatever is convenient.

And on the Rare Earth note...the US has got quiet a bit, but unlike China...we aren't allowing mining of it. (so they have the market)
Again, it's how the government plays the game.

So the next 4 years will be a big factor...and on that note,
interesting article from Andrew Sullivan...rational old-school conservative. (the kind I like, NTTAWWT)

President Obama: The Democrats' Ronald Reagan
by Andrew Sullivan - September 24, 2012

With his first term behind him, Obama is poised to be as significant a president as Reagan—tackling the deficit, spearheading immigration reform, and jolting the GOP back to sanity.

As the fall has turned crisper, a second term for Barack Obama has gotten likelier. This may, of course, change: the debates, the Middle East, the unemployment numbers could still blow up the race. At this point in 2004, one recalls, George W. Bush was about to see a near eight-point lead shrivel to a one-state nail-biter by Election Day. But one thing that has so far, in my view, been underestimated is the potential impact of a solid Obama win, and perhaps a Democratic retention of the Senate and some progress in the House. This is now a perfectly plausible outcome. It would also be a transformational moment in modern American politics.

If Obama wins, to put it bluntly, he will become the Democrats’ Reagan. The narrative writes itself. He will emerge as an iconic figure who struggled through a recession and a terrorized world, reshaping the economy within it, passing universal health care, strafing the ranks of al -Qaeda, presiding over a civil-rights revolution, and then enjoying the fruits of the recovery. To be sure, the Obama recovery isn’t likely to have the same oomph as the one associated with Reagan—who benefited from a once-in-a-century cut of top income tax rates (from 70 percent to, at first, 50 percent, and then to 28 percent) as well as a huge jump in defense spending at a time when the national debt was much, much less of a burden. But Obama’s potential for Reagan status (maybe minus the airport-naming) is real. Yes, Bill Clinton won two terms and is a brilliant pol bar none, as he showed in Charlotte in the best speech of both conventions. But the crisis Obama faced on his first day—like the one Reagan faced—was far deeper than anything Clinton confronted, and the future upside therefore is much greater. And unlike Clinton’s constant triangulating improvisation, Obama has been playing a long, strategic game from the very start—a long game that will only truly pay off if he gets eight full years to see it through. That game is not only changing America. It may also bring his opposition, the GOP, back to the center, just as Reagan indelibly moved the Democrats away from the far left.

Looking back, of course, the comparison between Obama and Reagan seems -absurd—even blasphemous. There is, to begin with, the scope of Reagan’s reelection, winning 49 states in 1984—-something Obama, in a much more polarized time, cannot hope to replicate. More fundamental is the mythology of Reagan as an unfaltering ideological conservative who galvanized the right and demoralized the left. But the reality of Reagan, especially in his first term, was very different. He was, in office, a center-right pragmatist who struggled badly in his first term, reversed himself on tax cuts several times, was uneasily reliant on Southern Democrats, -invaded Lebanon, lost 265 U.S. servicemembers, and then fled, and ran for reelection with a misery index of unemployment and inflation at 11.5 percent. (Obama is running for a second term with a misery index of 9.8 percent.) Reagan also got major flak from his right wing, as Obama has from his left. A classic excerpt in early 1983 from The Miami Herald: “Conservatives may not back President Reagan for reelection in 1984 unless he reverses what they consider ‘almost a stampede to the left’ in the White House.” Reagan’s Republicans lost 26 seats in 1982, down 13 percent from their previous numbers. That same year, Reagan’s approval ratings sank to 35 -percent—several points lower in his first term than Obama’s ever reached. If you compare Gallup’s polls of presidential approval, you also see something interesting: Obama’s first-term -approval—its peaks and valleys—resembles Reagan’s more than any other recent president; it’s just that Obama’s lows have been higher and his highs lower. Reagan struggled. By his reelection in 1984, he’d been buoyed by a rebirth of economic growth and -lower -inflation—but it was in his second term that he became the icon he remains today.

It was the continuation of economic growth, the collapse of the Soviet Union, and the tax and immigration reforms of 1986 that put Reagan in the top tier of transformational presidents. And the change has been as permanent as any can be in politics. Tax rates in the U.S.—even if Obama’s plans to increase the top rate go into effect—remain in the Reagan range. Clinton himself validated the new low-tax era. Obama cut taxes still further in the stimulus (with no House Republican support). Reagan’s immigration reform, meanwhile, changed the ethnic and electoral makeup of America for generations. Reagan’s fuller legacy came with the crumbling of the Soviet empire in Eastern and Central Europe under his successor, George H. W. Bush. Of course, Reagan didn’t singlehandedly achieve all these things. But he was their enabler.

Obama’s first term looks very similar—two big initial wins, the stimulus and universal health care, that became a liability in the midterm election. Obama’s mid-term crash was worse than Reagan’s, and his opposition far less accommodating. Reagan won 48 Democratic House and 37 Democratic Senate votes for his first signature policy, the tax cuts; Obama got zero and three Republican votes, respectively, for a stimulus in the worst recession since the 1930s. Those are the fruits of polarization. Nonetheless, the administration has soldiered on since 2010, and the tally of achievements is formidable: the near-obliteration of al Qaeda, democratic revolutions in the Arab world that George Bush could only have dreamed of, the re-regulation of Wall Street after the 2008 crash, stimulus investments in infrastructure and clean energy, powerful new fuel-emission standards along with a record level of independence from foreign oil, and, most critically, health-care reform. Now look at what Obama’s second term could do for all of these achievements. It would mean, first of all, that universal health care in America—government subsidies to people so they can afford to purchase private insurance and a ban on denying coverage to people with preexisting conditions—becomes irreversible. Yes, many details of the law would benefit from reform, experimentation, and fixes—especially if Republicans help to make them. But it’s still the biggest change in American health care since the passage of Medicare in 1965.

An Obama victory would also resolve the three-decade-long battle between taxes and spending initiated by Reagan and intensified by the orgy of spending under George W. Bush and the collapse of revenue during the Great Recession. By Dec. 31 of this year, a deal must be struck or the crudest form of government cuts—sequestration of defense and entitlements—will unfold alongside the sunsetting of the Bush tax cuts. Obama’s previous position had been to favor a roughly 2.5 to 1 spending-cut to tax-hike formula, along with a return to Clinton-era rates on the very wealthy. He’s also open to tax reform as a way to raise revenue while minimizing rate increases, as his own Simpson-Bowles commission recommended (after being torpedoed by Paul Ryan). So far, the GOP has refused even a 10 to 1 deal with no revenue increases at all. If Obama wins the election handily, it will be very hard for the GOP to offer the same intransigence on revenue and allow both defense to be cut so crudely and tax increases to go up on everyone automatically. Republicans will have to deal—especially if the chief strategist for their obstruction, Paul Ryan, loses a national election.

Reagan struggled badly in his first term, taking flak from his right wing and running for reelection with the country just emerging from a deep recession.

Or maybe they won’t. It’s always possible that the Republicans will not change; that even if they lose seats this November, the remaining members will be even more intransigent, and from safer seats. But it’s more likely, it seems to me, that a second big loss to a man they have derided as a nobody will concentrate minds. And the threat to the Pentagon could galvanize them. Again, Obama’s long game was designed for this climactic moment. When it became clear last summer that a grand bargain was impossible, Obama cut a deal that would put the Pentagon, the Bush tax era, and popular entitlements simultaneously on the chopping block after the election, a combo, understandably dubbed Taxmageddon, that could very well tip the U.S. economy back into recession. Romney now says he regrets the deal. He is right to. It gives a reelected Obama maximal leverage in a period when a critical decision really has to be made. If the GOP refuses to budge, they lose two of their most treasured policies: big defense spending and Bush’s tax legacy. And they could be blamed for the resulting economic damage. In some ways, Obama’s second term could be fiscally defined by the last two months of his first.

If a grand bargain eludes both sides, there’s still a fallback for Obama: a 1986-style tax reform along bipartisan lines. Obama wants it; Ryan wants it. There will be differences in emphasis, of course—and, for what it’s worth, I favor as radical an overhaul as possible, not simply to make the tax code understandable to everyone, but also to push back against the countless locust lobbyists who get paid a fortune to rig it. Tax reform would also provide a way to raise revenue without raising rates, helping both parties and the economy. Obama would be wise to aim for it—just as Reagan did.

Then there’s immigration reform, an obvious priority for the Democrats and Obama. If the president is reelected it will, in part, be because he’s won a huge majority among the fastest-growing part of the electorate: Latinos. If enough Republicans realize that their future as a party rests on reaching out to that constituency, then there’s a chance real reform could get through the Congress. Under Obama, deportations of illegal aliens are double what they were under his predecessor; and the number of border agents is at a record high. Both give him conservative credibility on the issue, if only the right would acknowledge it. There is a deal to be made here—one that Karl Rove and Jeb Bush would support—and the same one George W. Bush attempted to make. A reelected and recapitalized Obama could seal it—and become a Latino icon overnight.

In foreign policy, where presidents often focus in their second terms, Obama has much less of a security challenge than Reagan did, facing down a global nuclear power with the ability to wipe out the U.S. entirely if it wanted to. Obama’s primary concern is containing the nuclear ambitions of a country (Iran) lacking a single nuclear bomb and with a Supreme Leader who has publicly asserted that detonating one would be a great sin. Obama has imposed crippling sanctions on Iran that are biting the regime hard, severely restricting its ability to sell oil on the world markets. The country’s currency has collapsed and inflation is soaring. Their main regional ally, Syria, is in civil war. We have seen that the regime has threadbare legitimacy with many Iranians, especially among the huge youth generation.

To date, Obama’s response has been like Reagan’s: provide unprecedented military defense systems for Israel, deploy our best technology against Iran, inflict crippling sanctions, and yet stay prepared, as Reagan did, to deal with the first signs of sanity from Tehran. Could Obama find an Iranian Gorbachev? Unlikely. But no one expected the Soviet Union to collapse as Reagan went into his second campaign either, and it had not experienced a mass revolt in his first term, as Iran did in Obama’s. And yet by isolation, patience, allied unity, and then compromise, the unthinkable happened. I cannot say I am optimistic—but who saw the fall of the Berlin Wall in October 1984?

What I’m describing here is a potential, not a prediction. But imagine a two-term presidency that prevented a second Great Depression, killed bin Laden, decimated al Qaeda, reformed immigration, ended the wars in Iraq and Afghanistan, got a bipartisan deal on taxes and spending, and maybe—just maybe—presided over the democratic revolutions in the Arab world with the skill that the first President Bush showed as new democracies were emerging in Eastern Europe. Much of the groundwork for this has already been laid: health-care reform and Wall Street regulation just need time to be implemented fully. The Arab revolutions are in early formative stages. The economic growth that will only accelerate if Taxmageddon is averted will redound to Obama’s popularity the way it did with Reagan. The potential for a huge payoff if Obama is reelected—from the debt to Iran to jihadism to -immigration—is enormous.

The main stumbling block remains the current Republican Party. If the GOP responds to a defeat by lurching even further to the right, Obama will likely fail to match Reagan’s achievements. He needs to persuade a sufficient number of Republicans in the House and Senate that their refusal to compromise on tax revenue at all is partly why they lost, that opposing immigration reform could doom them forever, and that tax reform can be a common and popular bipartisan cause. The GOP has purged so many of its moderates that this may be difficult. But already, as they sense the way the political winds are blowing, some Republican candidates have discovered that a promise to compromise is helping them in their campaigns. When Richard Mourdock, the Tea Party favorite who knocked off Richard Lugar in a primary, says he will “work with anyone” once he is elected, you know the tides may be shifting. Even Tea Party Senate leader, Jim DeMint, has said that if Obama wins, the GOP will have to give some ground on taxes: “We’re not going to save our defense unless we go along with the president’s wishes to raise taxes.” We cannot know what will happen, but there must remain somewhere in the GOP a residual instinct to prefer playing a part in a solution to intensifying the problem for partisan gain—especially with a president they cannot defeat again. But this last gasp of civic responsibility will most likely revive only if the current GOP loses decisively this November. Defeat is the only thing fanatics understand. And defeat is something the remaining Republican moderates can build on. If you are a Republican who wants to see your party return to the center, reelecting Obama is the single most effective thing you can do. Look what Reagan’s success did to the Democrats: it gave us the centrist Bill Clinton. A future centrist Republican president is out there somewhere—but electing Romney-Ryan would strand him or her further out in the wilderness.

I could be dreaming, I know. No doubt, my hope will be mocked as another dewy-eyed, liberal big-media fantasy. But I wore a Reagan ’80 button in high school for the same reason I wore an Obama T-shirt in ’08—not because their politics were the same, but because they were both right about the different challenges each faced, and both dreamed bigger than their rivals in times of real crisis.

The hope many Obama supporters felt four years ago was not a phony hope. We didn’t expect miracles, but a long, brutal grind against the forces and interests that brought the U.S. to its 2009 economic and moral nadir. I’ve watched this president face those forces and interests with cunning and pragmatism, but also platinum-strength persistence. Obama never promised a mistake-free presidency, or a left-liberal presidency, or an easy path ahead. He always insisted that he could not do for Americans what Americans needed to do for themselves. In his dark and sober Inaugural Address he warned that “the challenges we face are real, they are serious, and they are many. They will not be met easily or in a short span of time.”

But in a first term, he ended the Iraq War on schedule, headed off a second Great Depression, presided over much more robust private-sector job growth in his recovery than George W. Bush did in his, saved the American automobile industry, ended torture, and saw his own party embrace full marriage equality and integrate gays into the military. If those liberals who voted for him in 2008 think this is somehow a failure or a betrayal, in the context of the massive crisis he inherited, then they could not have been serious about real change in the first place. But some of us were—and still are. We understood that real change meets real resistance. In fact, you only know it’s real when the resistance is so strong. And the proper response to that resistance is not to fire the president who made this Reagan-like first-term progress in a far worse economic and fiscal climate, but to redouble on the Obama promise, to insist that America’s profound problems can only be addressed by a compromising president making bipartisan deals. And which ticket is likelier to compromise with the other party: Obama–Biden or Romney–Ryan? The question answers itself.

Just as Reagan became an icon only in his second term, Obama needs four more years to entrench and build upon the large, unfinished strides in his first term. That’s why, if you backed Obama in 2008, as a liberal wanting change, as an independent wanting pragmatic solution-seeking, or as a conservative hoping to drag the GOP back from Palin-style insanity, it makes no sense to bail on him now. Because this is when the payoff of the long game really kicks in, when stronger economic growth will put a wind at the president’s back, when a bipartisan deal on debt could lift business confidence and accelerate recovery, when universal health-care reform becomes irreversible and health-care spending is slowed, when the last soldier leaves Afghanistan, when millions of illegal immigrants can come out of the shadows and help build the next economy, and when the spiraling emotions of religious warfare can be calmed, managed, and handled, rather than intensified, polarized, and spread more widely.

This was always Obama’s promise. He has not betrayed it. And we—yes, we—-deserve a chance to fulfill it.
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