The Election Will Have a Hard Time Changing US Economic Difficulties

The day of the U.S. presidential election in November is getting closer and closer. With the U.S. economic recovery lacking strength and unemployment rates remaining high, Republican presidential candidate Mitt Romney’s team is aiming at economic problems and manufacturing all sorts of discussion topics, striving to demonstrate the Obama administration’s “incompetence” and hoping to provoke voters’ demands for change with respect to economic difficulties, and then finally realizing its ultimate goal of winning the presidential throne.

Romney displayed the old “beat China” political trick, asserting that he would immediately proclaim China a “currency manipulating country” after entering the White House and letting it be known that he would carry out tough actions against China with regard to trade issues.

American politicians during the “election season” are for the most part unreliable. For the past 10 or 20 years — with the exception of 2008 when, due to the U.S.’ descent into financial crisis, the presidential election unfolded with discussion points primarily revolving around economic issues — policy toward China has always become one of the core topics of discussion. This occurred to the point that some people summarized an American president’s fundamental behavior as: Starting out with a prejudiced ideology before the election, he demands being tougher on China, but once he enters the White House, he has no choice but to consider the countless ways China and America are linked by trade and political relations and in the end adopts relatively pragmatic policies.

Whether or not Romney will be able to enter as master of the White House is still a big question mark, as his proposed trade policy with China is clearly not reliable. Even more important is that, although he wholeheartedly wants the U.S.’ current economic trouble to serve his own goals for the election, speaking practically and realistically, the U.S.’ economic problems have deeper and more complex origins. Even if a true “President Romney” is in office, I fear that it will be very difficult in the short term to change the various problems the U.S. economy is facing.

In the context of the unemployment rate exceeding 8 percent, Romney and Obama both in turn criticize their opponent for outsourcing employment opportunities to countries like China and India, which thereby creates an outward flow of American jobs. But people with even a little economic common sense all know that this is an obvious “fake inference.”

Over the past few decades, modern communication, transportation, distribution and other technologies have developed, allowing globalization to grow deeper and global and cooperation on the industrial division of labor to be more sophisticated, with developed and developing countries beginning to play different roles in the supply chain. China and India, among other countries, benefit from advantages such as lower costs and have started receiving large numbers of jobs diverted from developed countries in the manufacturing and information technology industries. At the same time, the U.S. and other developed nations concentrate on their advantages in fields such as research, brand name marketing and financial services, a tremendous development. From an objective standpoint, this type of labor division causes the low-end manufacturing jobs in America and other developed nations to drain. But fundamentally, this is the most effective method to find capital and the result of the pursuit of maximum profits.

After the financial crisis, the U.S. and other developed nations one by one put forward the “economic reindustrialization” slogan, hoping to reinvigorate the manufacturing industry. But it has to be pointed out that the U.S. cannot rely on “patriotic slogans” to force entrepreneurs to bring factories back to the U.S. Even if China and other nations increase production costs, other low-cost countries like Vietnam will continue to exist. The fundamental way out of this is for the U.S. manufacturing industry to revive through the development of high-end industry and to find more effective production methods, not a “comprehensive war” with China over low-cost labor and labor-intensive industries. In this sense, for both Obama and Romney, criticizing the opponent’s outsourcing of U.S. jobs is nothing more than a stance in this election.

Taking this one step further, after the international financial crisis, U.S. industries and households have all experienced a long and painful process of “deleveraging.” Coupled with the worsening debt crisis in the area of the euro, the U.S. economy is still facing at least three other major issues, including the economic recovery lacking strength, the unemployment rate remaining high and the financial deficit soaring rapidly. None of these problems are caused by the Obama administration’s policies, and none of them can be easily resolved by the possible future “President Romney.” In a word, perhaps mastery over the topic of economics is capable of becoming a major deciding factor in the U.S. presidential election, but no matter who is elected, the U.S. economic difficulties are incapable of being solved in the short term.