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Ireland Calling with John Spain
Ireland Rooting for Obama
November 5, 2008
by John Spain
BE careful what you wish for, you may receive it. That old phrase has been cropping up in my mind these past few days as I watched Barack Obama doing his final round-up, looking chilled and super confident even as he warned his supporters not to take anything for granted.
As I write this column today, Tuesday afternoon, tens of millions of Americans are heading out to vote. And if the polls are to be believed Obama is going to get what he’s been wishing for over the past two years.
He’s not the only one, of course. Millions of Americans have bought into the Obama dream, the promise of change, of a new beginning, of an end to “the old politics,” of a fairer America where everyone will feel better about themselves, their country and the world.
So if Obama wins the election, as he seems set to do, he faces a level of expectation that has never been higher in any election I can think of in modern times, in America or anywhere else.
“Together we can change America, we can change the world,” he has been saying over and over again. And his vast audiences, both at meetings and watching on TV, have been lapping it up, taking what he has been saying literally.
So, when you read this, if Obama is the president, he is going to have to radically change America and even change the world if he is to satisfy those who voted for him. Talk about pressure!
If he wins and takes over the reins of power from President George W. Bush in January, an awful lot of Americans at that point are going to be expecting miracles. They will be expecting instant, painless solutions to problems that are deep-rooted, complex and incapable of resolution without all Americans feeling the pain over a good few years.
The same is true of John McCain, of course, who has also been promising to change Washington and change America. The difference is that the kind of change expected from Obama seems to be much more fundamental and far reaching than anything expected from McCain.
McCain promised to clean up Washington. Obama promised to reshape America and the world.
It’s not that Obama has been more specific about the changes he will make, it’s that his rhetoric has fostered a perception among voters that he will bring in such a degree of change that everything will be different under an Obama presidency.
Now I have been watching elections long enough, mainly in Ireland and Britain, to know that emerging politicians often promise the sun, moon and stars and are sincere about it, but delivering on those promises always turns out to be a lot more difficult than they expected.
It’s not that power always corrupts, it’s that power forces politicians to really face up to the complexities of problems and to realize the full consequences of any decisions they take. Once they’re in there, they realize it’s a lot more difficult than it looks from the outside.
Even in normal times, this is true. But these are anything but normal times.
Instead of making vague, high-minded promises that “Yes We Can” change America and change the world, it would have been much better if Obama (and McCain) had gone around the U.S. for the past few months telling the American people the truth, that there are no easy or quick solutions to the mess America is in and that they are headed into the toughest times that they or their parents have ever experienced.
Whether it’s Obama or McCain is less important than an understanding and an acceptance by the American public of the extent of the problem facing America.
And while it is true that most people in Ireland have been just as enthralled by Obama’s rhetoric as so many people in America, there seems to be a greater awareness of this unpleasant reality here.
America’s elections are always watched with great interest on this side of the Atlantic, and this one has attracted even greater attention than usual. It’s a long time since any election in Ireland attracted the kind of crowds that both Obama and McCain have in this election.
In a way it’s a humbling lesson for us that so many ordinary Americans are so involved in the democratic process. They send in their dollars to support the campaigns, they travel miles to hear the candidates speak in person and they discuss the issues and get involved at local level, putting up posters, campaigning door to door, and so on. The same kind of mass involvement in elections by ordinary people is not seen here, where we seem to be too cynical or too lazy to join in.
Of course our interest in America’s elections has always been grounded in a degree of self-interest. Investment in this country by a succession of American multi-national companies played a significant part in our economic development, and continues to play a major role in our economy.
This year we are even more concerned about that, given the global downturn. But we are also concerned about it because of things that both Obama and McCain have been saying about American companies operating overseas and the taxes lost to the American Internal Revenue Service.
Obama in particular has been talking about making changes in tax regulations that apply to overseas earnings. Corporation tax in the U.S. is 35% and in Ireland it is 12.5%. This is a complex area, but as I understand it U.S, corporations can defer their U.S. tax liability on overseas profits as long as they don’t bring the profits home.
The foreign income is only subject to U.S. tax when it is paid as a dividend or repatriated to the U.S. parent company. For multi-national companies with multi-national shareholders, this is a huge advantage and it is costing the American government billions every year.
If the new president makes changes in this tax-avoidance structure that benefits countries like Ireland we could be in big trouble. In the past year, for example, 90% of all new investment announced by IDA Ireland (the body set up to attract foreign companies into Ireland) came from U.S. companies.
As the phrase goes, when America sneezes the rest of the world gets a cold. But when America sneezes Ireland could get pneumonia.
Of course this is just our problem, and given the state of the American finances no one could blame an incoming president for making changes in this area.
On the wider level, how America solves the economic mess it is in is far more important. The global recession that now threatens the world had its origins in the collapse of America’s financial system, and the first and most urgent priority for the new president will be to guide America, and the world, back towards economic health.
Part of that process may be disengaging from the costly operations in Iraq and Afghanistan, but Americans who think that saving the money is all that matters and that bringing the troops home ends that problem are fooling themselves.
The world is a hugely dangerous place at present, and if democracy and the rule of law are not to be replaced by dictatorship and gangsterism in many parts of that region America and other countries will have to be involved for some time to come. The consequences of not doing so would eventually come home to roost.
On the economy, there is no way of avoiding a lot of belt-tightening in the U.S. for at least the next four years if not the next eight years. So it could be a miserable presidency for Obama if he gets there, with grand plans and no money to implement them.
Revitalizing the American economy, getting government spending under control, balancing the books, starting to reduce the trillions of dollars America is in debt, getting people to be much more productive so they can compete in world markets, encouraging people to lower their expectations and live within their means — it’s not going to be easy.
People will have to work harder and longer for less. That’s what it boils down to. That’s the change that is necessary. Whether it will be greeted by cries of “Yes We Can” remains to be seen.
Above all, it is critical that the new president recognizes that America cannot discover a new prosperity without working with the rest of the world. As one Irish newspaper put it, there should be no succumbing to the temptations of protectionism and isolation.
America needs the world and the world needs America, both in economic and foreign policy terms. And Ireland needs an outward looking, involved America more than most.
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