What an Obama Presidency will Mean for the Bahamas and the World

by Larry Smith

With only a week to go before the election, Barack Obama has taken a significant lead over John McCain among American voters. But in the rest of the world he has been a shoo-in for months.

In Europe, millions of disenfranchised voters are eagerly awaiting the end of the reviled Bush regime, which is likely to go down in history as America's most unsuccessful presidency.

Last month, the annual transatlantic trends survey said 69 per cent of Europeans favoured Obama over McCain, and almost half expected US relations with Europe to improve if Obama is elected. And we won't even mention the fervent support for the Illinois senator among Bahamians.

According to a poll last summer by the London Daily Telegraph, more people in France, Germany and Britain view the United States as a “force for evil” than for good in the world - an unfortunate sentiment that is the result of eight years of in-your-face unilateralism under President George W. Bush.

This year's Pew survey of global attitudes (which polled more than 24,000 people in 24 countries) found a widespread belief that US foreign policy "will change for the better" after the inauguration of a new president next year. And people are much more confident in Obama to do the right thing regarding world affairs.

Election Odds
But until the financial meltdown changed the game, it was not at all clear that Obama would prevail. An aging military hero paired with an attractive moose-hunting woman seemed to have more appeal to red-blooded Americans than a brown-skinned young lawyer with a foreign name who could easily be depicted as un-American in the traditional sense.

Now, pollsters say the odds of McCain overtaking Obama in the final week of the campaign are "incredibly remote". Apparently, no presidential candidate has ever been as far behind as McCain at this stage in an election and won.

In fact, millions of Americans will have already voted by the time election day rolls around. Thirty three states now allow voting by mail or in person ahead of election day as a matter of convenience, and they may have already locked in Obama's lead. Yet just a few months ago, the idea of someone of African ancestry occupying the White House was almost inconceivable to most folks.

The McCain campaign seems to agree with the pundits. According to them, Michelle Obama is already choosing the drapes for the White House while her husband is planning how to tax and spend hardworking Americans to death.

So what are the major policy differences between the two candidates? Which one can be expected do the right thing in world affairs? And what impact could the policies of either have on the Bahamas?

Tax Policy
Although McCain has tried to label Obama a tax-and-spend liberal, and his 'proud-to-be-a-redneck' running mate insinuates that he is a crypto-communist, the fact is that both candidates have proposed tax plans that would substantially increase the US national debt over the next 10 years, according to the non-partisan Tax Policy Centre.

They are both proposing to cut taxes for most American families, but Obama gives the biggest cuts to those who make the least, while McCain would give the largest cuts to the very wealthy. For the 147,000 families that make up the top 0.1 per cent of the income scale, McCain offers a $270,000 tax cut, while Obama would raise their taxes, on average, by over $700,000.

Both candidates will collect nearly $3.6 trillion less than under current tax law over the coming decade. Against that baseline, Obama would raise revenues by about $600 billion over the next decade and boost the national debt by $3.5 trillion, while McCain would lose $600 billion in revenue and increase the debt by $5 trillion - on top of the $2.3 trillion increase that the Congressional Budget Office forecasts through 2018.

The bottom line is that Obama’s plan will reduce tax revenues to below the levels that prevailed under Ronald Reagan in the 1980s (less than 18.2 per cent of GDP), while McCain would go further and cut revenues to around 16 per cent of  GDP.

Offshore Finance
Last year, Obama was part of a bi-partisan effort to pass a bill to stop Americans from using offshore financial centres as tax dodges. If passed, the law would allow the government to take special measures against tax havens and financial institutions that impede US enforcement efforts.

Experts say the US Treasury loses $100 billion a year because of offshore tax evasion. Obama cites this as a basic issue of fairness and integrity, arguing that those who work hard and play by the rules shouldn't be disadvantaged. McCain has opposed cracking down on tax havens, but he has also spoken out against offshore banking practices. He advocates cutting tax rates in the US to make moving offshore less attractive.

Eight years ago, the Bahamas and 14 other countries were placed on an international blacklist for being 'non-cooperative' in preventing money laundering. In mid 2001 - after hastily revising our regulatory laws - we were taken off that list.

But we were also blacklisted by the Organisation for Economic Co-operation and Development as one of 35 tax havens that engaged in "harmful tax competition" with rich nations. After agreeing to exchange information with overseas authorities in criminal and civil tax matters, the Bahamas was removed from that list in early 2002.

The intensity of American support for these global regulatory initiatives has fluctuated over the years, but it is generally agreed that a Reagan administration Treasury official started the ball rolling in 1981. The OECD attack on tax havens enjoyed the full support of the Clinton administration, while the Bush administration sought to soften the assault.

It is unclear what impact Obama would have on the Bahamian financial sector given the fact that we already have a tax information exchange treaty with the US, but some argue that we will face an "uncomfortable environment."

Dr Dan Mitchell, the Cato Institute's chief tax expert, will be lecturing on this subject a day or two after the US election at an event sponsored by the Nassau Institute. Mitchell opposes any US attempt to "persecute" low-tax jurisdictions like the Bahamas.

Energy Policy
Both candidates have outlined farsighted energy policies and are committed to international cooperation on global warming - something the Bush administration refused to contemplate.

McCain has said he would work to reduce carbon emissions by 60 per cent below 1990 levels by 2050. Obama calls for an 80 per cent reduction over the same period using a market-based cap-and-trade system.

Obama's plan would also invest $150 billion over the next 10 years and leverage billions more in private capital to build a new energy economy and reduce demand for electricity by 15 per cent by the end of the next decade.

Both Obama and McCain would give incentives to industry and consumers for new fuel-efficient vehicles and invest in renewable energy technologies. Obama says he would require 10 per cent of US energy to come from renewable sources by the end of his first presidential term, while McCain says he would change the energy landscape by building 45 new nuclear power plants by 2030.

But in contrast to McCain, Obama's voting record has been solidly behind the renewable energy industry. A Senate effort last year to extend an investment tax credit around solar and wind energy projects failed to pass by one vote; and McCain did not vote.

It is clear that either candidate will represent a seismic shift in energy and carbon reduction policies when compared to the Bush administration. And we can expect this new emphasis on renewable energy and climate change (no matter who is elected) to stimulate our thinking and behaviour in the Bahamas.

Foreign Policy
But it is in world affairs that Obama's role as a "transformational figure" (to use Colin Powell's phrase) is likely to have the greatest impact. As Zbigniew Brzezinski (Jimmy Carter's national security advisor) put it:  "Obama is more likely to make the choices that will contribute to a reduction in hostility to the United States...He understands the historical novelties of the moment."

McCain comes from a long military tradition and - unlike George W bush who used his connections to serve at home in the National Guard, or Bill Clinton who opposed the Vietnam War (but didn't inhale) - he was a gung ho Navy pilot and POW. As a strong supporter of the war in Iraq, he is even more belligerent on some issues than the current president - the recent Russian invasion of Georgia being one example.

Brzezinski's recent book (America and the World, which he co-authored with Brent Scowcroft, who was national security advisor to the first president Bush) reviews the challenges confronted by America in a rapidly changing international environment, and underscores the importance of choosing a leader who can deal with those issues at what could well be a hinge moment in modern history.

The language employed by President Bush, and the unilateralist behaviour of his administration, have alienated friends and aggravated resentments in many parts of the world. And not only is Bush the most disliked American president in generations (with hardly a foreign policy achievement to his credit), he has made the Republican Party - once though to be on the crest of a wave - deeply unpopular also.

In terms of party identification, the GOP is 15 per cent down compared to the Democrats, and losing younger voters in droves, according to New York Times columnist David Brooks. Even Scott McClellan – Bush's first term White House spokesman - says he will vote for Obama. And some experts believe that voter turnout could be higher than the 64 per cent recorded in 1960, which was the highest in recent US history. And the result could be similar to 1964, when Lyndon Johnson was elected in a landslide.

Partnership for the Americas
As for regional expectations, an Obama presidency would be "a breath of fresh air" according to Trinidad Prime Minister Patrick Manning, who will host the next president to a 34-nation Summit of the Americas in Port of Spain next April. But his administration would be unlikely to break much new ground in concrete terms.

In his Partnership for the Americas policy statement, Obama concedes that US relations with the region have "frayed, as the Bush administration pursued a misguided foreign policy with a myopic focus on Iraq". He says America has been "negligent to our friends, ineffective with our adversaries and disinterested in the challenges that matter to peoples’ lives".

He promises to pay more attention to the region by reinstating a special envoy for the Americas. And he vows to liberalise relations with Cuba, engage with Venezuelan President Hugo Chavez, close the Guantanamo prison, give more aid to Haiti, help the region invest in renewable energy, and expand cooperation on crime and drug trafficking.

Perhaps more significantly, an Obama presidency will be in a position to reform the world's financial architecture in the wake of the current economic turmoil. This could even lead to a full-fledged United Nations conference on global economic governance, which the Bush administration has tried to head off by agreeing with key European leaders on a quick conference in mid-November with limited participation.

According to a recent statement by the Group of Eight rich nations, the November meeting will discuss "changes to the regulatory and institutional regimes for the world's financial sectors (that) are needed to remedy deficiencies exposed by the current crisis."

There have been many calls for a new conference to rethink the international monetary and financial system that was put in place by the Western Allies at the end of the Second World War in Bretton Woods, New Hampshire. And many argue that the November meeting in Washington should only begin this process.

As Zbigniew Brezinsky said in a recent BBC interview, the future must be guided by a "more intelligent, more accommodating and more conciliatory" American leadership.

"Obama understands what is new about the 21st century. McCain is rooted almost entirely in the 20th century. So what does that mean in terms of being responsive to our time?"

For historical reasons, in terms of what it will mean for American society and for the international community, we look forward to an Obama presidency.

Comments

[5]

Can Mr. Obama truly live up to "Obamarism" and all the hopes, dreams, wishes, and flecs of idealism inculcated in it's very conception?

Can the hue-man live up to the human expectations leveled towards him... the inhabitants and actors of history have not been too kind to "great-hopes" regardless of their suave words and classy demeanour.

[larry smith]

You are right. He has a lot to live up to. Only time will tell.

[ejr]

"...he vows to liberalise relations with Cuba, engage with Venezuelan President Hugo Chavez, close the Guantanamo prison..." -- wow. Those three things alone should make all Bahamians shudder with fear.

An openly accessible Cuba will not just cripple us, it will amputate our tourism reliance on a U.S. market at the hip that will leave us on our face for 10 years or more.

Chavez is a dangerous egomaniac whose human rights violations are shocking -- for his brazenness and for the fact that so many people in the region don't accept their reality. (Hmmm...sounds like the past and present ignorance of so many regarding Saddam). For Obama to think that the U.S. (and the Bahamas, which has been repeatedly touted) should even consider snuggling up to Chavez is incredible.

Guantanamo Bay is, in my opinion, an important defensive position for the region and particularly the Bahamas. Should there be any Caribbean-based hostilities (see above) Gitmo can serve as a base of defense that would well benefit the Bahamas. I think losing that would be a disadvantage for us.

There are many other reasons I think an Obama presidency would be a bad thing ('redistribution of wealth' being one), but at this point it seems inevitable.

Will the world come to an end because of it? Nah. Well not for a few months anyway. ;-)

Great article.

~ejr~

[larry smith]

Actually, both candidates have said they will close Guantanamo prison. Engagement with Venezuela was meant in the same sense that Obama would engage with Iran - in the same way that Nixon engaged with Mao's China. And I guess I should have noted that Obama does not propose to remove the embargo on Cuba.

Finally, the US has had a progressive tax system for a long time, and from the information I presented it is clear that Obama's tax plan is not much different from anyone else's. And since we are not Americans, it is neither here nor there.

[Erasmus Folly]

Closing Guantanamo isn't about a military position - to ejr. They are talking about closing a prison, not surrendering a military base. Those are two very different notions - don't be confused. Furthermore, the USA has things called air craft carriers, war ships and fighter planes... the short trip from Floria to anywhere in this region is laughably easy... long gone are the days where Gitmo was of strategic military significance, nevertheless, closing it is not on the table in terms of its status as a military base.

The question of Cuba, from the American perspective, cannot be looked at through the very simple and selfish prism of Bahamian interests. While I would love that the status quo of Cuba continues, for our own economic interests, the truth is, the Cuban people suffer greatly and engagement is the best policy for long term peaceful change.

Finally, on Chavez, he is a crazy egomaniac, I agree, but Obama will have a much easier time negotiating with him at the beginning of his Presidency, mostly because oil prices have fallen so dramatically recently and that reduces Chavez's leverage, power and flexibility vis a vis the USA. The USA needs good, cheap oil and getting Venezuela back on board as an ally, rather than an adversary should be a top priority. We need to stop giving petrodollars to 'real' potential threats like the Islamic regimes and Russia. Venezuela will never be a major military threat to the United States. I say do business with the devil you can laugh at, not the one you might have to fear.

[larry smith]

Erasmus is right - the US maintains Gitmo for political reasons.

[Willie]

I agree, Obama is the right choice for the times. He is PRESIDENTIAL. The Bahamas has been through the cleaning up of our Offshore Financial Services so we can't be hurt there. With aging baby boomers, America needs a better health care system and the Dems will do that better. The Dems also care more about keeping American jobs at home than the GOP which loves to send jobs elsewhere so shareholders earn more and pay less taxes while the poor get poorer. John McCain has abundantly demonstated his inability to handle any crises. Who would hire or vote for the person who graduated at the bottom of his class. Its time for change. Go Obama/Biden!

[ejr]

@Larry: Obama's own stated intention is to remove the embargo on Cuba. I cannot find the article I read with his more recent statements on that topic, but in this 2004 video (http://www.youtube.com/watch?v=cZ3SVok9g34) he says: "I think it's time for us to end the embargo in (on?) Cuba." He goes on to explain that the embargo has "failed to provide the sorts of rising standards of living and has squeezed the innocents in Cuba, and has utterly failed to overthrow Castro". (Has anyone anywhere thought that the embargo would raise the standard of living in Cuba? lol) He has said this more recently as well -- seems clear what his intention is.

@Erasmus: The "very simple and selfish prism of Bahamian interests" are the things that matter most to the Bahamas and Bahamas' economy. Your comment would seem to imply that for a country to hold its own interests first is "simple" and "selfish". I say, to act otherwise would be national suicide.

That said, the people's suffering and oppression in Cuba are indisputable and terrible; to suggest that holding our own country's economy up as of great importance TO US is to therefore minimise or overlook those offenses is just argumentative foolishness.

I misread Larry's original statement regarding Gitmo -- missed the PRISON part. No confusion about what a prison is and what a naval base is -- I misread it. Sorry 'bout that.

But, @Erasmus: Gitmo is a NAVAL base and has been for over 100 years. Naval bases are places where those things called aircraft carriers, warships and aircraft can be deployed from. And those things called aircraft carriers, warships and aircraft still call there today, even though its more common role now has more to do with immigration issues than anything else. Gitmo, as a naval base, CAN be a important defensive base that CAN be of benefit to the Bahamas, if the need arose. IF the NAVAL BASE was closed, that wouldn't be good for the Bahamas, IMHO.

If Obama can get "Venezuela back on board as an ally" maybe *I'LL* start believing he is THE ONE!

~ejr~

[ejr]

@Willie: Care to share any of the abundant examples of John McCain's inability to handle any crises?

I wonder: who would hire or vote for someone sorely lacking experience in the area of business one hopes to lead in? Bring all the grades and degrees you've got, but I'd take someone with actual relevant experience any day over someone with a university degree and only peripheral real-world, practical wisdom.

~ejr~

[ejr]

@Larry: 'progressive tax system' is one thing that I generally agree with -- and you're right, the finer details of the candidates' tax plans are not significantly different. But Obama's past comments that explain what he means by the term "spreading the wealth around" have very little to do with the current U.S. tax system.

http://www.youtube.com/watch?v=iivL4c_3pck

I wasn't commenting on the tax system itself, but on what is behind Obama's view on taxes; I believe that is relevant in a discussion about Obama's philosophy of government's role in American society.

~ejr~

[Erasmus Folly]

@ejr
1. While the USA may want to keep Gitmo for naval purposes and it will, given that neither candidate is talking of ending the US lease on Guantanamo Bay, having Gitmo as a base is more of a military luxury than a necessity in the modern era. It would be naive to assume that the USA wouldn't completely militarily dominate the Caribbean without the continued possession of Gitmo. The key utility in keeping Gitmo is the strategic leverage it offers vis a vis the Cuban regime. It is a massive proverbial thorn in their side. With one US aircraft carrier parked in Caribbean waters, there isn't a single Caribbean government that would stare down Uncle Sam - not even a Gitmo repossessing Cuba. That was my only point about not needing Gitmo either way.

2. Selfish and simple national interests are nevertheless national interests and there is nothing wrong with that - all countries have them. I think I made that quite clear in my first post. The problem for the Bahamas is that we dangerously assume that American policy to Cuba will continue. We should be operating on the assumption that it could end tomorrow - and prepare for that inevitable outcome. Our selfish and simple national interests need to account for a 'bigger picture view' of the reality of the situation. Otherwise, we will wait and wait and then go into 'crisis response' when Cuba opens, rather than having prepared for it. Our politics is reactionary always, we need proactive politics if we are going to survive the challenges of the 21st century.

3. I think Obama has a better chance of negotiating with Chavez than Bush/McCain did/would. I say that because he provides an opening for a different dialogue on what was once a very strong trading relationship. I don't think Chavez can be pacified easily, but I think that the confrontational approach the Bush administration has taken has enabled Chavez to play the big man. If the approach is more businesslike and less ideological, it reduces Chavez's ability to paint the USA as this 'great capitalist evil' etc, etc. Obama should aim to secure Venezuelan oil for the United States and then aim to contain/manage Chavez - not confront him. The Chavez phenomenon can only be dealt with by Venezuelans ultimately. Their internal wealth inequality is very real and staggering and Chavez taps into that political force. The rejection of that movement has to be organized by centrist and conservative Venezuelans pointing out that Chavez is hypocritical in the extreme. Outside US interference simply fuels the Chavistas.

[larry smith]

Just for clarification...

On Cuba, Obama said last year that he would lift restrictions imposed by the Bush administration in 2004 and allow Cuban-Americans to visit their relatives more frequently, as well as ease limits on the amount of money they can send to their families.

He called for the embargo to be lifted (like a lot of other mainstream politicians have) during his Senate race in 2003).

The embargo is maintained by the electoral pressure of the Cuban-American community in Florida. However, many observers say that generational changes are softening the Cuban-American attitude.

There is no question that the embargo is an anachronism of the highest order. In my view it should be lifted by negotiation, which means the US must engage with the regime (as it did with Russia, China and Vietnam).

The impact on the Bahamas will depend on conditions at the time, but it is something we should prepare ourselves for. I wrote an article on this subject in 2006 (http://www.bahamapundit.com/2006/08/how_castros_exi.html#more)

On Gitmo - whether or not the US maintains its leased naval facility at Guantanemo will depend on the broader American engagement with Cuba.

The "perpetual lease" was signed in 1903 as a consequence of the Spanish-American War, which helped Cuba achieve independence from the Spanish empire (a 1934 treaty reaffirmed the lease). The US pays $4,085 a year, which the Cuban government has refused to accept since the 1959 revolution.

The lease - and the embargo - are Cold War issues that have remained frozen in time, much like the Castro regime itself.

What would our position be if the US refused to vacate or negotiate the AUTEC base on Andros? It is something that just wouldn't happen in normal circumstances.

[larry smith]

As regards the right-wing strategy to label Obama a secret communist, this is simply another version of the failed campaigns to identify him as a Muslim or non-American, in my view.

The Financial Times, the respected London-based business daily, has endorsed Obama, even though it prefers the trade policies of John McCain.

Obama's key advisors include Zbigniew Brezinsky and Anthony Lake (former US national security advisors) and Susan Rice, a former assistant secretary of state.

He has been endorsed by former secretary of state (under Bush) Colin Powell, Scott McClellan, Bush's first term White House spokesman, and Ken Duberstein, Ronald Reagan's White House chief of staff. Not to mention former presidents Jimmy Carter and Bill Clinton.

These people are all close observers of political and world affairs - to say the very least.

Prominent economic/financial experts who support Obama include Paul Volcker, Chairman of the Federal Reserve 1979-1987, Dan McFadden, 2000 Nobel laureate, Robert Solow, 1987 Nobel laureate, and investor Warren Buffet, the richest person in the world.

And who do you think contributed the $600 million that the Obama campaign raised anyway - the Socialist Workers Party?

Of course, all these people could be part of a massive communist conspiracy too!

The following YouTube clip puts the "redistribution" allegation in context.

http://www.youtube.com/watch?v=v34yRmKPnDQ&feature=related

I mention these endorsements not to promote Obama, but to discredit this type of election propaganda. It should not be part of a legitimate democratic debate.

[Rick]

Presumably the Democratic line that McCain is simply another George Bush is fair rhetoric among other things?

Politics is what it is. Each side pulling each other apart.

I do not like either candidate as they are both promising to solve every problem faced by every citizen of the US. Raising expectations far beyond reasonableness, and I think it will be a problem for Obama after he wins.

Obama is no doubt much smoother than McCain and could win you over on that alone. I share doubts about his ideology as other people doubt McCain's.

Socialised health care, his stated goal, is bad enough in itself. But McCain's $5,000 tax rebate for health care is virtually the same thing.

One thing for sure, I'll be glad when it's all over next week.

Then whoever wins I'm sure they will wake up and say to themselves; "Ahhhh! What have I done?"

PS. I don't think any taxation is progressive.

[larry smith]

Branding Obama as a Muslim, a non-American, a black nationalist, or a secret communist is hardly in the same league as saying that McCain voted with George Bush 90 per cent of the time.

The intent of the Obama bashers is to make out that he is un-American - in other words, a traitor. I doubt that supporting Bush could be considered un-American.