Herman Cain is a self-made black millionaire, perhaps by definition a successful businessman, and an energetic and charismatic figure. These are certainly things to recommend Cain, who officially got into the race Saturday, among the increasingly crowded field of Republican presidential hopefuls.
However, Cain’s appearance on Fox News Sunday with Chris Wallace and left an impression of a man who needs better advisors, better information, and better answers if he wants to be a serious contender for the GOP nomination.
The first part of the discussion centered in dealing with American public debt. Cain offered “the Cain plan”: pay the debt, pay the interest on the debt first. Make sure we take care of our military and their families. Make sure the people that are getting paid for Social Security checks that they get paid. And then, lastly, make sure that people’s Medicare bills get paid, followed by cutting spending wherever possible.
Although superficial, this plan isn’t ridiculous. The problem is that Cain was led by Wallace’s questioning to conclude that “the Cain plan can’t work now,” because our government has waited too long to deal with the issues. That may or may not be true, but is a presidential candidate really beginning a Sunday talk show with a plan for America’s biggest issue that he then says within two minutes “can’t work now”? If it can’t work, then why is it your plan?
A quick note on the discussion: Wallace asked Cain (though not in the form of a question) “That’s going to mean a lot of serious cuts for people while paying we’re paying the Chinese creditors first.” Cain’s response was partially correct: “Yes. If we don’t pay the Chinese creditors first, the amount of interest we have to pay will go up. I am sure that there are penalties in there if we don’t pay it on time.”
I am not sure there are penalties as Cain describes; I really don’t know, though I’d be surprised for the U.S. government or its creditors ever to have worried about default enough to put penalty provisions in our debt’s terms. And Cain is right that not paying the debt would cause interest rates to go higher.
But Cain missed what I thought were a couple of big points: First, the implication that the decision about paying interest on our debt should consider as a factor which nation has lent us the money is reprehensible. It doesn’t matter if the creditors are Americans, Chinese, or Martians. Nothing should come before paying our national debt obligations, just as nothing comes before bond holders in private finance (unless you’re a bond holder of an automobile corporation during the Obama Administration in which case you come after the unions.)
If we didn’t pay interest based on who it was we owed money to, few foreigners would ever loan us money again, meaning that interest rates would skyrocket and the U.S. economy would crater as the government had to borrow much more domestically.
The other point Cain missed was to call Wallace on his assertion that China owns a huge amount of our debt. One might thing based on the way Wallace and others talk that China owns a majority of the U.S. debt. As of the end of 2010, fifty-three percent of U.S. debt was owned by Americans, whether individuals, the Fed, pension funds, or other investment entities. Foreigners own less than half — though not much less — of our public debt. China itself owns 9.8 percent of the debt, Japan just behind at 9.6 percent, and then England just over 5 percent.
In other words, less than 10 percent of our interest payments go to China, and we have to stop allowing talking heads and politicians demagogue China for being willing to loan us money at low interest rates. Our government, not the Chinese, is the problem, and including a recognition of this would have made Cain’s answer much better.
Wallace quoted Ben Bernanke, who said that interest rates would go up if we paid the debt but not certain other things. Cain said that Bernanke is “absolutely right.” I think that’s not right, or at least far enough from being proven to be called “absolutely right.” It’s entirely plausible that markets would see American budget cutting as the first bit of good financial judgment from the US in at least two decades and react by maintaining or even lowering current low rates.
I don’t like Cain’s support of a Fair Tax, though to be “fair” at least he seems to understand what he’s supporting. (I much prefer a flat income tax.) Still, it’s a difference of opinion and I don’t hold it against him as much as these other items.
I was unimpressed with Herman Cain’s response to Chris Wallace’s question about the Palestinian “right of return.” Cain clearly didn’t understand what the term meant, and then when it was explained to him he gave a confusing answer. On the one hand, Cain did emphasize repeatedly and correctly that issues between Israel and the Palestinians must be negotiated between them and not by third parties. But the “right of return” is one of the three biggest issues in the debate (along with borders and the status of Jerusalem, with the former of course the biggest hurdle.) And Cain’s statement that “I don’t think they have a big problem with people returning” again shows an extremely superficial connection with a huge foreign policy issue.
Similar, and perhaps more disturbing, was Cain’s response to a question about Afghanistan. It’s not as if this is a new war that nobody’s had time to think about. Cain didn’t offer any substantive view of American strategy or tactics in Afghanistan, saying after repeated prodding “The right approach is: the day I’m elected president, I will start on that plan such that the day I was sworn in, I will be able to implement the plan.” Wallace tried to follow up: “But that doesn’t tell anybody what you’re — I mean, do you support counterinsurgency or counterterrorism?” Cain again dodged: “Chris, let’s go back — let’s go back — let’s go back to the fundamental question. We’ve got to work on the right problem. I think it is disingenuous to tell the American people what I would do when I don’t have the intelligence information. I don’t have all of the factors that are affecting this particular situation.”
In other words, the blandest of evasive talking points. If Cain were a front-runner, perhaps he could get away with something like this on an issue…on one issue.
But on Sunday, Herman Cain offered a plan that he says “can’t work now”, bought into important erroneous implications and claims by his questioner, showed a lack of understanding of an important Middle East issue, and then offered absolutely nothing about a war that last year became the longest war in American history.
I’m all for political novices, especially someone like Herman Cain (black, self-made, fairly charismatic) getting into major races. Although I do place some value on political experience when running for president, experience is less important than wisdom, intelligence, and judgment. Unfortunately, Herman Cain simply didn’t demonstrate those things on Sunday. If Cain can’t raise his game, and quickly, he’ll soon be another also-ran among the Republican field.