The Hermanator Experience

I've been meaning to write about Herman Cain for a while. As a black Republican businessman, he seemed out of place in the Republican Presidential race, but he always spoke with precision and confidence. Even before his Florida straw poll victory, I thought he was making a strong run as a potential Vice Presidential candidate. Needless to say, I learn more about an issue or a person when I write about them and I have to do the research.

So let's start off with a little background; unlike the rest of the candidates, Herman Cain has no experience in political position. He's a career businessman:

Cain, 65, grew up in Georgia and graduated from Morehouse College. He became a turnaround artist, rescuing the Burger King outlets of Philadelphia. From there, he went to Omaha, where in 1986 he took over and stabilized Godfather’s Pizza with clever advertising and aggressive downsizing.

By the early 1990s, Cain had started to transition out of day-to-day management at Godfathers and delve into politics. In 1992, he was appointed to the Federal Reserve Bank of Kansas City. In 1994, he became head of the National Restaurant Association, a post he held for five years.

He's a turnaround specialist, something he's highlighted in all the debates. The US is in need of a turn around, and he feels he's the best man for the job. This isn't the first time he's run for office. He ran for President in 2000 and he ran for Senate in 2004. Despite those failures, he left an impression:

But despite his lack of political success, he managed to attract the notice of a radio executive with his rich, booming voice. His campaign manager became his producer. He trademarked the expression “The Hermanator Experience.”

The two main talking points of his campaign have been the 9-9-9 tax plan he wants to institute and the Chilean social security model he wants to implement.

The 9-9-9 plan will be hard on the lower and middle classes (check out the article in the side bar, worth a full read):

Most economists agree that a national sales tax would raise the relative tax burden on low- and middle-income earning taxpayers. "The main reason is that low- and middle-income households consume more of their income than high-income households do," said William Gale, senior fellow for economic studies at the Brookings Institution. "Another way of saying that is high-income households save more of their income than low-income households do."

Basically, if all people consume the same amount of taxable goods and services, if you have a lower income, whatever is taxed is going to be a higher percentage of income.

His whole system will make the lower classes pay more while the upper classes pay less. Now, I've already said that taxes need to be lower for the US to be competitive, but I don't think it makes sense to increase taxes on people who already are having trouble making ends meet. Yes, you want a society that encourages economic advancement, but you also need a minimum standard of living across the board. This is the United States where we tout our economic opportunity and high standards of living. Instituting a national sales tax is a straightforward attack on the lower classes.

One of the things that I've been interested in is the viability of the Chilean Model:

But while the reform's supporters argue it has been a major success story, officials both inside and outside Chile now increasingly question whether the high costs and modest investment returns have doomed Piñera's original promise: a decent retirement income for workers at a savings for the government.

Social Security has come under fire because of the uncertainty surrounding its future. The government has misappropriated funds, so this would be another way of protecting individuals. The problem is that it doesn't provide enough income for the retired:

A recent report by the Chilean government brought more grim news, forecasting that as many as half of all workers won't be able to save enough to receive the minimum pension when they retire—even after paying into their accounts for 30 years—and will therefore rely on government subsidies. More than 17 percent of Chile's retirees now continue working because they can't afford to live on their pensions, according to that study, and another 7 percent want to work, but can't find jobs.

Despite this, the model has been praised and used as the basis of models in other countries. I think it is important that someone takes a greater look into this and challenges Cain in the next debate. He can't tout a program that doesn't get real results. Praise is one thing, results is the real thing.

There are further mathematical challenges with the program:

Here’s the problem: To finance benefits at promised levels for those 55 or older, we would need to continue to collect payroll taxes from today’s working-age population. However, we would also propose to divert a significant share of those payroll tax into personal accounts. In effect, we would be trying to spend the same dollar twice, and we would do it trillions of times.

This doesn't seem like a worthy endeavor considering our country's tricky financial situation.

One thing is for certain, he is very confident:
And he'll need it because his Florida win has brought him under fire as people begin to think whether he is a viable candidate for Presidency or not. It's uncertain whether his tax plan will work:

"I don't understand how the 9-9-9 plan -- which includes both a national sales tax and an income tax while purporting to repeal the 16th Amendment at some point -- can be taken seriously by anyone who feels we are already overtaxed," said Andrew Nappi, director of the Florida 10th Amendment Center.

And has it been vetted:

Zimmermann, a Romney supporter, said, "I don't know anyone who has vetted the 9-9-9 proposal and confirmed it as a viable plan."

There are other things threatening his campaign:

Top aides in Iowa and New Hampshire quit earlier this year, saying Cain wasn’t taking the early states seriously. One former staffer recently alleged that staff members tried to cover up the role of a gay campaign adviser. He refuses to name the economic advisers who helped come up with his plan. In May, Cain said he couldn’t talk about foreign policy until elected.

That makes me believe that he hasn't taken himself seriously up to this point. If he really wants to make a run for this, he will aim for the transparency necessary to be a viable candidate. Until then, Herman Cain will be a bump in the road for the front runners. You cannot ignore potential skeletons in your closet and run for president. You will have people make you reveal that information as you rise a legitimate candidate. You should do your best to be prepared.

Now that Cain has one Florida, he best be prepared. He's been shooting for the stars; now the stars will be shooting back.