Wednesday, October 27, 2010

Why Obama Will Be Reelected

The midterm elections are over. The Democrats will incur serious losses, just as predicted. The Republicans will gain control of the House of Representatives while making significant inroads into the Senate.

Things look bleak for the Democratic Party and, by extension, for President Barack Obama. If one listens to the expounding of so-called experts, it’s hard to not walk away with the opinion that he is destined to lose his reelection campaign in 2012.

This assumption, like so much else that can be found under the category of “conventional wisdom”, is much more conventional than it is wise. As I see it, Obama has a very strong chance of being reelected, for a reason so simple that it can be explained in twelve easy steps.

The first five consist of basic facts about the economy:

1. Republicans did well in the midterm elections because Obama was blamed for the poor economy – and not, as they’d like to believe, because their party or their right-wing beliefs have become popular. Evidence of this can be found everywhere: approval ratings for both major political parties are in the dumps, Americans are still found to hold liberal views on a wide range of issues, and, most significantly, polls found that an overwhelming majority of voters considered the economy to be the most important issue. As James Carville once so memorably put it, what matters in times of recession is not ideology or partisan zeal, but “the economy, stupid.”

Right now, unemployment is hovering between 9% and 10%. In order for the economy to be considered in a state of recovery, unemployment needs to consistently drop by at least 0.3% per month for several consecutive months. For it to be actually healthy, it needs to remain between 3% and 5%.

The way to reduce unemployment is through stimulus spending that pumps into the economy whatever amount of money is needed to compensate for the lack of GDP growth. In this recession, the amount necessary to achieve this result is roughly $2 trillion.

The economic legislation that Barack Obama passed in February 2009 contained only $500 billion of stimulus (as well as $287 billion in tax cuts), since he was afraid that asking for more would prompt conservatives to accuse him of socialism (which, of course, they did anyway). That said, while the stimulus was too small to cause a decline in unemployment, it was large enough to prevent it from rising any further. Prior to its taking effect, unemployment had shot up from 6.2% (where it was the financial meltdown occurred in September 2008) to 9.4% (where it was when the stimulus began to have an impact in May 2009). Had it continued at that rate, unemployment would have reached between 16% and 17% today. Because of Obama’s stimulus, however, it has steadied out, hovering between 9% and 10% for the last year-and-a-half.

The stimulus is going to wear off in 2011, and when it does, unemployment will again start to grow.

The next four steps involve what will happen due to the Republican control of Congress:

6. As unemployment rises, Obama will have to ask Congress for more stimulus and other job creating/saving measures.

Because Congress will be dominated by Republicans, and because Republicans are lockstep in their opposition to stimulus spending and all other liberal economic initiatives, there is little doubt that they use their power to stop every aspect of Obama’s agenda.

In addition to this, Congressional Republicans are determined to enact spending cuts in a wide range of other areas, many of which will force government agencies to lay off workers and compel private entities which depend on state subsidies to let employees go. These actions will also cause unemployment to rise.

Finally, Congressional Republicans have made it clear that they will refuse to work with President Obama on any significant issue, much as they were intractably hostile to President Clinton back in the 1990s. With Clinton, this implacable hostility led to a government shutdown and a trumped up impeachment hearing; while we can’t know what their end result will be with Obama (a government shutdown seems very possible, an impeachment proceeding less so), it is safe to assume that it will be similarly explosive in scope.

The final three steps explain how the first nine will lead to an Obama reelection:

Because the economy will have significantly worsened as a direct result of Republican actions, blame for our recession will shift to the Republican Congress, with President Obama’s performance looking more favorable by contrast.

The sheer hatefulness of the vitriol directed against the president by Congressional Republicans will galvanize Democratic voters, who will instinctively jump to their party leader’s defense. At the same time, it will disgust many of the independents who serve as the swing votes that decide these elections, since quite a few of them tend to sympathize with their president when they feel he is under an unfair assault.

Consequently, Obama will win his reelection by basing his campaign on opposition to the Republican Congress and by saddling the Republican presidential candidate (Mike Huckabee, Mitt Romney, or Sarah Palin) with their unpopularity.

While this hypothesis may seem far-fetched, situations virtually identical to it have already happened. One can look as far back as 1948, when Harry Truman was reelected after claiming (correctly) that America’s economic troubles were caused by a Republican “Do Nothing” Congress that obstructed all of his constructive policy proposals, from consumer protection measures to checks against inflation. A more recent instance can be found in 1996, when Bill Clinton gave his reelection campaign an enormous boost by capitalizing on public anger toward a Republican Congress that, as controlled by Newt Gingrich, had caused the entire federal government to shutdown in the winter of 1995 and 1996.

In short, based on the patterns of history and the tendencies of the modern Republican Party, I am willing to predict that Barack Obama will be reelected to the presidency in 2012.

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