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Wednesday, November 7, 2012

WHAT HAPPENED? WHAT NOW?

Election analysis is a whole industry. It has already started with exit polls and in the weeks to come political scientists will refine the numbers and tell us how a long list of demographic groups voted. Why they voted as they did is another subject but neither analysis will provide many surprises. Issues commonly associated with liberal or conservative philosophies will be reflected in ethnic, gender and socioeconomic groups of voters as in previous elections. Economic conditions can override these tendencies and conventional electoral wisdom has always declared that a terrible economy spells defeat for an incumbent. Herbert Hoover is the historic standard for this belief and Jimmy Carter and George H.W. Bush confirmed it.

So in the context of the “Great Recession” and by historic standards, Obama should have been easily defeated. But obviously there was a fundamental difference in this election. What was expected by Republicans to be a referendum on Obama's performance in handling an economy in crisis produced a close election but failed to provide the expected result. 

The difference is reflected in the candidates themselves, the makeup of the electorate and the ever growing influence of the internet. This year's election pitted the first black President against the first Mormon candidate. With an electorate that is made up of an ever larger percentage of racial minorities, primarily Hispanic and black, a candidate who is both a member of a minority group and has already achieved the nation's highest office has an undeniable appeal to minority voters. In the case of blacks, this “identity voting” is virtually 100%. While blacks have historically given strong support to the Democrat Party, voting participation has been low. Obama changed that first as a black candidate in 2008 and again as President this year.

Hispanics are the fastest growing ethnic voting bloc whose minority status also created a definite advantage for Obama but also reflected a more significant trend in electoral politics, that of disparate groups energized by narrow interests rather than broad ideological philosophy or understanding or interest in issues of long term nationwide importance. These issues included strategies for economic recovery which again, should have been decisive in the election. Instead, while few people are truly single issue voters, many placed a high priority on such issues as abortion, gay marriage, gun control, the goals of organized labor and global warming.

As an example, the Hispanic cohort, was largely energized by immigration reform strategies which for them, diminished the impact of the economic downturn as an election issue. This is not to say that voters who were heavily influenced by these specific issues were not concerned about the economy. However, identifying with a highly partisan interest influences one's interpretation of economic issues and biases one's choice of candidates and thus that candidate's solution for economic problems. The support of these narrow interests are given extra strength by the huge number of organizations which promote them and contribute to the diluted the focus on economic issues by many voters. The importance of ethnic orientations in this election was especially important with respect to the Electoral College in New Mexico, Colorado, Nevada, Pennsylvania and Florida.

The other side of the coin in terms of the economic issue was the candidacy of Romney itself. While Romney ran against Obama's record, Obama ran against Romney personally. The New York Times reports that early on, in terms of campaign strategy, “The choice was made. The onetime campaign of hope and change soon began a sustained advertising assault that cast Romney as a heartless executive, a man who willingly fires people and is disconnected from how average Americans live their lives — an approach reinforced by Romney’s mistakes along the way.”

Thus the major theme of Obama;s campaign was that Romney couldn't be trusted to fix the economy because of his great wealth and his background in a successful private investment company. In essence, Romney was demonized for being successful and it was implied that his success included anti-social, anti-American, and even dishonest business and tax procedures. While none of this was true, an electorate which included large numbers of financially distressed and threatened individuals provided fertile ground for its angry class warfare message. People wanted some one to blame and Obama's “millionaires and billionaires”, “corporate jets”, “one percent” rhetoric offered an easy target and successfully avoided the “Hoover syndrome”.

Romney never stimulated significant enthusiasm as the Republican candidate. He was essentially the default candidate chosen in a long and contentious nomination battle from what seemed like an audition for Saturday Night Live skits featuring strange behavior, revelations and blunders by Cain, Bachmann, Gingrich, Perry and Santorum, all of whom accomplished nothing except to lay the groundwork of criticism of Romney for the Obama campaign. The primary campaign forced Romney, a pragmatic, center-right moderate to move to more doctrinaire conservative positions on social and economic issues. Moving back towards the center by necessity in the presidential campaign exposed him to charges of “flip flopping”, and a lack of core principles.

Romney's economic message was blunted, Obama's lack of leadership and few flawed initiatives were successfully glossed over. The “mainstream media and the liberal blogosphere succeeded in solidifying the Obama campaign's message. Thirty-three percent of voters interviewed said Bush was responsible for the bad economy. Another thirty- three percent claimed that the “rich were greedy”.


The next four years are hard to predict because of unforeseen events which will certainly impact policies but if the old formula “Past as prologue” is any clue, Obama's first term is instructive.
Obama is spending reduction averse. Most government spending provides benefits to someone, usually to lower socioeconomic groups since there are few “programs” for the middle and upper classes. This fits his “redistribution” orientation and his “don't balance the budget on the backs of the poor” demagoguery. Expecting a new approach based on fiscal discipline is unrealistic. He also seems to be committed to increased spending on “infrastructure”, i.e. roads, bridges, “green technology” and education i.e. hiring more teachers. Thus any spending reduction proposals are most probable in defense, which will be opposed by the Republican controlled House of Representatives.

The looming across the board “sequester” which requires large cuts in spending but are spread out over ten years, are already stimulating cries for modification. Future budget proposals from the Administration will probably continue to include trillion dollar annual deficits and it will continue to emphasize tax increases as the remedy for deficits. The economy will probably continue it's cyclical improvement, although slowly, as consumer demand will be affected by population growth more than dramatic employment improvements and as the housing/construction markets absorb large inventories. As foreign trading partners continue to suffer the consequences of their own recessions, U.S. exports will remain diminished thus affecting jobs numbers and economic growth.

Real tax reform will be grid locked, although some compromise on the so called “fiscal cliff” which commences on January 1, 2013 w ill probably be forthcoming for reasons of political expediency on the part of both parties. The “Bush tax cuts” expire on that date which corresponds with the “sequester” spending cuts. Significant tax increases would present political problems relevant to the 2014 Congressional elections. Tax increases and un-targeted across the board spending cuts could take so much money out of the economy that the slow growth could stop or slide backward into another round of recession.

As Obama said in his famous “hot mike” comment to Russian Prime Minister Medvedev, after the election he will have “more flexibility”, since he won't be politically accountable. The question remains, in what direction will his new flexibility take him? Will he move further to the Left and pursue a greater role for government in both the economic and social spheres with more redistribution, more regulation, and more social engineering? Or will he move more to the center and seek less ideological and more pragmatic solutions to the economic problems facing the country? Either way this historically expensive and divisive election will make governing more difficult than ever and seems to confirm the journey away from civil discourse, reasoned policy oriented debate and a sense of underlying common values which is the bond which holds a society together.

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