Barack Obama’s election to the Presidency still surprises me a bit. Only four years before, American voters clearly rejected the Democratic alternative to the anti-government philosophy that Ronald Reagan popularized. Bill Clinton seemed like such a rejection, but he and his \u201cthird way\u201d ideas regarding the social and economic place of government in modern America were not in fact a return to big government. Clinton was \u201cReagan-lite\u201d; he was still fairly conservative, was still inclined toward small government and low taxes. It was under Clinton that the \u201cbubble economy\u201d got going; it made many people happy for many years (through rising stock prices, rising home values, and rising consumer spending). Then came Bush Junior and Osama Bin Laden, but even the 9-11 tragedy and the subsequent \u201cwar on terrorism\u201d couldn’t stop the economic party that was going on in America. Until the final, fateful year of the Bush presidency, unemployment was low, mortgage loans in any amount could be had by almost anyone, gasoline and big SUVs were affordable enough, \u201cmust-have\u201d consumer electronic goods were everywhere, and people were generally pretty happy with things.<\/p>\n
Thus, in early 2007, it was still quite unimaginable that a relatively inexperienced Democrat with a solid liberal pedigree like Barack Obama could be taken seriously for the Presidency. Well, I should take that back; once we found out just how intelligent and charming Senator Obama was, it was clear that this guy would not go away. But his historic charisma and incredible political skills notwithstanding, it still didn’t seem as though the average American voter had good reason to reject the tried-and-true Republican formula. Despite John McCain’s many blunders (with Sarah Palin perhaps being the most egregious), Obama remained tied with him in the polls only two months before Election Day. The big swing towards Mr. Obama came only after it became clear that the growing economic problems in the banking and real estate sectors were going to affect just about every family in one way or another. Only when it became clear that foreclosure, layoffs, and bankruptcy were becoming a real threat throughout the middle and working classes did the Obama landslide fall into place.<\/p>\n
The American public can be pretty dumb; they clearly got duped by continually rising home and stock values and unemployment rates that stayed below 5%. They really believed that nothing could ever go wrong again, and thus did some very risky things with their money and credit. But despite their short-sightedness, when it comes to electing a President, they generally know what they’re getting into. IMHO, they knew that Reagan, Bush, Clinton, and then Bush again meant less government, less tax, and more economic growth (although they didn’t ponder whether the fruits of that growth were being fairly distributed). And with regard to Obama, they knew that voting for him meant more government, and eventually more taxes. They don’t like a lot of government and tax, but when their way of life is directly threatened (which Osama Bin Laden could never do on a nation-wide basis), they become more flexible. Better to have a job and a house and face higher taxes, than the other way around.<\/p>\n
My question is whether the public mood will revert back to the Republican philosophies if and when the economy gets better. This will be really interesting to watch in 2012. Hopefully things WILL be better by then; the big government intervention that Obama is now orchestrating with the Democratic House and Senate will do its job (I hope) without imposing crushing levels of federal debt. Could an attractive Republican candidate then come along and argue for a \u201creturn to Reagan-like normalcy\u201d? <\/p>\n
The American public can be just as fickle as they are short-sighted. I realize that there have been demographic changes favoring the Democrats (including the aging of the Baby Boomers, who are increasingly concerned about securing what they earned during the \u201cgo-go years\u201d and preserving their access to other retirement helpers like Medicare and Social Security). But I still can’t believe that the big changes in voting patterns between 2004 and 2008 were driven by these things. The always perspicacious Bill Clinton was right in saying \u201cit’s the economy, stupid\u201d. The American people are indeed stupid in a lot of ways, but they usually know where they stand with the economy; in the short-run, anyway. If a future GOP candidate can recapture the short-run economic ground, then we could be in for more big surprises \u2013 as if 2008 didn’t have enough surprises for a generation or so.<\/p>\n
One more note on Obama and the new economic order. I was perusing the pundit-of-the-day lists on Realclearpolitics.com this morning and I noticed two different articles by Jeffrey Sachs of the Earth Institute at Columbia U. Both are found in British publications, the Financial Times and the Guardian. Both articles discuss the implications of the Obama fiscal stimulus package (which the House just approved tonight). In one article, Mr. Sachs hailed the package as the start of a new economic era; quote,<\/a><\/p>\n One of President Barack Obama’s historic contributions will be a grand act of policy jujitsu – turning the crushing economic crisis into the launch of a new age of sustainable development . . . Obama is already setting a new historic course by reorienting the economy from private consumption to public investments directed at the great challenges of energy, climate, food production, water and biodiversity. <\/p><\/blockquote>\n