US Midterm Elections

Well the predictions were correct, the public mood wanted change and the Democrats lost the House but clung on (narrowly) to the Senate. But what was this election really about? Was it questioning the Obama regime or was it an election on the current economic situation?

“It’s the economy, stupid” is a phrase which has haunted the incumbent regime. Used in the successful campaign of Bill Clinton over George W. Bush in the early nineties, this slogan has now come back to bite the centre-left. With unemployment sticking to the 10% figure despite injections of cash through Keynesian public spending, quantitative easing and now QE2 this seems to be an election on how the public feel about jobs.

Obama has achieved a lot in his time – pushing through the very-necessary healthcare reforms, steering the USA through bailouts in key companies within the car industry has allowed the shares bought to be ready for a profit-sale and also providing much needed capital to save both the US and financially-affiliated neighbours.

It appears to this blog that Obama is stuck in the middle (naturally, being a centrist politician) between being accused of not spending enough (Democrats) and spending far too much (Republicans). Combine this with the Tea-Party movement of a small state, incentivising enterprise and low taxes it all added up to a defeat for Obama. Having said this, many voters were drawn to the Tea-Partiers to the detriment of Republican votes. This will be particularly painful when the Tea-Partiers have to produce policy as opposed to populist rhetoric.

Ultimately, it wasn’t a disaster for the Democrats but it has sent a strong signal. If Obama can build bridges with the Republicans (of whom many are liberal) as well as play on the fact that they should join with him as opposed to the unelectable, flash-in-the-pan Tea-Partiers then progress can still be made.

Clinton lost control of the House in ’94 and still managed to win in ’96 so there has been a Democrat precedent set – if Obama can continue to push through the needed reform and he gets favourable economic statistics then the same story could be played out in two year’s time.

 

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