Thursday 5 November 2009

Campaigning versus Governing: Understanding the Republican win of Virginia and New Jersey

The elections this week in NJ and VA illustrate the classic split between campaigning versus governing, and highlight the problems the Obama administration currently faces.

In both elections (as in the national elections last November), the campaign challenger held the upper hand over the incumbent (or the challenger associated with the incumbent party):

• Most regular voters were concerned with the rapidly declining economy and faced with personal insecurity. This remains the main driver of public perception in the present time.

• A challenger can easily challenge the incumbent’s record: public debt in both NJ and the US has reached historic levels. In this scenario, it does not matter, for instance, that Governor Corzine managed to reduce NJ’s debt by $ 2 billion: it’s still too high, and still restricts public initiatives to manage the economic downturn.

• The Democratic incumbents in NJ and VA had all been in power for at least 5 years. This gave the challengers abundant scope to raise the red flag of change, which, it should be remembers, is not a campaign trademark of Barack Obama.

We can take a quick look at the national stage and understand what this presages for the Democratic incumbents of the White House, Senate and House of Representatives:

• Far too much political energy is being focused on healthcare, climate change and a range of other initiatives which, though worthy, do not readily translate into a change in the daily life of most regular voters.

• Most regular voters continue to be affected by declining (or stable negative) economic conditions: unemployment; negative or nascent demand; employer cutbacks in compensation and working weeks; etc. There is precious little coming out of Washington dealing with these issues.

• Most politically-informed voters of the independent mindset (which includes as much as 40% of the voting public according to some polls), are upset by the fundamental inability or unwillingness of the Obama administration to address the mounting deficit. In addition to the deficit, the impact on the public debt of health care (where the final debt amount is still unknown, or challenged), as well as foreign wars, is deleterious.

• Finally, most voters are increasingly concerned about the wars in Afghanistan and Iraq. While we have accepted the “loss” and withdrawal of Iraq, it’s impact is mitigated by the fact that this commitment is over. On the other hand, there is mounting concern over the US direction in Afghanistan. Most voters see that we have been caught in Afghanistan for over 8 years with little to show in terms of results. The financial costs are rising; more casualties or fatalities are coming home, and the Afghans have just elected a corrupt president who apparently won the election on the strength of over 1 million tainted votes, while the US Secretary of State offered some inane platitudes.

All this adds up to one message: the Obama Administration has lost track. It is dealing with complex issues in domestic and foreign policy which have little to do with the everyday economic concerns of most American families.

The tremendous idealism generated by the campaign has not survived —and probably could never could—the tedious process of legislation and governance. This is why most younger voters have either stayed home or split their votes in the two races for governor.

If I have one message for the Obama administration, and politicians everywhere, it would be to prioritise on the economy and the economic issues which affect the majority of Americans. No one, not the hardest union worker, nor the most independent professional, nor the most well-paid CEO, is happy with either the state of the economy, or the state of public debt.

There have to be two types of measures:

a. Short-term measures to stimulate employment and raise real wages, and
b. Long-term measures to cut public debt.

Structural interventions, such as healthcare, education and renewable energy, should be addressed only once the economy has returned to a sustained growth track, and there is a clear understanding of how the debt will be reduced (and how policy in other domains will be funded).

Everything else should be prioritized against these two fundamental objectives. While our political classes may think we have the luxury of spending time and money as if there were no tomorrow, most taxpayers think otherwise.

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