Will GOP midterm win help reelect Obama in 2012? Maybe not

October 21, 2010

The Washington consensus is that if the GOP takes at least the House, it will give Obama a political foil and give his 2012 election hopes a big boost. And, the media tell us, the GOP presidential field is weak:

Sniping from the sidelines will be potential Republican challengers to Obama in 2012. The road to the presidential proving grounds of Iowa and New Hampshire is already well-trod by more than a dozen possible Republican candidates. The group ranges from Tea Party champion Sarah Palin to former Massachusetts Governor Mitt Romney and Minnesota Governor Tim Pawlenty. Experts believe Obama would match up well against any in this group — if the economy is on the mend and the jobless rate is trending downward from its current 9.6 percent.

But political analyst John Ellis paints a different potential scenario:

What might be an alternative story line? One answer would be: increased volatility. A darker answer might be: political instability and unrest.

As a nation, we are struggling with overwhelming debt at every level of governance and across a vast swath of the electorate. There are at least (at the very least) 15 states and countless municipalities that are functionally bankrupt. The states that are bankrupt, by any real accounting, include New York, New Jersey, Massachusetts, Connecticut, Illinois, California, Nevada, Arizona, Colorado, Ohio, Wisconsin, Louisiana, Missouri, Oregon, Washington and Michigan. They can’t (literally can not) meet their pension obligations. They won’t be able to pay for their ever-rising health care costs. Education costs are eating up too much money (although this will abate somewhat as the echo boom generation matriculates) and virtually every state (and municipality) has huge bond obligations, the proceeds from which papered over previous shortfalls. Oh, and one other thing, the economies in all of those states are stagnant, at best.

Once the last infusions of stimulus money run dry, what remains is a vast desert of debt. The idea that an over-leveraged electorate can be called upon to make up the shortfall is a non-starter. They can’t pay down their own debt and municipal debt and state debt and federal debt. The math simply doesn’t work. They end up with no take home pay.

This is the real avalanche that is about to hit American democracy. The avalanche in two weeks results in Nancy Pelosi no longer being the Speaker of the House. The avalanche of debt that hits beginning in 2011 and keeps on coming will shake our political system to its foundation. That’s the avalanche that matters.

President Obama can either get ahead of this avalanche by proposing a vast restructuring of government debt and obligations while aggressively promoting a venture-based economic growth agenda or he can be consumed by the rubble. The same holds true for the next Republican presidential nominee. He or she needs to be ahead of the avalanche to survive its inevitable onslaught.

Me: Austerity won’t sell. Growth and prosperity will. Whoever gaffs that, wins.

3 comments

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Wow.

This whole article ties in what what I’ve been thinking recently, as an very interested Canadian with friends in America, that the sense of betrayal and degree of anger with Mr. Obama and the Democrats at the voter level is far, far greater than the liberal, Democrat-friendly, Obama-loving mainstream media has been reporting. Which means any talk of Obama returning to office in 2012 is simply foolish.

Bottom line, voter anger with the Democrats may (will) prove to be so great and so underestimated by all the ‘experts’ that the Republicans may very well end up owning Congress entirely. Stranger things have happened.

Posted by Gotthardbahn | Report as abusive

James is right. I remember two years ago (November 11, 2008) when James wrote an article in the U.S.News & World Report about the One Term Obama :

“Why Obama Looks Like a One Termer”

http://money.usnews.com/money/blogs/capi tal-commerce/2008/11/11/why-obama-could- be-a-one-term-president.html

Good work, James !

Posted by Robinmasters | Report as abusive

[...] Obama already a lock? James Pethokoukis This entry was posted in Global News and tagged 2012, help, Maybe, midterm, Obama, reelect. [...]

[...] James Pethokoukis recently ran a post about the prospects for Obama’s reelection. He excerpted a rather poignant piece from an article by John Ellis. In the article, which I recommend you read in its entirety, Ellis goes through the conventional logic of why Obama will most likely win another term and then suggests an alternative that throws previous notions about the ebb and flow of American politics to the wind: The question on the table is: are these times normal? Or is something much more profound and much more unsettling going on? If you believe that the new normal is not normal at all, as I do, then “normal” narratives no longer apply. [...]

The reason that state budgets are completely decimated? Because the lion’s share of their booty was from property taxes! The states that are listed above are the one’s where the housing market was hit hardest, upwards of 40-50% declines. Show me ANY place (govt or business) in the world where a 40-50% drop in the biggest source of revenue doesn’t lead to big trouble. But, of course, it’s Obama’s fault. You… just… don’t… get it! AT THE STATE LEVEL no less! Sigh…

If people are disenfranchised with the current president it’s not because the MSM has given him a free pass, it’s because they don’t know their asses from a hole in the ground and continually misinform the public (both sides of the MSM.) They completely obfuscate the real issues and turn it into something completely different. Then the public gets mad because they think that the President is either lying or oblivious because the media presents everything incorrectly. Political spin is what’s helping destroy America because the public is never properly informed – one has to look outside the America media sphere to find informed journalism that weighs facts.

And let’s also be frank in saying that the old normal of the last 25 years has been fueled almost exclusively by debt. Complaining that growth that is not supercharged by increasing the debt load is poor or bad and Obama’s fault is so ridiculous as to be laughable and should be ignored outright. I find it so deplorable that people can be so duplicitous as to say that we can achieve growth in the short term by cutting debt – NO! that is NOT true as the 70s proved. We’re in for a long ugly period of adjusting our balance sheets, govt, business and consumers.

I’m sure you’d blame the 70s on Carter, but Nixon/Ford set up the conditions that were met by Carter. And while Carter had his share of missteps, none were quite as badly received as the economy being in a low growth, high inflation environment. So he inherited a shite economy and didn’t improve it fast enough because he wasn’t willing to open the pandora’s box of rampant debt accumumlation and deregulation. Now, if you want to stand for cutting debt/deficits – sure, I’ll be on board, but you can’t expect that growth will suddenly double by spending less. It’s really simple math.

Posted by CDN_finance | Report as abusive

[...] (October 21, 2010) Will GOP midterm win help reelect Obama in 2012? Maybe not [...]