Monday, November 1, 2010

Handicapping Election 2010

Obama_NO_WE_CANTIt’s a drop past 5pm here in Tucson, Arizona. By this time tomorrow, polls across the Nation will have been open some eleven hours as voters cast their lot in what promises to be an election with tremendous, national implications.

While the outcome is uncertain, Gallup’s generic Congressional ballot is forecasting ‘unprecedented’ gains for the GOP during tomorrow’s midterm elections (and some quarters have Republicans doing even better):

It should be noted, however, that this year's 15-point gap in favor of the Republican candidates among likely voters is unprecedented in Gallup polling and could result in the largest Republican margin in House voting in several generations. This means that seat projections have moved into uncharted territory, in which past relationships between the national two-party vote and the number of seats won may not be maintained.

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Unlike Gallup, and Five Thirty Eight, I tend not to do very well when making political projections. In the past few years, I’ve wrongly predicted the outcome of the Super Bowl, the the 2007 Final Four , and the 2008 GOP primary.

If the Texas Rangers are to have the slightest inkling of a prayer in the World Series, yours truly needs to stay far afield of forecasting a win on their behalf.

Whither the Dems?

What I do tend to be better at, is analyzing situations, and diagnosing their causes and effects. Usually, I do this with a heavy dose of sarcasm, and the odd-glass of wine. For this election, however, the answer is so painfully obvious that no wine is needed. The problem, in one word: jobs (and no, this has nothing to do with the Apple, Inc. CEO by the same name).

Assuming there was ever a nail in the coffin for Democrats, and that the coffin isn’t already too full of nails to absorb one more, it came on October 21, 2010 when the latest unemployment numbers were released by the Bureau of Labor Statistics.

According to the latest analysis,  the Administration’s policies set any meaningful recovery for a time in the indeterminate future. And even Fed Reserve Chief Ben Bernanke is left in a schizophrenic policy mess, reflexively printing more money while calling the practice ‘unsustainable.’ In general, I find the term ‘unsustainable’ to be an unhelpful buzzword. From our water supply, to our debt, quite literally every facet of our lives can be considered unsustainable in some way– including life itself. But if we assume, here, that the unsustainable printing of money means we print more money every time the numbers for the quarter come back dire, then Mr. Bernanke is absolutely right. Of late, the numbers from the quarter always come back dire. And if we continue to print more money, toilet paper could well have a higher value in the near future. Consider the Ethiopian birr as an example.

Perversely, the entire money-printing charade is almost reminiscent of the scene from The Little Giants, wherein Johnny urges against his team’s decision to pitch the ball to himself. You can't pitch to Johnny! I'm Johnny! The scene works out okay in the movie. But President Obama is far from the father waiting with open arms when you lose your job. And unlike the movie, no matter how many plays like this the Fed attempts to run, it will not cut the deficit in half.

So, to continue the tortured football analogy, saying the economy is hurting the Dems is like saying Wade Phillips is hurting the Dallas Cowboys. It’s a fact. But it doesn’t capture the entirety of the colossal failure.

At this point, it strikes me that voters are pretty much looking for anyone who understands that jobs need to be the priority of the U.S. Government, stat. And when you consider some of the candidates that are picked to win tomorrow (see here, and here), the standard is quite literally anyone.

At the end of the day, Democrats have no one but themselves to blame. AOL’s political blog outlined the top five ‘accomplishments’ of the Obama Presidency late last summer. You’ll notice the distinct absence of ‘jobs’ among the embarrassingly short list. Given that the Administration has lived in its own tin ear the bulk of the past two years, it is little wonder that Americans will vote for virtually anyone who will listen to their complaints.

What Next?

Implicit in the critique of the Obama Administration is the caution now facing the Republican Congressional Majority (rather, the caution soon to be facing the Republican Congressional Majority): ignore the voters at your own peril.

In the months following the burgeoning, political tsunami, Republicans will have a mandate for fixing the economy and little else. I would expect the party to deliver, in relatively short-order, on a jobs plan that aims at spurring small business growth where roughly 65% of all new jobs are created. One might expect tax initiatives in the form of business and some income tax reductions, along with efforts to improve ailing credit conditions to be a part of the mix as well. It is also reasonable for Republicans to insist upon easing the regulatory burden for small businesses as a precursor to negations with the Obama Administration.

One point of caution that I will offer to the new GOP Majority, which I expect will not resonate with the newly minted tea partiers, is to tread lightly on the matter of reducing government spending. And before the comment board swells, let me say from the outset that I am not advocating for Government to spend more money. But I am saying that a massive, immediate reduction in government spending could have unfortunate consequences.

Spending by the United States Government comprises some 24% of our Gross Domestic Product. Scaling back government spending quickly, and on the massive-scale advocated by some tea partiers, would lead to an immediate reduction in American productivity. This would create a ripple effect across global markets, ultimately doing more harm than good.

Consider also that defense spending, Social Security, and Medicare/Medicaid/CHIP account for roughly 20% of American spending apiece. Naturally, making any meaningful cuts to these big ticket items will be wildly, politically unpopular – particularly, as the Nation’s largest voting block, the baby boomers, ascend to the ranks of the socially secured.

But even setting aside the politics of such reductions, cutting these big ticket items will require a level of political cooperation and overhaul not yet seen in American politics. Will the upcoming Congress have the chops necessary to provide the reforms necessary to put our economy back on track?

Given that the Presidential election is a mere two years away, the smart money is on, ‘no.’

Tomorrow

And on that cheery note, America, here’s wishing you a happy and historic Election Day tomorrow. May God continue to bless the United States of America (or 'resume blessing' – depending upon your level of skepticism).

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