What lessons can we learn from Obama?

So this week, Barack Obama’s Democratic Party took a bit of a drubbing at the polls in the US midterms, the biennial elections which return a whole new House of Representatives and a third of the seats in the Senate.

Think back to the jubilation of just two years ago, that night of high emotion as Obama’s “Yes We Can!” campaign swept him to a historic victory and also delivered a majority in both parts of Congress: this week’s repudiation of the party (and by implication Obama) is a shocking post-euphoria crash, the worst kind of day-after political hangover. Not that it’s unprecedented by any means – Bill Clinton had a similarly disastrous first midterms in 1994, but he recovered and went on to win a second term as president in ’96 – but it certainly speaks volumes about the level of disappointment and disillusionment that the US electorate feels right now.

So what – if any – lessons can we in the United Kingdom learn from this week’s political earthquake in Washington DC?

On the surface it seems to reaffirm and endorse the idea that the political tide has turned and that the right wing, economic-liberal approach is very much back in vogue. The UK swept the centrist Labour government out of power in May, and now the US is doing the equivalent in November. David Cameron has been very vocal about how government has got too big in the UK, that it is unaffordable and unsustainable and needs to be pared back, that we cannot continue to live beyond our means. But this outlook has been received cooly and even with irritation by the Obama administration as it continues to expand government, pour stimulus money into the economy and generally follow FDR’s Depression-era playbook on how the government is the key tool and driver in overcoming major economic crises.

If you ask the Democrats in the US they will say this approach has been working – that things would have been far worse without Obama’s stewardship, and it just needs time before everything is back on track. The election results this week rather powerfully argue that the US voters don’t believe that, and that they don’t think the policy is working at all. They’re tired of seeing the government expand, spending their tax dollars seemingly indiscriminately and generally give them nothing back in return except for more home foreclosures and more job losses.

This all looks very good for Cameron, Nick Clegg and the Conservative/Liberal Democratic Coalition, then – the party on the rise in the US is singing from the same hymn book as they are. Soon we’ll see US budgets pared back, stimulus packages aborted, government shrunk as America finds its own Age of Austerity. Then we really will be in this together, at an international community level at least.

But this might be the wrong set of lessons to take away from the US this week.

One of the ways that the UK Coalition is presenting the austerity measures here is to say basically “look at the mess we inherited [from Labour], it’s a disaster, we have to do something about clearing up the mess.” It’s a powerful argument that’s cut them a lot of slack from the public, especially while Labour has been AWOL from the political scene for much of the last six months choosing a new leader, leaving them with no clear policies or leadership in the meantime.

In America, however, that argument should surely be working the other way around: it’s Obama who inherited the financial crisis and massive deficits from the Bush administration (while George Bush himself had inherited economic prosperity and a balanced budget from his predecessor, Bill Clinton.) It’s quite bizarre that the Republicans have been able to campaign on a platform of financial restraint and reigned-in government, considering that the record of the previous GOP era was to blow the budget wide open and leave the biggest financial meltdown in history that nearly collapsed world capitalism for good. How could an electorate so quickly forget the situation of just two years ago and turn on Obama with such fervour now?

And this is where we get to the real lesson of this week’s US elections: basically it’s a distillation of the classic “It’s the economy, stupid.” A government which is in power when the economy turns bad is going to suffer at the polls. Every single time. Even if it’s debatable that things are getting better or just staying the same (as is broadly the case in the US), the electorate is not going to be happy with a struggling economy. And if things should get worse on your watch, then woe betide you come polling day.

Far from feeling happy and endorsed by this week’s developments in the US, Cameron and Clegg should be seriously worried by what they’re seeing. Unlike Obama (or Tony Blair in 1997), they did not arrive in Downing Street amidst a huge up-swell of public support and optimism. At best, the voters have cut them some slack for the first few months because of the existing economic crisis, but there’s not exactly any great reservoir of good will for them to fall back on over the next few months and years. We saw how quickly Obama’s support evaporated in just two years; how fast, then, before the grudging tolerance of the British electorate for a government that many feel they never voted for collapses? Especially if the economy grows worse, as almost everyone now expects it to do – and even faster and more severely if the new US Congress does indeed decide to slam on the stimulus brakes and bring the world economy to an emergency stop.

If I were a politician (and thank goodness I’m not – I’d make a terrible MP) in the Coalition at the moment, I would be very worried and scared about what’s coming. Labour have managed to hand over the stewardship of the economy at the precise moment when frankly no one in their right minds would want to have their fingerprints near the scene of the crime, because it’s going to be hard and uncomfortable for everyone, and the voters are going to blame the Coalition for it just as their US counterparts have landed the blame at Obama’s door. This has happened before in the UK, as well: the economy was faltering in 1992 and the writing was on the wall, so the smart play was to make sure someone else was in power to take the rap. Instead, John Major achieved the near-impossible in winning a new term, but after that the Conservatives got stuck with the collapse of the pound, the UK’s exit from the Exchange Rate Mechanism and a whole series of consequences that set things up perfectly for Blair in 1997 and contributed to the Tories being out of office for thirteen years.

The Coalition will quickly get to the point where it doesn’t matter how many times they say, “This is Labour’s fault, we’re clearing up the mess” – the voters will simply look at their day-to-day lives and answer with variations of “it’s the economy, stupid” and blame the party (or in this case, parties) in power right here, right now.

Any decent Labour leadership should be able to play this card to perfection: during the 2010 campaign the one argument (almost the only political debate of any substance) was about how to deal with the economy. Labour said that cuts would have to be done, but slowly so as not to stall the economy; the Conservatives wanted (and have now introduced) the most dramatic economic course change we’ve seen in a generation or more. If it doesn’t work – and quickly, at that – then Labour will be able to say “we told you so” and the blame for everything that follows will lie entirely with the Coalition. Labour’s past role in the economic situation will be forgotten as quickly as George Bush and the Republicans similarly escaped censure in the US – instead we’ll have Gordon Brown and Alistair Darling lauded as economic sages whose wise words the Coalition and the voters should never have spurned.

That’s the lesson that the Coalition should be learning from the US this week, but they won’t. Their eyes are too tightly closed with the effort of simply trying to hang on to this financial tsunami. And in the meantime, the latest opinion poll (YouGov’s poll for The Sun, which normally leans right) puts the Conservatives and Labour neck and neck on 40%, with the Liberal Democrat vote unsurprisingly collapsed to 9%, their worst polling since 1997 – hard to see any chance of survival for Clegg come the next election.

Of course, with every great risk and threat of disaster where there are high stakes, there’s also huge possibility and opportunity of great reward. If Cameron and Clegg (or Obama, the Democrats or the Republicans) actually can put together an effective and sustainable economic recovery over the next two years, then that triumphant success would be a game-changer for years to come and rewrite the political and economic orthodoxies.

No pressure, then.


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