In 2008, Barak Obama was the 'great American hope', a symbol for America and the world; an opinion shared by much of the rest of the world after eight years of a disastrous Bush-Cheney administration that sunk America in two fateful wars that were bound to cost more than one trillion dollars and in the end the US would have nothing to show for its investment in archaic Cold War foreign policy.
The disastrous Bush-Cheney foreign policy was invariably linked to an even more disastrous economic, fiscal, monetary and social policy that Clinton had started but the bubble burst in 2008. This is what Obama inherited. What did he do to improve US foreign policy, US monetary, fiscal and economic policy? The answer depends on one's perspective. The top 25% of income earners should be very happy with their personal finances under Obama. However, such a fiscal policy has come at the expense of the bottom 75% of the population and at the expense of future generations of taxpayers who must pay more than $14 trillion in public debt.
Under Obama official unemployment rose to 10% and GDP fell to 7%, both numbers representing the highest levels in more than a quarter of a century. That Obama inherited these problems along with a crippling public debt that some Republicans compare to the pathetic situation in Greece is well known. But what has Obama dome to avert the crisis and even after a deal with congress goes into effect, what will that mean for society at large? Obama is in essence no different than any other mainstream Democrat president, although expectations were that he would rise to the level of an FDR. Following precedent, he filed top economic posts with 'banking-friendly interests, status-quo advisers and milquetoast regulators' thus appeasing the financial elites.
Can Obama win even against Tea Party Republicans using scare tactics and having a large segment of the media and finance capital behind them? The answer is yes, provided that he can postpone the inevitable double-dip recession until after he is elected. He will come to a compromise with the Republicans on public debt and fiscal policy that favors the rich because he wants to make sure that the FED is free to stimulate temporary growth until the elections of November 2012. After the elections, as I have argued in previous postings, the US economy will sink into another recession and unemployment will rise well above 10%.
Obama an lose the election is he is unable to provide the necessary stimulus for the markets and the real economy on a temporary basis - fall 2011-to-fall 2012. The election is his to lose if he is unable to convince the American people that the Republicans are now under the extreme ideological control of the Tea Party. He will lose the election if he fails to convince the EU creditor nations, mainly Germany, that Eurozone cooperation is needed on the debt issue of periphery nations until the end of 2012.
He will lose the election if the situation in Libya and the Arab countries goes out of control - one reason that the US is temporarily against forcing Assad out of power by any means necessary in the manner that NATO is doing with Gaddafi. Oabama will lose the election if there are enough states like the upper mid-West that have structural deficit problems plaguing employees that demand federal assistance but not receiving it. The first African-American president will lose if the Republicans energize their base while the Democrats are apathetic, especially given that the left wing of the party is now 'realistic' about Obama as a protector of Wall Street. Finally, Obama can lose the White House if he fails to carry some key states like Florida, Ohio, and North Carolina, to say nothing of 'must-win' upper mid-West states.
At this juncture, the race is Obama's to lose and it looks like he may just make it. I have been saying for more than a year that he will move to the right to win moderate voters. This may appear like a good strategy for a Democrat running for a second term, but it may be the cause for defeat. Can Obama who wrongly has a reputation as 'liberal Democrat' win votes from conservative Democrat and moderate Republican areas?
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