Introduction
The election of Barack Obama as the 44th president of the United States was a historic event in the life of the American republic. The fact that an African American was elected president and on a platform of “change” was heralded as the beginning of a new era in the politics of the nation. Obama’s repeated assertion that “Change will come to Washington” echoed with the expectations of the electorate. This has been interpreted by many as an indication of intent to reform the governmental structure and the body polity.
The other notable feature of the election has been the state of the economy and the ongoing credit crisis. This was said to have figured prominently in the election and was one of the main issues that propelled Obama towards victory. In the perception of the electorate, electing John McCain was tantamount to rewarding the very people who got the country into the financial mess.
The credit crisis
To have a brief introduction for the present crisis, the housing market was inflated to a large extent because of loans made to borrowers who had bad or no credit history. These kinds of borrowers were called sub-prime of below the prime required for a good credit history. Once the loans were made arbitrarily, the homeowners went for further capitalization by refinancing their mortgages and borrowing against the houses. All this went on till the housing market corrected itself and the housing prices started to come down. This meant that the bubble started to burst.
While the housing market bottoming out does not really make the whole economy go bust, it is the aspect of building up value on top of the mortgages through a form known as securitization that we will discuss later. And then the same were collateralized in the form of instruments known as CDS that gave the whole thing the look of a crisis of epic proportions.
Economic positions of each candidate
As expected, the candidates have divergent positions on economic issues in line with their traditional stand of their parties. While McCain favors tax breaks for the rich, Obama has famously gone of record that one can show one’s patriotism by accepting higher taxes. On the issue of free trade agreements, both of them have positions that are equivalent with some deviation as far as NAFTA and CAFTA are concerned. However, on the issue of immigration both of them are at widely divergent positions. While McCain favors stricter border patrols, he is nonetheless comfortable with the position of illegal aliens and their rights. Obama on the other hand has been a consistent opponent as far as the ease of finding jobs for the illegal aliens goes. McCain has changed his stance on some issues related to immigration particularly when it comes to the guest worker program. However, it remains to be seen how this would go hand in hand with his position on Offshoring and outsourcing. Obama has taken a more strident approach towards outsourcing.
While Obama and the Democrats are in favor of bailing out the banks, they nonetheless want strong governmental oversight so as not to be seen as bailing out the “fat cats” who caused the mess. This has gone down well with the people as recent opinion polls show. And this has softened the earlier stance of being against free trade with most Americans being concerned about the immediate economic concerns rather than go into lengthy and long winded debates about the merits of free trade and the like.
McCain on the other hand seems to be losing the advantage with the current crisis reaching alarming proportions and his stance on free trade that was appreciated earlier is now looking as though he wants to continue “more of the same”. And this is the crux of the presidential campaign on 2008 as McCain is “McSame” whereas Obama is “Change”. Thus, this is where both candidates find their main strength and a potential cause for weakness. Though McCain has tried to embrace the slogan of change, it is more like a belated effort that has been described by the Obama camps as “Lipstick on a Pig” effort.
Effect of economic crisis on election
A closer look at the poll data shows some clear reasons why Obama won.
First, he came at the right time and was consistent in his theme of “change”. For instance, President Bush’s approval ratings were at 27% because of the financial meltdown and thus change echoed with voter sentiment. Secondly, Obama won “middle America” more than John Kerry did. The Obama victory was a balance of winning more white voters than John Kerry and doing substantially better with African Americans and Hispanics.
Obama’s victory is not as huge as it seems not as narrow as claimed by the right wing commentators. An analysis of the data shows that his victory has come at the “centre” and despite accusations of “socialism” and “Joe the Plumber” he managed to carry a lot of white working class men and women with him. In the accounts of many commentators, it is the state of the economy that dominated the electoral outcome with many American voters believing that it was the economic policies of the Bush administration that got the country into the mess in the first place. This was evident in the way in which the voter swing was recorded in September and October 2008 when the election “went away” from McCain.
Recommendations
Though it is hazardous to predict the future, there can nonetheless be a set of variables that can be used as a guide when one goes from election mode to governance mode. The closest comparison that Obama draws is with FDR and like him, Obama may well have to present a “New Deal” but with a difference to Americans. In the perception of many, Obama has the ability to reach out to the American public much in the way that FDR had done in the aftermath of the Great Depression. The parallels are striking as the US faces the worst recession since the 1930’s and what Obama can start off is by addressing the “low hanging fruit” and concentrating on delivering financial assistance and “practical help to individuals, families and communities” (Kuttner, 2008).
The advantage that Obama enjoys is that he has a “honeymoon period” in which he can explore options over the kind of policy reforms that he would like to bring.
The American people are going to give him that much more time to settle down and begin his term on a positive note. However, the credit crisis is not going to give him much scope for maneuver at least in the beginning of his term. Whatever his campaign promises of “punishing the guilty”, the immediate requirement of getting the economy back on track is going to occupy center stage in the first few months of his term.
Conclusion
In conclusion, it is the contention of this author that Obama and his team take one thing at a time and concentrate on re-building the confidence in the economy and restore the standing of the United States in the world. I hope he succeeds.
Sources
- Foster, Peter. “No Fallen temple”. FP Comment. 2008.
- Kuttner, Robert. 2008. “Can Obama be FDR?” Obama’s Challenge. New York: Chelsea Green Publishing Lombardo, Steven. 2008. Why Obama Won. Results from Pollster.com.
- Temple-Raston, Dina. 2008. Obama faces transition, many challenges ahead. Results from the NPR web publication. Web.
- Tumulty, Karen. 2008. The Obama transition: What will Change look like? Results from the TIME Magazine website