Why Obama Lost
Published in Le Monde
(France) on 13 November 2014
by Alain Frachon (link to original)
(France) on 13 November 2014
by Alain Frachon (link to original)
Translated from
by Derek Leonard.
Edited by Nathan Moseley.
In the United States, the majority of economic indicators are moving in the right direction. This hasn’t happened for a long time. Europeans are jealous. Stock markets are happy. Prospects for the future are better still. So, why this defeat, this rout, of Barack Obama’s Democrats in the midterm elections of Nov. 4?
Where does this disconnect between an economic situation apparently favorable to the president’s party and calamitous political results come from? Of course, this question has multiple answers, but one of them interests Europe as much as the United States. Beyond American specificities, the paradox of the result of Nov. 4 stems from the common malaise affecting Western countries: the rise of inequality.
Let’s get to it. The American economy will see a growth of 1.7 percent this year, and 3 percent in 2015. The unemployment rate has fallen from 8.1 percent at the end of 2012 to 5.9 percent. “Over the past four and a half years, our businesses have created 10 million new jobs. That’s the longest uninterrupted stretch of private sector job creation in our history,” says Obama. Public finances are recovering, as is the balance of trade. An energetic future is assured — all promising indicators for a country that was on the edge of the abyss when Barack Obama entered the White House in January 2008.
The Explosion of Inequality
In former times, such a scorecard would have made for a winning electoral ticket, the opposite of what just befell the Democrats: They are now in the minority in both houses of Congress. But we are not living in ordinary times, even if we continue to scrutinize current events with lenses bought in the 1960s.
The American recovery, more than ever, is happening at two speeds. It is profiting few or not enough of the majority of Americans. Discouraged, many job seekers are no longer searching; they are no longer counted in unemployment statistics. Salaries are barely rising. Even if inflation is very weak — 1.2 percent — the recovery has changed nothing with regard to this fundamental fact of the American economy: the continued downturn in median income. The New York Times notes that in almost all the districts where a senator was up for re-election, average income has dropped since 2007.
Several days before the vote, Obama, often a better analyst than politician, observed: “Average Americans aren’t seeing their income go up. So, although their situation has gotten better, they are still worried, not only for their future, but also for the future of their children.”* According to a CBS poll the week of the vote, only 27 percent of Americans believe that the country is going in the right direction.
Certain economists, like former Secretary of the Treasury Lawrence Summers, think that the lack of progress in average income is weakening the recovery. Neither consumption nor investment have started growing sufficiently. Summers sees in this the risk of long-term stagnation, maintained by the structural weakness in demand. But the majority of economists do not question the central fact of the American economy — this halt in the rise of average income for over 40 years — nor its corollary, the explosion of inequality.
The Political Costs
Numbers abound that give the measure of this — Le Monde from Sept. 6 to Oct. 29 — but the most gripping scene was set on Oct. 17 in Boston by Janet Yellen, the president of the central bank of the United States, the Federal Reserve. In 1989, the richest 5 percent of Americans possessed 54 percent of the country’s wealth; in 2010, their portion rose to 61 percent; in 2013, it reached 63 percent. “I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity,” says Yellen.
The middle class is losing ground. In 2014, the United States is as unequal as it was at the beginning of the 20th century. Economic globalization, technological revolution, a decrease in the portion of wages in the national income and an increase in the portion of capital, collateral effects from lax monetary policy: We can speculate on the causes of inequality. We can question the impact they have on growth, but we interrogate their political costs less. The diffuse anger of the middle classes here in the beginning of the 21st century in developed economies is being translated into politics. It takes the form of the tea party in the United States and protest groups in Europe, of a general calling into question of the elites, of defiance with regard to politics, of rising abstention from voting, and of a recurrent desire to “force out the incumbents.”
In an economic, technological and journalistic environment, as disruptive as today's, voters are not going to continue to kindly divide up their votes between the center-right and the center-left. Political representation is also going to change. The Americans who went to the ballot box on Nov. 4 did not vote for a Republican program. There is no such program, beyond the systematic demolition of Obama. They primarily voted against the currently established power, incarnated by the president. Their bad mood will return against the Republicans as soon as they become the party in power.
Hypothesis: There is no doubt that a quick fix for the explosion of inequality is lacking; this is the greatest phenomenon of the age. It is true that no one has the honesty to admit being against it. And who has lived in suffering when in government — whether in Washington or Paris?
*Editor’s note: The original quotation, accurately translated, could not be verified.
Where does this disconnect between an economic situation apparently favorable to the president’s party and calamitous political results come from? Of course, this question has multiple answers, but one of them interests Europe as much as the United States. Beyond American specificities, the paradox of the result of Nov. 4 stems from the common malaise affecting Western countries: the rise of inequality.
Let’s get to it. The American economy will see a growth of 1.7 percent this year, and 3 percent in 2015. The unemployment rate has fallen from 8.1 percent at the end of 2012 to 5.9 percent. “Over the past four and a half years, our businesses have created 10 million new jobs. That’s the longest uninterrupted stretch of private sector job creation in our history,” says Obama. Public finances are recovering, as is the balance of trade. An energetic future is assured — all promising indicators for a country that was on the edge of the abyss when Barack Obama entered the White House in January 2008.
The Explosion of Inequality
In former times, such a scorecard would have made for a winning electoral ticket, the opposite of what just befell the Democrats: They are now in the minority in both houses of Congress. But we are not living in ordinary times, even if we continue to scrutinize current events with lenses bought in the 1960s.
The American recovery, more than ever, is happening at two speeds. It is profiting few or not enough of the majority of Americans. Discouraged, many job seekers are no longer searching; they are no longer counted in unemployment statistics. Salaries are barely rising. Even if inflation is very weak — 1.2 percent — the recovery has changed nothing with regard to this fundamental fact of the American economy: the continued downturn in median income. The New York Times notes that in almost all the districts where a senator was up for re-election, average income has dropped since 2007.
Several days before the vote, Obama, often a better analyst than politician, observed: “Average Americans aren’t seeing their income go up. So, although their situation has gotten better, they are still worried, not only for their future, but also for the future of their children.”* According to a CBS poll the week of the vote, only 27 percent of Americans believe that the country is going in the right direction.
Certain economists, like former Secretary of the Treasury Lawrence Summers, think that the lack of progress in average income is weakening the recovery. Neither consumption nor investment have started growing sufficiently. Summers sees in this the risk of long-term stagnation, maintained by the structural weakness in demand. But the majority of economists do not question the central fact of the American economy — this halt in the rise of average income for over 40 years — nor its corollary, the explosion of inequality.
The Political Costs
Numbers abound that give the measure of this — Le Monde from Sept. 6 to Oct. 29 — but the most gripping scene was set on Oct. 17 in Boston by Janet Yellen, the president of the central bank of the United States, the Federal Reserve. In 1989, the richest 5 percent of Americans possessed 54 percent of the country’s wealth; in 2010, their portion rose to 61 percent; in 2013, it reached 63 percent. “I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity,” says Yellen.
The middle class is losing ground. In 2014, the United States is as unequal as it was at the beginning of the 20th century. Economic globalization, technological revolution, a decrease in the portion of wages in the national income and an increase in the portion of capital, collateral effects from lax monetary policy: We can speculate on the causes of inequality. We can question the impact they have on growth, but we interrogate their political costs less. The diffuse anger of the middle classes here in the beginning of the 21st century in developed economies is being translated into politics. It takes the form of the tea party in the United States and protest groups in Europe, of a general calling into question of the elites, of defiance with regard to politics, of rising abstention from voting, and of a recurrent desire to “force out the incumbents.”
In an economic, technological and journalistic environment, as disruptive as today's, voters are not going to continue to kindly divide up their votes between the center-right and the center-left. Political representation is also going to change. The Americans who went to the ballot box on Nov. 4 did not vote for a Republican program. There is no such program, beyond the systematic demolition of Obama. They primarily voted against the currently established power, incarnated by the president. Their bad mood will return against the Republicans as soon as they become the party in power.
Hypothesis: There is no doubt that a quick fix for the explosion of inequality is lacking; this is the greatest phenomenon of the age. It is true that no one has the honesty to admit being against it. And who has lived in suffering when in government — whether in Washington or Paris?
*Editor’s note: The original quotation, accurately translated, could not be verified.