Crisis and Prejudice

The financial crisis could give the presidency back to the Democrats in the United States. The state of the economy has always been the best instrument for predicting either the reelection of the incumbent or a change of political parties in the White House. That’s why it was confusing to see that the candidates were tied in the polls for several weeks. It seemed that strategic errors and miscalculations were more important than the state of the economy in this election. However, after a clear recognition of the crisis and the revelation of the bailout plan proposed by the Bush administration, all the polls are showing Obama in the lead.

Democrats and the most radical Republicans came out against the bailout plan and it wasn’t easy for Congressional leaders to win their approval. To Republican fundamentalists, the plan seemed to be an inadequate intrusion by the government into the market, and to the most critical Democrats it appeared to be highly absurde to throw a publicly-financed life jacket to the rich and irresponsible of Wall Street. Many people argued that the greedy bankers should be allowed to go broke, and that the financial sector be rescued only by millionaires like Warren Buffet, who, before knowing the details of the plan, invested billions of dollars in buying up, at a very reasonable price, the shares of Goldman Sachs. Academics supported the bailout plan, as did the presidential candidates, but the reaction of world markets seems to point out that the rescue plan is just the beginning phase in the process of stabilizing a very delicate patient.

Even though experts attribute the crisis to the deregulation policies promoted by Greenspan, the former chairman of the Federal Reserve Bank, the current director, Bernanke, a much respected academic, indicated that the crisis was inevitable. As Greg Mankiw, professor of Economics at Harvard and one-time head of Bush’s Council of Economic Advisers said a few weeks ago, technocrats of both the Democrat and Republican parties have, for quite some time, been pushing for control and regulation of the financial sector, and traditional politicians, who receive support from that very sector, have put up a systematic opposition to such control. He referred specifically to Chris Dodd and Barney Frank, both Democrats and presidents of the Banking and Finance Committees of Congress. Not only has each man received abundant support for their campaigns from the lenders Freddie Mac and Fannie Mae, but Dodd has also been the personal beneficiary of soft credit.

On November 4th, the voters, confronted by the worst economic situation and by a strange and distant war that at once fills them with fear and wears them down, will have to choose between an African-American and a woman. The debates didn’t do anything to help the indecisive make a decision, but they did help assure people that the “inexperienced” candidates, Obama and Palin, wouldn’t chicken out once they got to the White House.

If the polling trends continue, a black president will, for the first time, make his way to the Oval Office, as long as the all-too-frequent discrepancy—between what the polls say and what the actual election results are when it comes down to the fact that this is a race between a black candidate and a white candidate—doesn’t hold true. The Bradley effect refers to the tendency on the part of voters—black as well as white—to say that they are indecisive or that they’ll vote for the African-American, but then, on Election Day, they vote for his opponent.

It’s possible that whites, blacks and young people prefer Obama, a young, athletic man raised by a white mother and white grandparents who received the best education that one can dream of in the United States. It’s possible that these voters will not want to risk the possibility that a woman like Sarah Palin could, eventually, be the one to govern them. In the Democratic primaries, the Bradley effect didn’t play out; it happened that the more powerful “effect” was the fact that the African-American’s principal contender was a woman with more experience and an equivalent formal education.

The state of the economy and voter prejudice. These are the two elements that will ultimately decide this election.