The other side of euphoria

When Barack Obama won the presidency in 2008 after a stunning electoral campaign, the tidal wave of optimism this sent throughout the United States and the rest of the world completely eclipsed the financial crisis whose dimensions were only then beginning to be known. I remember saying how lucky America is to have an intelligent and inspiring leader like him at this critical moment.  At the same time, I worried for him, the first AfricanAmerican to be elected president of the United States.  He could be killed, or he could be found miserably ill-equipped for the kind of problems he was expected to fix.

No one would have guessed that the disenchantment could come so soon.

The results of the November 2nd midterm elections are just trickling in as I write.  But it is a foregone conclusion that Obama’s Democrats will lose control of the House of Representatives.  While they will retain control of the Senate, the margin will be so slim as to make it even more arduous than before to secure the passage of any administration measure.

The specter of gridlock haunts American politics. The program of audacious reforms that Obama announced at the start of his presidency has hit the wall.  Even the universal health care program that he had fervently fought for is under risk of being reversed as soon as the Republicans take over the House.  The attempt to energize the economy through a stimulus package faces a bleak future. At a time when the government needs to decide whether to continue pouring in more public funds to re-start a stalled economy, the midterm vote seems, at best, to counsel inaction.  At worst, it compels a retreat.

If the rhetoric of the grassroots wing of the Republican Party – the so-called “Tea Party” movement – is representative of current thinking among the American middle class, then one must worry for the whole American nation.  In the face of the mess the country finds itself in, the Tea Party preaches not the reform of society, but the withdrawal of government altogether from the lives of individual Americans.  In a time requiring solidarity, it summons the self-reliant spirit of the American frontiersman undaunted in his quest for liberty and prosperity.  Nationalist to the point of isolationism, this message has powerful resonance. Yet it is fueled more by emotion than by an informed understanding of the complex realities that Americafaces in a global era.

The Tea Party activists demand a balanced budget, but they also want taxes to be cut.  They want jobs that had been outsourced abroad to be returned to Americans.  But they forget that cheap foreign labor was what allowed them to enjoy consumer goods at giveaway prices. They demand a stop to government borrowing, yet they are clueless about how the existing debt now running into trillions of dollars is to be paid.  Much of it, ironically, is owed to China, whose productive but lowly paid workers took away jobs from almost every other country in the world.

The US debt, now nearly the equivalent of the country’s GDP, had piled up over the years partly because of the costly wars that America brought intoAfghanistan and Iraq after 9/11.  But the bulk of that debt was incurred as a result of the unabated credit-driven consumer spending that Americans became accustomed to in the bubble economy.  The USeconomy has long been bankrupt, yet this situation was concealed by the fact that the American dollar continued to be in demand as the world’s reserve currency.  Thus, instead of producing goods, it printed money to pay for its imports.  This not a sustainable way to live, even for a country as powerful as America, and it is finally coming to an end.  But the adjustment problems it has unleashed are spawning the kind of knee-jerk politics that the Tea Party movement precisely exemplifies.

In retrospect, Barack Obama may have taken on a job in which he was bound to fail one way or another.  The costly strategy of releasing more money to bail out ailing US firms and to stimulate the economy in the hope of generating more jobs has clearly not paid off.  Some say not enough financial stimulation has been injected into the economy, and a second round is needed.  Others say it is the wrong strategy in the first place, and that it is better to leave the economy alone to deal with its problems.  Either way, the political costs would have been inescapable.

The other side of euphoria is always a weariness that paves the way for the most reactionary form of politics.  This is evident in the sharp conservative turn that American politics has taken in these midterm elections. Suddenly, the Tea Party has grown from being an object of ridicule into a serious wing of the Republican Party.  It is ironic to hear some politicians from the Democratic Party distance themselves from Obama’s vision of change. Obama, the unifier, has suddenly become the scapegoat for everything that is troubling America.  It is a sad day not just for American politics but for forward-looking politics all over the world.

But there are important lessons here we should not miss.  The first is that while inspiring political narratives may win elections, the actual tasks of governing and solving problems require analytical more than rhetorical skills.  This is especially so because the time-frame of reform is not the same as that of elections. The second is the recognition that in a globalized world, the ability of any government to steer the economy away from crisis is limited. When money is released into the economy, there is no way of controlling how it will be used.  Obama surely knew these from the start, but then he is just one man in a complex political system.