1. After the historic victory of Barack Obama in 2008 elections, Democrats have been loudly defeated in the midterm elections. Is it a contingent result linked to particular circumstances, such as the specific group of states which voted for the Senate and other events, such as the Middle East quagmire, and so on? Or the result is the outcome of a wide range of popular discontent and frustration –and in this case, what kind of mistakes should be reproached to the presidency?

2. The electoral outcome is, in a certain sense, surprising from a European point of view, considering that the U.S. economic growth is much higher and the unemployment incomparably lower than in the Eurozone. If it is an incomplete picture of the reality, what is your view on the economic and social aspects of the U.S. post-crisis recovery?

3. There is somethingimportant that can still be done in the next two years of the Obama's presidency, in relation to which it is possible to guess a bipartisan cooperation?

4. What are the prospects for the 2016 presidential election? Can the Democratic Party gain it? And, whether this chance does exist, does it imply any substantial policy change?

(Insight)
                                    _______________________

Jeff Faux   (Former President of the Economic Policy Institute)

Voters gave Obama low ratings because they were disappointed in his performance on the issues they cared about most.

The party of the President typically loses the mid-term election. But the loss for the Democrats this year was larger and more sweeping than usual. The Republicans won twice as many Senate seats as is normal and captured a very large majority of governorships and state the legislatures.

The conventional wisdom is correct; the vote was a referendum on the President. His low popularity in the polls is the best single explanation for how the Democrats did.

Why was his popularity so low? Some on the left blame racism. Racism is always present in U.S. society, but it cannot explain the election. Barack Obama is no more African-American today than when Americans twice elected him President.

The right is claiming that the vote was a conservative reaction against Obama’s too liberal policies, But his policies were hardly extreme. And the polls consistently report that when voters are shown the different Democratic and Republican agendas, a majority of voters prefer the former. In Alaska, Arkansas and South Dakota, where voters replaced Democratic Senators with Republicans, they also approved raising the minimum wage.

Voters gave Obama low ratings because they were disappointed in his performance on the issues they cared about most -- the economy, heath care, and national security/foreign policy.
Each of these areas has its own complex narrative of failure. But there is a common theme that runs through them all. It is that the President’s eagerness to compromise with conservatives in order to “get something accomplished” has led him to promote policies that  undercut his own stated goals. In economics, his polices have come across to voters as inadequate. In health care, they seem inefficient, if not unworkable. In foreign policy, they are incomprehensible

On the economy, Obama’s unwillingness to challenge  Wall Street’s obsession with deficits has led to a macro economic strategy of low interest rates and insufficient fiscal stimulus. The result is that the benefits of recovery have been channeled into the pockets of the wealthiest Americans.  Six years after the financial crash, a majority of voters are still struggling on stagnant incomes and are pessimistic about their financial future. Deficits have been lowered. But the voters didn’t care, and the capitalist class continues to finance his opposition. Thus, the Democrats received little political advantage in return for protecting the rich against the populist anger that swept their party into power in 2008

On health care, rather than propose a single payer national insurance system – which would have been easy to understand and relatively simple to administer -- he adapted a proposal from the conservative Heritage Foundation that had been designed not to deliver universal health care, but to thwart it. The resultant Obamacare is overly complicated, confusing and loaded with subsidies for big business. Its incompetent rollout was humiliating  – not just for the Obama Administration, but also for the very idea of government-run programs. Predictably, the conservatives Obama had tried to please – including the subsidized corporations -- attacked him viciously.

The President was elected, and re-elected on a promise to pull out of Afghanistan and Iraq, and to pursue a foreign policy that recognized the limits of U.S. power in the multipolar world. Six years later, egged on by the bi-partisan Washington foreign policy elite,  he has led the country deeper into the Middle Eastern quagmire by frightening Americans with exaggerated claims of threats to them coming from various middle eastern monsters, whose names and character change from week to week.  Yet there is no consistent plan -- except to continue the strategies that produced these monsters. The cluster of scandals around US government internet spying, secrecy and tolerance of torture added to cynicism and disgust among core Democratic voters.

Obama did not create these crises. Certainly, he has been crippled by Republican obstructionism. With Republicans now in control of both houses of Congress, there will be more of it. On the other hand, given that their takeover of the Senate rested in part on a purge of Tea Party candidates in swing states, a GOP establishment with its sights set on winning the White House in 2016 will keep a lid on its  lunatic fringe until then.

Therefore, the immediate prognosis is for continued and deepening stalemate.

For 2016, the problem for Democrats is that because they will remain in control of the presidency for the next two years, voters are as likely to blame them for the failure of the political system to deliver as they are to blame Republicans. To turn their fortunes around, Democrats will have to show voters that their policies are bold enough to reach the level of the problems they are aimed at solving and that they are willing to fight for them. This will require a more confrontational politics than, at least until now, Barack Obama has been able to tolerate.

Ironically, stalemate is probably the best we can hope for over the next two years. Given the new Congress, any significant changes in Washington policies are likely to make things worse.

_____________________________
 

James Galbraith  (University of Texas,  Austin)

The most to be-feared outcome is that the President will now compromise on important social programs

1.. Loudly defeated for the second time. (First time was in 2010.) The result is mainly a consequence of shifting turnout. It is high in presidential years, favoring Democrats, and low in off-years, favoring money. Events have very little to do with it.

2. Economic growth has had very little connection to wage/income growth --  and I would add that wage/income growth has an only-modest connection to economic security. http://tinyurl.com/mm99qld for a good summary.

3. No. The most to-be-feared outcome is that the President will now compromise on important social programs with the Republican Congress, cutting the ground from under the remaining Democrats. And the second-most to-be-feared outcome is pressure from Congress for a more aggressive foreign policy.

4. Sure, a Democrat (Hillary Clinton) can win in 2016, and the Democrats may retake the Senate then as well. In terms of policy changes, nothing much will happen, because the House is locked up for the Republicans until after the next two presidential terms.

It is an excellent time to consider a career in, say, transcendental meditation.
_______________________________
 

Dean Baker   (Co-Director of Center for Economic and Policy Research)

The problem was clearly turnout, people didn't think the Democrats gave them a reason to vote.

There are a number of factors that would have worked against the Democrats in any case. Turnout is always much lower in a non-presidential year and the people who don't vote are disproportionately African America, Hispanic and lower income. This means that Republicans will generally do better, other things equal. There also has been a regular pattern that voters turn against the president's party in the 6th year of their presidency. I'm sure there are explanations for this, which I don't know, but it is a consistent pattern. But even with these factors, it still was a very bad showing for Democrats.

It is important to realize that they did not just lose Senate seats in Republican states. They lost gubernatorial races in Illinois, Maryland, and Massachusetts, some of the most Democratic states in the country. The problem was clearly turnout, people didn't think the Democrats gave them a reason to vote.

Part of this story is that the economy is still quite weak. The unemployment rate gives a deceptive picture. Most of the decline from the recession peaks is due to people dropping out of the labor force. The employment to population ratio has risen only about half a percentage point from its trough and its still close to to 4.0 percentage points below the pre-recession level. Even if you just look at prime age workers it is down by 3.0 percentage points, so the issue is not aging as many claim.

The weak labor market has meant that most workers have seen no real wage growth in the recovery. Real wages for most workers are still well below their pre-recession level. So most people are not feeling good about the economy.

The Affordable Care Act (ACA) is turning out to be a huge success based on the data. More people have been covered than had been projected. And costs have been much lower than expected. But, the Democrats deliberately did not talk about it during the election. Incredibly, the Republicans didn't talk about it either after constantly insisting that they were going to repeal it. The result is that the "ACA" or "Obamacare" are very unpopular when mentioned by name, but the insurance they provide is hugely popular.

If that sounds absurd, consider that there are million of conservative Republicans who angrily demand that the government keep its hands off their Medicare. They love the program, but don't realize that it came from the government. The Democrats have accomplished the amazing feat of pushing through a popular program over the unanimous opposition of the Republicans and getting zero credit for it.

The Democrats are far from doomed in 2016 -- the Republicans are hugely unpopular -- but they will have a difficult time if they can't say anything serious on either the economy or health care. I'm not sure that they will. Hillary Clinton is of course the front-runner. She will get the nomination unless she makes some really foolish mistakes. That is a real possibility, since she managed to blow up her candidacy in 2008 and the early indications are that she is doing no better now. (When she did a tour around the release of her book she told an audience that she and Bill were "dead broke" when they left the White House. Given that both of these people could get $200,000 for a lecture any time they want, or write a book for a multimillion dollar contract, this was an incredibly foolish thing to say in a country where many people really are dead broke.)

Anyhow, I think that she would be a poor candidate against the Republicans, but may still be able to pull out a victory. (Their strongest candidate is Jeb Bush -- imagine another Clinton-Bush race.) If she doesn't get the nomination, Biden would be a strong contender, after that, it's not clear who would be likely to win. But I think most of the possibilities would be stronger than Clinton.