Discussion: (9 comments)
Comments are closed.
A public policy blog from AEI
Not a big fan of the “win by losing” argument. Better to control your own destiny rather than hoping the incompetence of others translates into opportunity for you. But RCP’s Sean Trende does make a strong case for why a Romney loss might be a blessing in disguise for Republicans:
All in all, Democrats would have been much better off if Grover Cleveland hadn’t overseen the Panic of 1893. If Charles Evans Hughes is the one who has to deal with settling World War I and its aftereffects, James Cox probably wins in a landslide in 1920. If Gerald Ford wins in 1976, 1980 is likely an ugly year for Republicans, and Ronald Reagan is never president.
This year in particular strikes me as one where the winning side should be careful what it wishes for, especially if it takes full control of all three branches of government. There’s a very good chance that the next four years will be every bit as rocky as the last four, if not more so. …
Maybe Obamacare will work as advertised. Maybe we can attack a gigantic Middle Eastern nation without any major problems. Maybe the Fed can unwind massive quantitative easing smoothly. Maybe our economy will surge as a result of additional stimulus and/or supply-side tax cuts, and the debt will take care of itself.
Maybe. But if things don’t turn out for the best here, I sure wouldn’t want to be the one governing. Sometimes you really do win by losing.
Here is the other side of that trade. Americans are pretty gloomy right now. Three years into a recovery, most people still think the country is headed in the wrong direction. Indeed, a recent analysis by Citigroup concluded a permanent acceptance of the New Normal may have set in. In light of that, beating expectations might not be too high a hurdle for a second Obama term.
And what if, for example, the current CBO forecast is correct:
Now keep in mind, this forecast assumes we go over the fiscal cliff. Yet even so, unemployment would be creeping back toward 6% by Election Day 2016, and GDP growth would be hovering just under 5% for back-to-back years. And if you assume at least part of the fiscal cliff — and recession — is avoided, the final numbers might not be a whole lot different in 2016, but the ride getting there might be smoother.
And what if the Fed’s new open-ended bond buying program really is able to boost growth and job creation? Voters would certainly be tempted to give Obamanomics credit for the modest acceleration in the recovery. He would become the Recovery President — even if that recovery were mostly due to the economy’s natural recuperative powers and House Republicans keeping any more bad stuff from happening.
A just-enough improved economy plus New Normal expectations might be enough to make Hillary Clinton or Joe Biden or Andrew Cuomo the 45th president of the United States. Obamacare forever. Plus four more years in which neither entitlements nor the tax code would get the pro-market reforms they desperately need.
See you in 2020.
Comments are closed.
1150 17th Street, N.W. Washington, D.C. 20036
© 2015 American Enterprise Institute for Public Policy Research