Wednesday, 7 November 2012

Obama's second terms

President Barack Obama’s re-election bucks a trend. Not many Western leaders have gone to the electorate and survived when their economies are in recession. Yet, he succeeded despite America's weak economy and high unemployment. 7.9% to be precise.

He even bucked the usual fate of post war US Presidents.   Not since the days of the New Deal of Franklin Roosevelt has an incumbent kept his job when the economy is bad. Ex-Presidents Gerald Ford, Jimmy Carter or George Bush Sr. all faced the wrath of the voters and were kicked out after one-term in the job.

But it might be a case of regretting what you wish for Obama.
He just by the slenders of margins won the popular vote.  It is very much a nation split in half. 

The vote will give the Republican majority in the House of Representatives every justification to frustrate the Democratic President.  

So Obama can look forward to a difficult second term with his proposals held up by a highly partisan legislature. 
Although last night gave him a few more Democratic senators to ease his burden, his task is still immense.

But what relevance is that to us in Wales? I hear you say.

Well, that relevance can be summed up in two words “fiscal cliff.”

Last year in order to get his budget through the President had to reach a deal on tax and spend. This is a car crash agreement. 

Unless there is some change, $7 trillion worth of tax increases and spending cuts will occur in America over the next ten years. 

The scale is so immense, it will pay havoc with the US economy.  A double dip recession is projected for the first part of next year. So unless the newly returned President can get these legislative proposals changed we’ll all be in trouble.

The American economy to a considerable extent still drives the world economy. If the US sneezes the UK catches pneumonia. As the poorest part of the UK, God help Wales in such circumstances.

So we’ve all got to hope that good sense rules the day and agreement can be achieved, and changes happen. The omens don’t look good, but we can but hope. If not, to quote Private Frazer from Dad’s army, “we’re all doomed.” 

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