Finally it's over--but what happened!?

Now that the mid-term elections are finally over, President Obama may not feel like it, but he is a man for whom fortune has smiled upon. The new kid on the block from Illinois who joined the United States Senate in 2005 could have never expected to become President in less than four years. Though he has never lacked in self-confidence, I am sure that he thought that his chance to run would come much later than it actually did.

One of the conditions that made it possible for Barack Obama to be swept into office was the financial panic following the utter collapse of Lehman Brothers just two years ago in September, simultaneously exposing John McCain’s limitations in his understanding of basic economics. Obama was not only better at communicating with the electorate, be also had that distinct coolness about him that projected him as the man with the plan for the times that were becoming increasingly troubled by the hour. At his inauguration, President Obama enjoyed comfortable majorities in both Houses of the US Congress and the President himself literally basked in an international display of goodwill. People like me began to wonder whether the Republicans who had been soundly thrashed in 2006 in President Bush’s own mid-term election (lame duck administration that it was) and then profoundly beaten at the polls in 2008 would ever recuperate.

So, how is it possible that just 21 months later, the Democrats were thoroughly repudiated at the polls and the Republicans have taken control of the House of Representatives and damn near seized control of the United States Senate? The first response is that the same “perfect storm” that blew Barack Obama into office has now come close to wrecking his presidency. As with most things however, there is definitely more to it than simply that. To really understand what has happened, it is important for us to review the past two years in three distinct, different issues: the legacy he inherited from George Bush, the vicious struggle over healthcare reform and the chasm that exists now between the American people and the man whom they voted for in 2008 to engender hope while bringing change to a nation reeling from economic distress and all of the accompanying symptoms of a national malaise.

Thanks George.......

We all knew, even as we pulled the lever, that if elected, Barack Obama would, as the Economist said, ‘inherit the in-box from hell.” Our banking system was near collapse, the economy in general needed critical resuscitation and there were two unfinished wars in Iraq and Afghanistan. If that was not enough, there was also fear over the state of the environment.

Since his election, Obama has had to find solutions to not only these crises, but new ones, as they often do, erupt, such as a BP oil rig exploding and filling the Gulf of Mexico with more than 170 million gallons of crude oil. Nevertheless, the Obama administration tackled some huge economic problems almost before they had cleaned the trash from the mall after the inauguration—and had experienced some apparent success.

At the top of the list was the immediate need to stabilize our financial system. As the Bush administration slipped into oblivion, the President somehow managed to talk a reluctant and almost unwilling Congress into enacting the Trouble Assets Recovery Program (TARP) using $700 billion of taxpayer money to keep the system from sinking. Not only did Senator Obama vote for the TARP, he had to finish the job that Bush started as President Obama. In doing so, his administration resisted the notion to assume public ownership of the banks and instead had his economic advisers devise a system of “stress tests,” a controversial approach that took time to finally kick in but ultimately, appeared to work. So much so in fact, that American banks today are better capitalized than they have been for decades.

The rest of the economy however, was also clamoring for attention. The banks which had been lending to almost anyone, suddenly stopped lending and the ability of consumers to, well, consume, evaporated. Two weeks before the presidential election, the Fed forecast that the rate of unemployment which was then 6.6%, would continue to rise for the next two years and that in 2010, the nation would only witness a moderate recovery.

During the transition, President-elect Obama launched the argument for a stimulus bill that would increase public spending while at the same time, cutting taxes. The American Recovery and Re-investment Act (ARRA) that he signed into law in February 2009 allocated $787 billion, almost all to be spent in two years: roughly one-third in tax cuts, one-third in new spending and one-third in transfers to the states whose budgets had hemorrhaged to the point where state governments had begun to eliminate services, such as police and fire protection as well as the almost wholesale firing of school teachers.

To add to the nightmare, President-elect Obama had to figure out what to do regarding GM and Chrysler. These former bastions of Detroit were now tottering on the edge of extinction, poised to implode and take more than a million jobs in the process. President Bush, in the last days of his presidency threw them a lifeline, but it would be up to President Obama to make the excruciating decision to bail them out. The Obama administration provided GM with $50 billion in return for just a little over 60% of its shares. It wasn’t all easy however, the firm had to declare bankruptcy and fire its management team. As with the banks, this appears in hindsight to have been a good call: both GM and Chrysler (now under new ownership) are back in profit mode and the federal government is preparing to dispose of its ownership status.

Unfortunately (to say the least), not much has changed. Despite the fact that the banking system has been pulled back from the brink of oblivion and the car industry has truly recovered, the stimulus, the Recovery Act in other words, has failed to put even a small dent in the unemployment of millions of Americans. While the economy is not shedding jobs at nearly the rate prior to November 2008, new jobs aren’t being produced either and the rate of unemployment stubbornly hovers at 10%.

Republicans of course, claim that this is proof that the stimulus has been nothing more than one grand failure. Worse, the Republicans have seemed to conveniently forgotten how this whole mess started. Republican campaign ads during the recent mid-terms accused the Obama administration of causing ‘massive unemployment, higher taxes, higher prices’ and anything else they could think of—all conditions that began to manifest themselves between 2000 and 2008. Don’t get me started.

There were, believe it or not, liberal economists such as Drs. Dean Baker and Paul Krugman who argued that the stimulus was not nearly large enough, that the President was being too careful. But at the time, it just did not seem that way. The stimulus combined with the TARP looked like the White House was playing fast and loose with the American taxpayers money.

The land of the free and the home of the brave—just as long as you don’t get sick........

Seven months ago, in what may have been the proudest moment of his presidency, President Obama finally signed into law a legislative act designed to reform America’s system of taking care of its people. The lack of universal healthcare in America has long caused the rest of the world’s industrial nations to at the very least look at us askance, wondering why we could not extend the best medical care in the world to all of our citizens.

That all changed at the stroke of a pen. This new legislation compels all of us to purchase health insurance or be fined. Poorer buyers will get a subsidy and in return for acquiring more than 30 million previously uninsured customers, many of them both young and healthy, insurance companies are compelled to offer more generous coverage. The most critical thing for most of us is that insurance companies can no longer deny coverage due to a pre-existing condition. They are also not allowed to put a cap on how much health care they will pay for over one’s lifetime.

The Republicans, who by now were proudly touting themselves as the “Party of No” fiercely opposed the initiative, and as it struggled through the House, some Democrats were concerned that not one Republican would join with them. Unfortunately, the fear of death panels and all the other cockamamie visceral attacks that came from the Right ensured that no Republican would cross the aisle. In addition, a new political force had begun to make its presence known, the so-called tea partiers, a name selection that must have our founding fathers rolling in their graves. The fact that President Obama relinquished control over the development and passage of the healthcare legislation to congressional Democrats didn’t help matters either and so a bill the Obama administration had hoped to sign into law by the summer of 2009 did not actually become the law of the land until the spring of this year, having failed to garner the vote of even one Republican in either House.

Sadly, the defeat of the Democrats at the polls this past week did not happen due to the merits or even the deficiencies of the healthcare reform bill. The unsettling truth is that despite all of the hullabaloo, and more importantly despite its importance, health care is just not what is most on voters’ minds today. When asked in poll after poll which issue would impact their vote this past Tuesday, 35% of the electorate asked chose the economy and jobs while only 10% chose healthcare. The irony may be that the reason why American voters didn’t choose healthcare is because President Obama’s victory in getting the legislation passed may have taken that issue out of the limelight. And to be truthful, at a time of economic distress, it is no wonder that most Americans are more concerned about how to survive than they are concerned about getting sick.

Where have all the flowers gone.................

Two months ago, Gallup published a poll in which it listed five of the Obama administration’s main achievements and asked respondents whether they approved of them. A majority (61% to 37%) approved of one: the reform of the financial regulations passed this past summer. Every one of the other four was rejected: the rescue of the financial system (61% to 37%); the stimulus (52% to 43%); the bail out of the auto industry (56% to 43%) and healthcare reform (56% to 39%).

There is absolutely no doubt in anyone’s mind. The mid-terms election has ignited the struggle of President Obama to save his presidency. On the campaign trail these past few weeks, there has been a slight resurgence of the candidate Obama as he connected at least with his base, which in itself is quite a victory. At a speech in Chicago just hours before the election, he put into words the strategy of the Party of No, describing Republicans as folks who while understanding that they had created a huge economic disaster, could distance themselves from ownership of the failing economy by just saying “No!” to everything Obama and the Democrats tried to do. And by saying no to even the kind of policies they have historically supported like helping small businesses or cutting taxes, they could be angry with those who are struggling.

There is no doubt in my mind that while this is simply a too-easy perspective of why things have gone wrong politically for the President and the Democrats, there is also admittedly some truth. What’s more, the kind of attacks that have sprung from the mouths of the likes of Glenn Beck and Rush Limbaugh are more filthy and visceral than any I have seen in six decades. Even the anger from the Left towards George Bush, a president the Left vilified, pale in comparison and despite what they say, there is also no denial that at the very least, the attacks against Obama are not at least tinged with racism.

Of course, the Republicans take an opposing view to this assessment. Republicans claim they have voted against every White House initiative because they felt they needed to assume the posture of a “principled opposition” and resist the notion of squandering Americans hard-earned tax dollars.

Finally, I bet if you close your eyes for a moment and think back to February of 2009 when Rick Santelli, a former Chicago trader, publicly screamed at news of a plan to help homeowners who had become delinquent on their mortgage, “This is America! How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills” you will realize that it was at that moment that the tea party movement was born. As my mother used to say, “It’s going to get worse before it gets better honey.”

Like many who supported Barack Obama in 2008, I expected so much more than what I have gotten these first two years of his presidency, namely, stronger healthcare reform with a public option, comprehensive immigration reform, action on first saving and then improving the environment and most importantly, an immediate exit from Afghanistan.

Tuesday for some may have been the beginning of the end to that dream, but it is my hope and prayer that somehow, these next two years will provide opportunities for the President to have the kinds of accomplishments that will help put Americans back to work, secure the peace and become the kind of leader I still think he is, one who because of his own inherent diversity can help to heal the racial, social and economic divide that threatens to destroy us from within unless we can learn to once again desire to help one another and maybe just a little more importantly, trust one another again.