The 2008 Anomaly

What’s the big takeaway from yesterday’s thumping of Creigh Deeds and John Corzine? There’s certainly more than the usual Democrat/GOP conflict that can be discerned from the results. To begin with, I’ll shamelessly borrow Jay’s comment that “there are times when the leaders need to recognize that the people have their own ideas about which way to go.” An eighteen point Virginia defeat in the President’s own back yard, a state in which he had personally invested POTUS power and prestige in at least five campaign events, was made worse by an embarrassment of Olympic proportions by the Corzine loss in the bluest of Blue states.

These results are symptoms of an underlying tension in the electorate that, frankly, members of the old guard in both parties can’t quite get their heads around. Certainly the debate over ObamaCare, Stimulus legislation, Cap & Trade and Afghanistan will continue to dominate the run up to the 2010 mid term elections; however, there is another factor heavily influencing the electorate that politicians desperately want to avoid discussing: fear. People are afraid. They are very worried about their economic futures and financial well being as they see what may be a massive paradigm change in their standards of living.

Jobs on which had been planned educations and retirements are disappearing forever. Historically such transitions in the work force had been softened by an expansion of small business, but small business formation is frozen because of a lack of liquidity in the banking system. Banks are not lending money to small business. In fact, many are doing the opposite by calling loans on good borrowers as they try to shore up their own balance sheets. In short, small business, which has historically been the engine of job growth for decades in this country, is failing. This failure is depressing consumer confidence, which has the concomitant effect of reducing consumer consumption, which represents 70% of U S GDP.

Of the many lessons that can be learned from yesterday’s elections, probably the most important is that voters resoundingly stated that the President has no plan to cure these problems. Evidence of this is his legislative agenda, which in no way reflects the real concerns of an electorate worried about their financial future, their retirement and their savings. To paraphrase Charles Krauthammer, the 2008 election was an anomaly; the 2009 election may prove to be the norm.

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