Next Year: Re-election Year?

Most of the old adages in politics are true, which is why we call them adages -- a word that means "a general truth that has gained credit through long use."

One such truth is that the state of the economy will be the most important determinant of a incumbent's ability to retain his or her position during a re-election campaign.

In this context, Barack Obama's prospects next year would seem to be dismal. This economy sucks, and particularly for the large segment of independent voters in what used to qualify to be called the "middle class," life is difficult right now.

It makes no difference that a President has relatively little control over the monstrously huge U.S. economy, which is actually one big (but not dominant) piece of an interlocked global economy, Americans are accustomed to holding their President accountable when unemployment (or inflation) is high, growth stagnates, home foreclosures and/or personal bankruptcies spike.

All of those insults exception inflation exist now and have throughout Obama's first term.

There are plenty of other political problems as well. His health reform initiative is widely viewed as largely a failure (including by me); his stimulus package is denounced by the right, although in this case the criticism is largely uninformed. Without the massive infusion of government funds into saving iconic segments of industry such as the Detroit automakers, the extension of unemployment benefits, and the subsidy of Cobra benefits for unemployed workers, the misery felt by "middle-class" people would have been far worse.

Furthermore, one by one, the companies that were "saved" by government subsidies have been paying Uncle Sam back so the twin evils denounced by the under-informed, i.e., socialistic takeovers of businesses and bankrupting the government, proved to be fantasies.

Obama's party suffered losses in the mid-term election that are making his second two-year sub-term challenging. Who knows how far the Republican majority in the House is willing to take its game of chicken that may force the government to default on some payments later this summer.

The dilemma for Obama is that even if the GOP forces a default, followed by whatever series of compromises to bring the government back into the real world, who will pay the political price next year? That's where the old adage about the economy cuts against the President -- a confused and enraged electorate expect him to remain in control of something that may prove to be uncontrollable.

There is a kind of dangerous purity of thought behind the Tea Party/extreme right's desire to cut government radically, to slice the deficit, and to bring the national budget more into balance. It's seductive to imagine these ideas are practical, or that even if they are not, that they are the "right" thing to do.

But, as usual, deceptive simplifications of extremely complex systems prove too good to be true.

Government agencies may be bloated in some cases, but every "cut" costs someone their job, and suddenly another family is without the means to support themselves, or contribute their earnings in the form of consumer purchases needed to drive economic recovery.

Government investments in infrastructure and subsidies drive business development -- there would be precious little innovation without the role of governments on the state, local and national level providing the incentives that they do for small businesses to launch.

Believe me, I cover this sector, and there are plenty of senseless rules and regulations I'd love to see sliced away to help entrepreneurs even more -- such as mindless payroll taxes imposed by cities like San Francisco -- but at the same time there are tons of tax breaks, preferential zoning decisions, and public subsidies that promote innovation.

Think about DARPA when you think about government investments. We wouldn't have the Internet, for example...

So, while much of the rhetoric that boils over from time to time seems logical or at least believable (until you start to analyze it closely), the facts are that neither the President nor Congress have enough power to "fix" this economy. That will depend on global market forces, and the actions of other governments and private institutions over which they have little or no control.

The government of China, for example, or the oil multinational companies.

Since the vast majority of people live in a state of unending economic ignorance -- I think that is a fair generalization -- it is easy for politicians to exploit that ignorance in pursuit of their own narrow electoral objectives.

Will Obama be re-elected?

In spite of everything above, yes, he will.

The reason is there is no credible opposition. I'm not saying that a credible opponent will not yet emerge, because there is time, no matter what the political hacks tell you that it's "almost too late" for that to occur.

Nonsense, the right candidate who could unify the opposition and motivate the Independents in this time of economic pain could most definitely mount a strong challenge to Obama next year.

The President is already raising a lot of money -- perhaps a billion dollars -- and he will rightly accrue the benefits of (a) having ordered the Navy Seals unit to go into Pakistan and get Osama bin-Laden; (b) having through speeches and deeds helped inspire the uprisings in the Middle East and North Africa; (c) called out and made foolish the "birthers" like Donald Trump for the sideshow clowns they are; (d) improved this country's standing around the world, especially in Europe and Asia; (e) provided strong statesmanship skills in many of our foreign relations (helped here by Hillary Clinton); (f) and ended the war in Iraq.

He will have a few other policy victories to point to, but the outcome of the showdown with Republicans this summer over the deficit looms large. If he escapes the time bomb inherent in backing down either too soon or too late -- or if the Republicans misstep by overplaying their hand (a distinct possibility) -- Obama will have eliminated the major known threat still facing him on the road to re-election.

No matter how that turns out, however, if the opposition party splinters into two camps -- say, the Mitt Romney and Sarah Palin camps -- you can be certain that the old adage about the economy will be trumped by another one: "Divide and Conquer."

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