Barack Obama’s carefully crafted economic populism carries the day…and then the next three months?

The media are a huge factor in most elections in the US, and outside of Fox News and the rightwing press, most of the major news outlets were more sympathetic to Obama than to Romney. They still helped Romney quite a bit, however, especially with swing voters, with poor reporting on key economic issues. Most Americans didn’t know that the federal stimulus had created an estimated 3m jobs; in fact, they didn’t even distinguish the stimulus from the unpopular federal bank bailout. They didn’t understand the benefits that people would derive from Obama’s healthcare legislation. They didn’t know that they’d had their taxes cut under Obama. And millions believed the hype that federal deficit spending and the US public debt were major problems. (For the record, the US currently pays less than 1% of GDP in net interest annually on the federal debt – less than it has paid during the past 60 years.)
The confusion on economic issues was probably the most important influence on swing voters, who supported Romney against their own economic interests, thinking that the economy might improve if he were elected. For this, and other misunderstandings, we can thank the major media, although we should also include the public relations blunders made by the Obama team. Perhaps the biggest strategic error wasPresident Obama’s refusal to go after Romney’s proposal to cut social security, thereby losing the majority of senior citizens’ votes (a big vote in swing states like Virginia and Florida), which he could potentially have won by defending America’s most popular anti-poverty program.

Obama’s silence on social security is a bad omen for the future of his second administration, when – facing almost immediately the “fiscal cliff” – political, media, and business leaders will be pressing for a “grand bargain” on budget issues that will screw the vast majority of Americans. It will take a lot of grassroots pressure to prevent the worst outcomes: likewise, to get us out of Afghanistan and to prevent another disastrous war, this time with Iran. Obama’s foreign policy has been mostly atrociousand the never-ending “war on terror” continues to expand, while most Americans’ living standards have been declining.

Bill Black interview

Bill BLACK: Yes. The president came into office talking about the possibility of this grand bargain—more than the possibility; this desire reach it. And then he tried to reach it in budget discussions with the Republicans. They refused.

He just a few days ago went and met with the editorial board of The Des Moines Register, the leading newspaper out in that portion of Iowa, and he had a discussion off the record, and emphasized that because it was off the record he could be more blunt, and said that his first course of business, and one that he believed he could get done very quickly should he be reelected, would be to strike a grand bargain. And he described the grand bargain, and there would be $2 in budget cuts for every dollar in increased taxes.
So this grand bargain is: we will weight this much more heavily towards killing social programs, or at least cutting them back significantly and raising taxes on the rich.

Now, that’s got most of the attention from progressives, but note two other things that he was saying. One, he’s talking about austerity. He’s talking about following exactly the kind of model that Europe has followed that put them gratuitously back into recession, and indeed into a Great Depression. And as we’re doing this interview, it has just come out that European unemployment reached a new high in September, which is the latest month that they had data for. So this has cost millions of Europeans their jobs, and it’s Great Depression levels of unemployment in Spain and Greece, and growing in many other nations. So this is insane to follow this strategy.

Glenn Greenwald at The Guardian  writes:

So the delirium of liberals this morning is understandable: the night could scarcely have gone better for them. By all rights, they should expect to be a more powerful force in Washington. But what are they going to get from it? Will they wield more political power? Will their political values and agenda command more respect? Unless the disempowering pattern into which they have voluntarily locked themselves changes, the answer to those questions is almost certainly “no”.
Consider the very first controversial issue Obama is likely to manage, even before the glow of his victory dims, literally within the next couple of weeks. It is widely expected – including by liberals – that Obama intends (again) to pursue a so-called “Grand Bargain” with the GOP: a deficit- and debt-cutting agreement whereby the GOP agrees to some very modest tax increases on the rich in exchange for substantial cuts to entitlement programs such as social security and Medicare, the crown legislative jewels of American liberalism.

Indeed, Obama already sought in his first term to implement sizable cuts to those programs, but liberals were saved only by GOP recalcitrance to compromise on taxes. In light of their drubbing last night, they are likely to be marginally if not substantially more flexible, which means that such a deal is more possible than ever.