James Carville, the former Clinton political advisor and always entertaining TV commentator, is still right.
No matter what you do, no matter where you go, everything starts and ends with a dollar sign.
In the wake of Republican Scott Brown’s stunning upset over the hapless Martha Coakley to replace the legendary Ted Kennedy, the message could not be any clearer. With unemployment still hovering above 10 percent and the timetable for economic recovery uncertain, the anger and mistrust seething among the electorate is palpable.
Brown tapped into that boiling resentment while Coakley was like a rabbit caught in the gaze of an 18-wheeler. Despite the fact that Massachusetts is overwhelmingly Democratic, the fury over the state of the economy cuts cleanly across party lines.
Brown was not swept into office by Republicans or Democrats. Rather the former pin-up model’s victory was an unmistakable message from middle-class voters flattened by the recession, They are infuriated by the uneven nature of the recovery.
Rearranging Priorities
The majority of Americans still want healthcare reform. Most support the noble notion of tackling climate change. They simply want economic stability and security first.
While the President’s numbers have dropped precipitously since his inauguration a year ago, most Americans still believe he has the tools to lead. But unless and until the voters perceive that the economy is his No. 1 priority, other Democrats will continue to fall, and the President’s political standing will be undermined.
This explains why the President is wasting no time getting back to basics.
Today, President Obama will offer proposals to limit financial institutions’ size and trading activities as a way to reduce risk-taking. The proposals will be part of an overhaul of regulations and will specifically address firms’ proprietary trading.
Obama is renewing his focus on economic issues, tapping into voter anger about the struggling economy, taxpayer bailouts and growing bank profits at a time of 10 percent unemployment and a federal deficit that rose to $1.4 trillion last year.
Last week the President announced a plan to impose a fee on as many as 50 financial companies to recover losses from the federal government’s Troubled Asset Relief Program. It would be imposed starting June 30 on companies such as New York-based Citigroup, Inc., insurer AIG and Charlotte-based Bank of America. Neither has repaid the taxpayers.
In the coming weeks and months, there is no question that the President and Congress will turn their attention to rebuilding the job market. New jobless claims rose by 36,000, to 482,000 in the week ending Jan. 16. By anyone’s reckoning, the employment picture will continue to be dismal through the latter part of 2010 or longer.
Court Ruling Portends Huge Change
Many jobs eliminated in this downturn won’t be coming back. This is a daunting challenge that will require every ounce of the President’s political capital to overcome.
Following the political turmoil resulting from the Massachusetts election, neither the President nor the remaining Democratic majority is likely to abandon their quest to revamp healthcare. But, they will surely scale it back in an effort to expedite its passage ahead of mid-term elections.
The landscape of the upcoming elections also will be changed by today’s Supreme Court ruling, overturning a nearly 100-year limit on corporate campaign spending. Although the Supreme Court’s staggering decision will also add to the political clout of labor unions, it will unleash millions of corporate dollars that could radically alter the outcome in dozens of federal and state races.
To combat this sweeping change to the political battlefield, the President and Democratic leaders in Congress will be forced to return to the issue that catapulted them to power, rage and discontent over the state of the economy. Corporate financing of political campaigns may be able to buy TV time, but it will do nothing to assuage voter animus towards them as long as the economy remains shaky.
There’s a new sheriff in town, and he is walking the same beat. It has been, and always will be, the economy, stupid.
John Cohn is a senior partner in the Globe West Financial Group based in West Los Angeles. He may be contacted at www.globewestfinancial.com
