Friday’s economic data point to a continuing recession, but one in which the worst may be over: job losses are beginning to decelerate, there are moderately encouraging signs in retail spending and consumer confidence, and some of the hardest-hit home markets are showing sales upticks. The stock market, a leading indicator typically six months ahead of employment and GDP swings, has shown the largest percentage gains in years over the last two months.
Whether the worst is really over is hard to tell. Still, since much of the nearly $800 billion in stimulus spending will only begin to impact the economy in the coming months, it’s reasonable to expect that things should get better; in that case, the country may be officially out of recession by the end of the year. Much rests on the health of the financial system, which is still shaky, but there have been encouraging signs in the banking sector as well; banks currently don’t need as much new capital as once feared, and a serious financial collapse now seems a remote possibility.
If there is reason for cautious optimism for the country’s economic health, there is no such (even qualified) good news for the GOP. In the opening weeks of the Obama Administration, the Republican Party appeared to stake its political future on the hope that Obama (and the country) would fail, and that they would be able to put the blame squarely on the President and the Democrats. This was always a risky proposition, made even riskier by the timing; the likelihood that the recession would continue through the 2010 mid-term elections was always dubious.
By voting nearly unanimously against virtually all of Obama’s major spending initiatives, the GOP has put itself in a lose-lose position. If the economy turns around, Obama and the Democrats will be able to take all the credit; if things get worse, Democrats can make the case that things would have been far worse had we followed the GOP’s advice. While the government is running record deficits, federal red ink has never been a hugely motivating political force. In the midst of the worse recession since the 1930s, it won’t matter this time, either.
People vote their pocketbooks more than anything. By painting themselves into a corner on all matters economic, the GOP will have nothing left to fall back on but the culture war issues that have less and less resonance. The country is becoming increasingly tolerant of gays, and the stridently anti-abortion forces represent no more than 20% of the country.
To compound its problems even more, the face of today’s GOP consists of a discredited old guard (e.g., Cheney, Gingrich, and McCain) and a new guard (Rush Limbaugh, Michael Steele, and Sean Hannity) which speaks only to a sliver of angry, bitter voters: those not guided by reason, and who totally turn off independents and moderates. As many on the blogosphere have noted, the current spokespeople for the GOP are almost a dream come true for Democratic activists.
In the end, America needs a robust multi-party democracy. With the GOP seemingly bent on political irrelevance, perhaps it’s the time for the emergence of a new national party. Either way, as long as Obama and the Democrats don’t make any major missteps, the country appears to be theirs to govern for a long time to come.
Jason Scorse