Why the Democrats Lost : Obama Proved that Six Years of Low Economic Growth is a Total Political Loser: Daniel Henninger

Posted By on November 6th, 2014

http://online.wsj.com/articles/dan-henninger-why-the-democrats-lost-1415233499?mod=hp_opinion

Fifty years from now, no one will remember the names of the one-term Democratic senators or candidates who were washed out in the 2014 midterm elections—Hagan, Udall, Braley and the others. What they will remember is that the Democrats in 2014 became the party of a modern Herbert Hoover. In Barack Obama , they were led by a detached president whose name history will attach to a prolonged, six-year economic catastrophe. They became the party of economic despair. The party of economic despair will always lose.

That is the one certain thing we learned in the 2014 midterms: Low economic growth in the modern U.S. economy is a total, across-the-board, top-to-bottom political loser.

In Wisconsin, where Gov. Scott Walker represented everything progressive Democrats abhor, exit polls said eight in 10 voters were worried about the economy in the coming year. Pre-election polls in Gov. Pat Quinn ’s Illinois said the same thing. He lost. In truly blue Maryland, its new Republican Governor Larry Hogan built his come-from-behind campaign around the state’s stumbling economy.

Normally “economic growth” is an economist’s term of measurement. But during these six lost years, that bad data was physically felt. Barack Obama kept calling it the Great Recession. He got that right. Even the government’s statisticians felt it. Read between the lines of this paragraph in the federal government’s October employment report, on the eve of the election:

“In September, 2.2 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months.”

That reality killed the Democrats. If there’s one economist’s term of art the average person learned in the Obama era, it is“labor force participation rate.” It’s not good.

For decades after World War II, the U.S. economy had an annual average growth rate of 3.3%. Here are the growth rates for each year of the Obama presidency (World Bank data):

2009: -2.8%; 2010: 2.5%; 2011: 1.8%; 2012: 2.8%; 2013: 1.9%

You preside over that performance, you lose. The 2014 growth uptick arrived too late to save the Democrats. The economy was a spent political force for them.

The Obama economic policy has had essentially two prongs: 1) the 2009 stimulus bill’s Keynesian Multiplier (the government spends, and new jobs appear); and 2) let the Federal Reserve figure out the rest.

Editorial Page Editor Paul Gigot advises the President on how best to spend the next two years governing with a GOP-led Congress. Photo credit: Getty Images.

Democratic economists and pundits will still argue for their spend-and-hire theory. Feel free. But after this week’s political blowout, John Maynard’s magic multiplier goes back on the ash heap of history. The Obama Fed, meanwhile, continues its mysterious, five-year strategy of suffocating the interest-bearing savings of middle-class voters.

As to the Fed’s record-breaking Roman candle called the stock market, it didn’t do a thing for turnout. At his news conference Wednesday, Mr. Obama restated his pre-election prescription: Put people to work building roads, bridges and air-traffic control systems.

If allowing economic growth to persist below the U.S.’s historic achievement is a political death trap for the party in power, the future looks bleak for the Democrats. The election eliminated the senators who passed for the party’s political center. What’s left is . . . the left. Operating from behind the Blue moats of California, New York, New Jersey and Connecticut—the left is fine with 2% growth. Progressive Democratic policies on Keystone, power-plant closures and oil exports crushed younger, unionized job seekers. For them, a politics of “sustainable” but low growth amounts to, Let them eat sunshine.

The party’s heroine is the New England progressive, Sen. Elizabeth Warren. She initiated a key Obama legacy, the Consumer Financial Protection Bureau, whose arcane reporting rules are strangling small businesses and gagging community banks—the economy along Main Street. Sen. Warren’s appeal with the party’s progressive base has its presumptive presidential nominee, Hillary Clinton , sounding like an American Evita. The Democratic path back to a level of economic growth that will protect its vulnerable members does not exist now.

Will the majority Republicans escape the growth trap? It might. The GOP Senate class of 2014 is a victory for the serious right. They are a big step up in quality. Ben Sasse, Tom Cotton, Cory Gardner and the others are not the second coming of the 2010 election’s seething young men, but they are not “establishment” Republicans.

They didn’t seek the Senate as a trampoline to the presidency in 2016. They look like seven new allies for the Senate’s caucus of serious Republicans: Ron Johnson , John Barrasso, Marco Rubio , Pat Toomey, Kelly Ayotte , Rob Portman , Lindsey Graham, Tim Scott and Mark Kirk.

The ascendant GOP congressional majority needs to do one thing: Liberate the locked-in U.S. economy. Start opening every valve the Obama Democrats turned shut. That’s the real gridlock. Voters didn’t do this just so Washington could work. Voters did this in the expectation that Washington will now enable them to work. There’s a difference. This is a bet that the class of 2014 gets it.

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