Please indulge a bit of educated speculation.
Throughout President Obama’s first term many economists have predicted another major economic crisis as big or bigger than 2008 in the not-too-distant future. Proposed contributing factors include the massive debt held be several European countries and toothless financial reform in America. Regarding the latter, long story short, investment banks are still allowed to engage in pretty well the same highly risky trades as they were before the crash. These risky trades offer the potential for large profits and large – even devastating – losses. When the trades work out, the profits are entirely privatized – going to investment firm executives and professionals and to investors. But when the trades flop, the losses can be so massive and diffuse as to threaten broad swaths of the greater economy. As a result, the investment firm may end up receiving a government bail out so as to stave off a broader collapse. So while profits are entirely privatized, risks and losses may be significantly socialized.
It should be no surprise that a President – and indeed an entire political system – that is disproportionately funded by Wall Street donors, continues to allow institutional investors to do what they want – take big risks where, if they win, they win big, and if they lose, they don’t really lose that much, but everyone else does. Meanwhile, as this has been happening, what have the Republicans been doing and saying? They’ve been painting Obama as a radical liberal Democrat (notwithstanding the fact that his policies have been largely un-progressive, very corporate-friendly, and much more inline with Republican platforms than liberal Democratic values). What’s more, no matter how much Obama has conceded to Republican negotiation demands, filling up his proposals with one Republican provision after another, they have continued to vote against his initiatives.
As Obama & Co. have advanced corporatist economic policies, Republicans have painted him as a radical leftist. If the economy crashes under his watch, Republicans will blame him and liberal Democratic ideas.
So, if and when the economy takes a dive, what will happen if Obama is still in office? The Republicans will blame him! Economic performance under a sitting President is historically the top predictor of whether the President (or someone else from the President’s party) is chosen in the next election. Economic catastrophes are electoral catastrophes. And what is more, the Republicans will cite the collapse as proof that liberal ideas don’t work (ignoring that it was corporatist policies, not liberal policies that sunk the ship). More still, they’ll be able to point back in time and say “look, we voted against him constantly. It wasn’t us, it was him” (ignoring that a disproportionate amount of the most toxic ideas were demanded by them). In the end, when they win they will very possibly have a legitimate (albeit, grossly misinformed) popular mandate to take the country on a hard right turn. But it won’t be a simple libertarian capitalism that they will promote. It will be crony capitalism under a false banner of pull-yourself-up-by-your-bootstraps free market capitalism.Perhaps it will be led by Marco Rubio – young, good-looking, well-spoken, palatable-to-the-mainstream, and an olive branch to Hispanic Americans, a base that Republicans will be desperate to win back.Then four or eight years later some new Democrat will come tell us about Hope and Change.