What to expect from Obama

Janet Daley:

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So, in one of those bizarre jokes that history sometimes plays, the United States is apparently about to choose as president the most inexperienced, untried and virtually unknowable (because there is so little to know) candidate who has ever run for that office at a time of unquantifiable international risk and unprecedented economic instability: a candidate who, as Bill Clinton revealed in a wonderfully back-handed "tribute", responded to the banking collapse by ringing every expert he could find (including Bill) to ask them what he should be saying.

And not only does it seem likely that Barack Obama will be elected president, but that he will arrive in office accompanied by a legion of new Democratic senators and congressmen which will give his party a lock on both the executive and legislative branches of government, thus permitting it to do precisely anything it wants.

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In truth, McCain's status as an outlaw within his own party ("maverick" is much too mild a word) has meant that he has had only the most ambivalent relationship with what was once a very professional Republican campaigning machine. Those members of the Bush team who have been involved with the McCain-Palin ticket have been accused of being so out of sympathy with its message and tone as to be positively counter-productive.

Combine this with the fact that McCain has been running against not just a super-financed Obama machine but the most monolithically hostile media barrage in electoral history, which forced him to spend most of his time and energy on defensive fire-fighting, and you get a sense of why the Republican effort has so often seemed at cross-purposes with itself.

This media phenomenon may yet prove double-edged. There is just a possibility (maybe I am clutching at straws here, but we shall see) that the relentless onslaught from the mainstream press and television networks has made support for McCain unsayable rather than impossible and that this is producing seriously skewed opinion-polling results. This could mean, to put it in British historical terms, that this election will be 1992 (complete with premature victory celebrations) rather than 1997. Interestingly, in the 1992 election it was the issue of tax that brought about Labour's defeat in the face of resounding leads in the polls. And it is tax policy that is Obama's most dangerous ground. It must be surprising to British observers that his proposal to cut taxes for the 95 per cent of people who earn less than $200,000 a year (down, incidentally, from his initial figure of $250,000) has not straightforwardly won the day in the American national debate.

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In the same "help the little guy" spirit, Obama proposes to raise capital gains tax, thus penalising those whose investment is desperately needed for market recovery. As my economist friends always tell me when I advocate tax cuts for the low-paid: it may seem a morally and politically attractive policy but it doesn't do a damn thing for economic growth. The tiny amounts that the lower-paid receive in such wide-ranging cuts make little difference as a stimulus and if they are balanced by penalties on business and on the investing classes, they are worse than useless.

So what will happen? For what it is worth, I think it will be a close presidential race with the favourite, Obama, winning by a squeak (which is what happened in 1960 when the then favourite, John Kennedy, was the voice of the "future"). Whoever gets the White House, America will eventually return to being what it must be: the economic engine of the world and the greatest testimony to the power of human initiative in history. On both of those counts, it will once again be resented. But it will take a while longer to reach that point under Barack Obama.

Obama is not very smart. He is wrong on the issue of taxes, national security, and energy. He was dead wrong on Iraq and seems determined to lose it if it is still possible. If he and the Democrats succeed expect a longer more costly war.