Overall, the main factors sustaining growth in living standards for American households outside the top 20 per cent have been an increase in the labour force participation of women and a decline in household savings. Over the period since 1999, consumption financed by borrowing against home equity has been the main factor offsetting stagnant or declining median household incomes.

If one wanted to be reductionist about it, the end of the capacity to prop up living standards via credit (and the increasing costs of healthcare and middle-class positional goods such as higher education) explains much about Barack Obama’s victory (and his victory in the suburban vote was a significant component of the overall win).

Quiggin is a little more confident about the political implications of the end of the trickle-down theory than I am:

Politically, the failure of the trickle-down theory seems likely to produce a resurgence of the class-based politics pronounced dead in the era of economic liberalism. The contrast between the enforced austerity of any recovery period, and the massive, and massively unjustified, excesses of the financial elite during the boom period, will produce a political environment where phrases like “malefactors of great wealth” no longer seem quaint and old fashioned. (Just after writing this, I Googled it, and found it as the title of a piece in Time Magazine’s Swampland by Joe Klein, among the most reliable indicators of the political zeitgeist.)

There’s no doubt that neo-liberalism was itself a class-based politics – of the right. Whether or not there’s a swing away from this hegemonic political position, though, is somewhat doubtful. The mild ideological dissensus Kevin Rudd has just highlighted in his essay in The Monthly is one reflection of a boader debate. In America itself, the intensity of the Republican opposition to Obama’s stimulus measures is significant (and not unexpected – despite the superficial political commentary to the contrary). I also have no doubt those who currently hold economic power will not give it up without an almighty fight, global financial crisis or not. The question is – which side are the Obamas, Browns and Rudds of the world really on?

Ayers says:

I also felt from the beginning that this is a cartoon character that’s been cast up on the screen and I didn’t feel personally implicated in that character.

Well, what I didn’t want to comment on was the political campaign. I didn’t want to enter into that. The reason is simple: I thought that I was being used as a prop in a very dishonest narrative — and I didn’t want to be part of the narrative and I couldn’t find a way to interrupt it. Anything that I said was going to feed that narrative. So I felt that part of this was the demonization of me — certainly that I’m some kind of toxic agent that has to be feared.

The second thing, and perhaps more important, is that I was being used to try to bring down this promising new leader by the old tactic of guilt by association. The idea that somehow — and this is deep in the American political culture — that if two people share a bus downtown, have a cup of coffee, have several conversations, that somehow means that they share an outlook, a perspective, responsibility for one another’s behavior. And I reject that. That guilt by association is wrong and we shouldn’t buy into it.

Read all about it at Crooks & Liars.

There’s a big irony here. The right spent the campaign claiming Obama had some secret (Commie!) hidden agenda. But McCain’s Maverick persona masked Republican extremism as usual, and now we’ve got the Ron Paul factor – a bit of projection going on it seems to me.

Myth #1: The Obama turnout meant that Prop 8 won in California.

But the notion that Prop 8 passed because of the Obama turnout surge is silly. Exit polls suggest that first-time voters — the vast majority of whom were driven to turn out by Obama (he won 83 percent [!] of their votes) — voted against Prop 8 by a 62-38 margin

- Nate Silver at FiveThirtyEight.com

Myth #2: The Democrats’ victory wasn’t comprehensive.

What happened? Overall, the Democrats gained a bit in 2004, a lot in 2006, and some in 2008. But we knew that (see the time series plot in the blog entry linked above). We also see a bit of scatter. Beyond this, yes, there are some patterns. In 2006, the Democrats particularly gained in Republican areas–see how those dots in the lower left of the second graph are way above the 45-degree line? In 2008, the swing is more uniform… Returning to the “How well did the Democrats actually do in 2008? question, I think that one problem is that people are comparing Obama’s vote to Kerry’s vote but then comparing the congressional Democrats in 2008 to the congressional Democrats in 2006. I think it’s more appropriate to compare 2008 to 2004 in both cases. As Paul Krugman put it, “Maybe the reason people don’t see this is that the Democratic House gains were spread over two elections.”

- Andrew Gelman.

Myth #3: Obama would be politically sensible to govern as a moderate gradualist.

So a serious progressive agenda — call it a new New Deal — isn’t just economically possible, it’s exactly what the economy needs.The bottom line, then, is that Barack Obama shouldn’t listen to the people trying to scare him into being a do-nothing president. He has the political mandate; he has good economics on his side. You might say that the only thing he has to fear is fear itself.

- Paul Krugman.

Right wing commentators couldn’t have been quicker out of the starting blocks to proclaim “America is still a Centre Right nation”. In fact they were at it before the votes were counted – Bill Bennett’s lugubrations on CNN is one example folks here might have seen in watching the election coverage. The memes abound. McCain still got 46%! Obama’s win wasn’t big enough!

Such exciteable commentary doesn’t stop to consider, of course, that in a two party system, without the presence of a strong third party challenger, landslides aren’t that common. Ronald Reagan in 1980 received 50.1% of the popular vote, in an election which everyone agrees ushered in an “Era”. Barack Obama did somewhat better than that. And John McCain still pulled in a significant number of independent voters – it’s not too difficult to imagine how wrong the claims that a more conservative candidate would have run better are. Let’s not forget that McCain continually sounded the note that he was someone who often differed from his own party.

Let’s make a couple of quick points here. Most of this speculation – and the accompanying predictions that Obama may be a steady as she goes moderate – is just that. It’s basically worthless, except for what it reveals about the politics of those doing the predicting. We don’t know exactly how Obama will govern. We do know that he’s stated that big challenges will require bold measures. And we do know that an agenda of de facto universal healthcare, economic revival and redressing the plight of middle and working class voters is what he won on. That’s surprisingly radical in the American context. And this election saw a lot of the anti-government rhetoric Reagan ran into town with finally kicked to the curb.

Secondly, let’s consider the fact that the “liberal” scare didn’t work (and the sorts of voters who were ready to believe Obama to be a “socialist” were always going to be in the GOP tent):

Perhaps the most revealing post-election data on that question came from within the defeated McCain campaign. In an interview with Roger Simon of Politico, the Republican candidate’s speechwriter and friend, Mark Salter, disclosed that in the campaign’s own internal polling data, 60 percent of Americans regarded Obama as “liberal.” The campaign thought that would be enough to defeat him, which is why it hammered on the “left-wing” themes.

Baiting the liberals didn’t work this year. Disgusted with the Republican right, voters wanted something different and weren’t afraid to look leftward. That is what “realignment” means.

In the article at Salon from which that quote is drawn, Joe Conason looks at the demographic and political analyses of John Judis and Rey Teixeira. Possibly the best article I’ve seen so far on the shifts in voting patterns and what they entail is by Judis in The New Republic. It’s well worth a read.

If, however, Obama and the Democrats take the advice of official Washington and go slow–adopting incremental reforms, appeasing adversaries that have lost their clout–they could end up prolonging the downturn and discrediting themselves. What might have been a hard realignment could become not merely a soft realignment, but perhaps even an abortive one. That’s not the kind of change America needs–or wants.

Photo of the Obama event in Chicago courtesy of bcbeatty – licenced under Creative Commons.

So, since there was so much discussion before election day of where folks were going to meet up to watch the count in convivial style, how did everyone enjoy their election celebrations? Where did you go? What was the mood? Any good drinking games?

And how’s everyone feeling today?

Conversely, can you imagine Kevin Rudd standing in front of 50,000 people in a sports stadium, making a stirring speech about his dreams and aspirations for Australia, causing every person in the audience and the millions watching on the telly to feel a tingling sense of national pride and hope for their country? Can you imagine John Howard visiting an army base, attracting tens of thousands of supporters, and bringing tears to the eyes of those assembled as he spoke of patriotism and sacrifice for an ideal? Can you imagine Steve Fielding being interviewed by a news program and looking dumbstruck when asked what newspapers he reads? “Well, just the Bible, Katie,” he’d say. “It’s got all the information in it that I’ll ever need.”

Of course, just as it’s true that many Americans rightly vote not on the basis of the putative celebrity status of candidates but for compelling public reasons, we Australians do get passionate about what matters to our collective future and our lives in the political sphere. But, I think, the point retains its force.

So yesterday, Wayne Swan was accused of releasing the midyear budget review on Presidential election day to draw attention away from the projections on growth and unemployment, the media tut-tutted because he couldn’t instantly recall the inflation number and had to consult notes, and Malcolm Turnbull accused him of lacking credentials on “economic management”. Just another day in Canberra…

Elsewhere: Gary Sauer-Thompson on the mid-year economic outlook.

However, there’s some interesting reading at both RedBlueRichPoor and FiveThirtyEight. I suspect the absence of the early vote in the sample diminishes the increases in youth and African-American turnout. And it’s just as well to remember that the election was actually reasonably close in the popular vote, and that the electoral vote map has been tweaked rather than transformed. Trends which were operating this year need reinforcing through the upcoming electoral cycles, and much will depend on Obama’s performance in government. You can never claim that there’s a realigning election on the basis of one cycle (06-08), though my bet would be that this will turn out in retrospect to have been one, for a whole host of more qualitative and interpretive factors.

I haven’t seen any comprehensive data as yet on Hispanic and youth votes’ partisan composition, but some evidence presented during the CNN coverage suggested very strong 60+% Obama votes in both populations. It’s worthwhile noting that the demographics of many states which are swinging to the Democrats strongly – or showing signs of such swings (ie in Texas, Arizona and South Carolina) – are fast changing to a much more heterogenous composition. And that generally, the younger cohort is more socially liberal and less hung up on racial barriers and all the baggage of the culture wars – including among younger Evangelicals.

There’s a lot here for Obama and the Democrats to make hay with in terms of partisan and geographic realignment, if they play their cards well.

Update: Some numbers on the youth and Latino votes:

Latino Catholics appear to have been decisive in flipping three states from red to blue: New Mexico, Colorado and Nevada. Colorado’s nine electoral votes swung into the Obama column with a strong 53% to 46% win and in New Mexico the margin was even larger: 57% for Obama to McCain’s 42%. In Nevada, 55% of the vote went to Obama and McCain took 43%. If Obama delivers comprehensive immigration reform, these three states and their 19 electoral votes will be blue for a generation. They will also likely be joined by Arizona, which might have joined the shift this year had it not been for the home turf advantage McCain enjoyed. Nine points separated the candidates in Arizona, and the state’s ten electoral votes are low-hanging fruit for the Democrats next election.

Latinos are the fastest growing part of the electorate and young voters are just beginning to define their political loyalties. Obama won both groups convincingly: 67% of Latinos nationwide and 66% of voters age 18-29. That bodes well for the future of the Democratic Party.

Update: Simon Jackman points out – in examining “change elections” – that Obama has been elected with the highest percentage of the popular vote of any newly elected Democrat since FDR.

Update: A good post from Crooks & Liars on the Latino vote, and a thoughtful piece at Salon about the demographics and the numbers.

Update: The invaluable Nate Silver has posted a table comparing Obama and Kerry’s numbers on the exit polls among all demographics.

Image of spontaneous street celebrations in Harlem courtesy of matt semel at flickr – reproduced under a Creative Commons licence.

No doubt one of the big stories about the US election will be the influence of the blogosphere and the netroots. In many ways, the rise of the intertubes in politics was an unintended consequence of the Rove approach to politics, as Publius perceives:

The bigger story is that this same anger – this same frustration – has led liberals to organize in more numerous and consequential ways. In the last few years, we’ve seen new think tanks. We’ve seen blogs flower. We’ve seen the rise of media sites like TPM and Huffington with real journalistic chops. We’ve seen unprecedented efforts to register and canvass voters.

In short, we’ve seen a new energy driving liberals back to politics.

In an opinion piece at ABC Online, Barry Saunders sums up the changes that net based activism and citizen journalism have wrought:

The impact of social media on this election has been enormous. Whoever takes office will have to deal with widely available factchecking data, embarrassing videos, rabid wingnuts, opinionated bloggers and TV hosts, and a massive number of new voters and donors who feel they have invested in the American political process – as well as two wars and a collapsing economy. Here’s hoping they know what they’re doing.

John Quiggin writes of the “end of the first age of the blogosphere”:

Once the initial euphoria dissipates, and the inevitable mistakes, failures and compromises/sellouts begin to emerge, it’s necessary to strike a balance between criticising what’s being done wrong and reminding yourself how much worse the other side was and would be again. The attitude of constructive critical support is a hard one to maintain, especially given the habits built up over years in opposition.

We’ve already had a look at Michael Bérubé’s thoughts here at LP:

But perhaps the left blogosphere could be of some use in this regard, no? It needn’t be consolidated fully into Obama Enterprises Inc.; it could serve instead as a forum for writers dedicated to things like “hope” and “change” and “arguing that Obama was wrong to cave on FISA and better not do that kind of thing as President.” Of course, it could also serve as a forum for charting and mocking all manner of Ace-of-Confederate-Red-State-Yankeespade wingnuts as they venture into new realms of sheer barking lunacy that even the world’s sheerest barkingest lunatics have hitherto been unable to imagine. That might be fun. And it could do “shorters” and cat blogging and Theory Tuesdays and Friday Random Tens too. It’s a blogosphere. It’s a big place, with many many tubes.

And Possum makes some sharp points comparing the media/punditsphere and online social media:

Data beat punditry, statistics beat navel gazing, demographic analysis beat wishful thinking.

The intertubes were 3 hours ahead of the network coverage, Dick Morris should never show his face in public again if he had an ounce of integrity, and, most importantly, this has been a demonstration that sometimes things dont happen in the same tired old ways they always have before.

There’s one point I’d like to add to all this analysis.

Going back as early as 1976, commentary about US elections focused on the decline in voter involvement and its eclipse by top-down media strategies. We’ve seen a massive revival in citizen participation and activism, something that was recognised by Barack Obama in his victory speech. The future of this re-engagement will be dependent on how Obama governs, but as he correctly says, it will also be dependent on the preparedness of citizens to continue to act publicly and collectively.

All technology is shaped socially. Blogging, YouTube, and other social media have been enablers and not just causes of this invigoration of democracy. I’d like to see some research and analysis focused on the wellsprings of activism we’ve seen bubbling up. I think that would be, in many ways, a more productive frame through which to look at what’s interesting, distinctive and exciting about this campaign than yet another round of “journos v. bloggers” style articles.

Elsewhere: An interesting post from Terry Flew on the role of satire in the campaign, and some suggestions for future analyses of the results.

Barack Obama’s victory represents a watershed in American history, but it will also have ramifications around the world. Before I head out to celebrate I thought I’d just bash out a few quick notes on some of the policy implications for Australia of this momentous turnaround in the state of US politics:

Climate change

Today’s election result heralds the rise of Green Keynesianism. The US economy is in the toilet and smart economists are advocating direct investment over a more consumer-based fiscal stimulus. Democrats in Congress got a head start last year with the Green Jobs Act, and elements of the President-elect’s energy and environment policies look a lot like a ‘Green New Deal’. This from Time Magazine:

He wants to launch an “Apollo project” to build a new alternative-energy economy. His rationale for doing so includes some hard truths about the current economic mess: “The engine of economic growth for the past 20 years is not going to be there for the next 20. That was consumer spending. Basically, we turbocharged this economy based on cheap credit.” But the days of easy credit are over, Obama said, “because there is too much deleveraging taking place, too much debt.” A new economic turbocharger is going to have to be found, and “there is no better potential driver that pervades all aspects of our economy than a new energy economy … That’s going to be my No. 1 priority when I get into office.”

Calls for a Green New Deal are also starting to gain traction in the UK – and the UN. This can only help the chances of Australia’s version of the Apollo alliance, which released the ‘Green Gold Rush’ report last week calling for investment in green-collar jobs growth.

The Obama campaign’s target for emissions cuts was 80% by 2050 – a fair way ahead of Oz Labor’s as-yet-unaltered election promise of 60% by 2050. With the Arctic ice-sheet melting rapidly even an 80% target is too low for a developed country like the US, but it should certainly give Professor Ross Garnaut reason to revise his pessimism about the likely outcome of the Copenhagen round of climate negotiations. It’s worth noting that the Obama campaign’s climate and energy platform specifically called for 100% auctioning of permits.

Afghanistan

I might leave the analysis of this point for one of our more foreign-policy inclined fellows. Suffice to say that Obama’s win means that US activity is likely to be ramped up in Afghanistan, and given that we’re still there, that will have implications for Australia.

Behavioural economics and ‘choice architecture’

Obama has quoted the ideas put forward by behavioural economists Thaler & Sunstein in Nudge, which looks at ways in which a more nuanced understanding of how humans behave in markets can enable policies which are more flexible than top-down regulation, yet better at addressing common market failures than a free-market approach. Sunstein and Thaler have both been consulted by the Obama campaign. This from the Guardian on Thaler and the Dems:

He “talks a lot” to Obama’s camp, especially the chief economics adviser, Austan Goolsbee. “We gave Goolsbee the book when it was still in proof. He read the whole thing and just lifted some parts.”

Of course, as this post argues, its important to remember that the policy tools informed by behavioural economics can be used towards either progressive or conservative ends.

Multilateralism might get inspiring again

The amazing Ben Brandzel sent an email around a few days before the election listing 43 policy proposals from the book of Obama that kept him motivated while working on the campaign in North Carolina. This was his favourite:

“Save millions of lives and win allies around the world by doubling foreign assistance to cut extreme poverty in half by 2015, and accelerate the fight against HIV/AIDS, tuberculoses and Malaria.”

I can imagine that some UN staff might feel a lot like John Robertson did after the election of the Rudd government – i.e. ‘at least this lot don’t want to kill us’. Regardless, the US’ newfound commitment to multilateral cooperation on serious global problems is about to make the lives of everyone working in international development a little more (there’s that word) hopeful. And that’s got to be a good thing.

Just as an aside, it will be interesting to follow the relationship between progressive think tanks & the new administration. Expect to see the traditional influx from conservative think tanks to Republican administrations mirrored on the Democrat side this time around. John Podesta has been put in charge of the transition phase, which means he’ll play a key role in building the new government. Former Whitehouse chief of staff under Clinton, John is the founder and CEO of DC-based think tank the Centre for American Progress. I met a bunch of very switched-on CAP people when I was in Washington earlier this year – they’re an absolute ideas-factory. Check out their policy platform for signs of things to come.

What does regime-change in the US mean for Australia, and the world? I’d love to hear your thoughts in the comments…