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Analysis: Eddie Barnes on Obama’s victory

Eddie Barnes says economy will be key

Eddie Barnes says economy will be key

A WIN is a win. But the euphoria that greeted President Obama’s 2008 election win four years ago will not be seen again over the coming months as the re-elected President gets back to business.

So what was the overwhelming verdict as the cleaners began to take down the bunting and mop up as the parties went home last night?

The result itself showed up the fact that America remains a heavily divided nation. “Mr Obama’s victory did not show a united country,” declared the supportive New York Times. The President’s victory was one borne on the tide of demographics; he won heavily among the growing numbers of Hispanics and African-Americans. Meanwhile Mr Romney won among heavily among white men. Both parties conformed to stereotype, with Mr Obama cleaning up among the rust-belt poor – handing him Ohio – and Mr Romney winning the wealthy. Despite Mr Romney’s gracious concession speech, in which he wished Mr Obama well in the coming months, it is hard to imagine this mood lasting very long. A more important note was issued by John Boehner, the speaker of the Republican House of Representatives. “The American people have also made it clear that there is no mandate for raising tax rates,” he declared. Mr Obama’s second term will be a damp squib unless he can somehow reach across the floor to the Republicans in Congress, getting Democrats to back spending cuts and Republicans to accept some form of tax increases.

Awaiting both is the “Fiscal cliff”, a $600bn mix of automatic tax hikes and spending cuts due to take effect on January 1 if there isn’t a deal to avert it. Mr Obama’s short-term success relies on finding a way of tackling with it, and putting the country back on a sustainable footing. It may be that Mr Boehner’s group of Republicans will, in the wake of defeat, be in no mood to cave on allowing Bush-era tax cuts in order to help Washington’s coffers. Others are more optimistic. It may be Mr Boehner’s comments last night were simply a negotiating strategy. Mr Obama is also now a second-term president, freed from the shackles of the permanent campaign, who has the opportunity to do what he believes is necessary to retrieve American from the fiscal abyss. Certainly, if these was a united message from the American people, it was to avoid the drastic prescriptions from both right and left, and to focus on bringing the country back from the brink.

For the rest of the world, this economic challenge will be the key focus for the coming months, with the health of American’s economy remaining the driver of the global one as well. A deal on the USA’s financial woes could be the trigger to inject confidence back into markets that, finally, there is a plan. Mr Obama is powerless to act over the Eurozone crisis, but where America leads, so Europe might follow.

But it is not just the economy which faces Obama; so too do a whole raft of foreign policy issues. Early this morning, David Cameron said the first issue he would be raising with Mr Obama was Syria. It may be that the President will now opt for a muscular approach against the Assad regime. And then there is Iran. Obama has pledged that he will not let Iran develop a nuclear weapon, and Israel will keep up the pressure to ensure he keeps his word. Mr Obama can now expect intense pressure from Israeli Prime Minister Benjamin Netanyahu to act quickly.

Nearer home, Mr Obama’s victory will raise mixed emotions in London. Mr Cameron will probably be pleased, having alienated Republicans with his aloof attitude to Mr Romney. At least he has a friend of similar age and outlook, who he knows he can work with. However, right-wing Conservatives will rue the fact that a Republican has missed the chance to get into the White House to show their man how it’s done.

And we now know that Mr Obama will be the President in power who will watch, in 2014, as Scotland decides whether it wants to become independent. With American newspapers already having latched onto the wider geo-political consequences of independence, and the impact it would have on the UK, would Mr Obama ever get involved in such a matter? It is possible. Given the President’s teflon coated popularity this side of the Pond, it remains another reason why Mr Cameron might want to ensure that the Special Relationship, while one-sided, remains intact over the coming months.

 
 
 

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