Can Obama fulfil a fiscal grand bargain?

Both Barack Obama and the Republican Party will feel confirmed in their fiscal cliff negotiating stance following yesterday's electoral results. But for the first time in a long while, Obama has the initiative.

There were endless prognostications over the likeliest pathway for Barack Obama to the White House. In the event, the president took them all, winning Virginia, Ohio, Colorado, Iowa, New Hampshire and it looks like Florida even – a state that most pundits had expected Republican challenger Mitt Romney to take comfortably.

In spite of having only just squeaked a victory on the popular vote (a tally that will not be confirmed for a few days), Obama managed to hold on to the diverse coalition that brought him to office in 2008. Of the big sweep four years ago, only Indiana and North Carolina were missing in 2012. And in spite of fears over the enthusiasm gap, Hispanics, African-Americans, young voters and college-educated women all turned out in big numbers for an Obama second term.

Obama’s second victory was certainly less glamorous than his first. And his campaign was a pale shadow of 2008. Yet given the still parlous state of the US economy, and the fact that unemployment remains at about the level it was when he took office, his 2012 success was even more unlikely. It was certainly harder to pull off. Ultimately it was a contest between a weak economy and an even weaker Republican nominee. Both the US economy and Romney improved their performance during the general election campaign. Romney even managed to pull into the lead for a few days after his strong showing in the Denver debate. But the economy timed its recovery even better, adding 171,000 jobs last month
and almost as many in September. In the end, that may have been the most important contributor to Romney’s defeat.


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