Why American Expats May Be Preoccupied For The Next Day Or Two

2010-01-19

I usually don't write about pure US domestic politics as it's outside the scope of this blog. However, in this case I'll make an exception.

Obama came into office last year with majorities in both legislative bodies and fairly clear mandates to work on the economy and health care, among other things.

Because Americans are kind of pissed off and gloomy at the moment, everyone knew that Obama only had a limited period of time to show results/get things done before people turned their ire on him.

That window has apparently closed, for reasons that are a bit complicated and have to do with the rules of the legislature and a special election being held Tuesday in the state of Massachusetts.

It's now possible that there will be no health care reform, shitty or otherwise; that will become clear in the next few days. You can probably forget about climate change legislation. If the economy stays in the doldrums, you can forget about another round of stimulus spending.

Enough on that. Lucky for me, Richard at The Peking Duck has already written a post on this. I'm basically in agreement with everything he says on the subject. Sounds like he is reading the same news/blogs as I am and is therefore in a similar state of depression.

Any secondary China effects to think about? Too early to say, I suppose. However, Obama might have a lot more time on his hands in the near future, since he will have no chance of actually getting anything done legislatively. Presidents often turn to international issues when that happens (remember Clinton's second term?), so perhaps his guys will be putting in more time with China matters.

This could be good or bad. If things spiral down and we have more and more trade disagreements, then this might not be a positive development.

Moreover, as the Democrats move forward towards the mid-term elections later this year, desperation may result in a nastier, more populist set of campaigns. And you know what happens when we get populists catering to a bunch of unemployed folks, right? Yep, lots o China bashing.

With respect to multilateral issues, it's hard to see a rosy scenario for climate change. Also, if Obama doesn't have the power to get anything else done on macro issues and the US economy sputters, that probably does not bode well for China's exports, which are still an engine for growth here (despite some contrary opinions out there on the subject).

This US political development could have major repercussions. Stay tuned.

Tags: U.S.-China Relations