Implications of Obama’s Victory

All of the major networks have called the election for Obama, and it’s pretty obvious that he’s going to win, even though the Romney campaign has not yet officially conceded. It’s an impressive political achievement for the president and his supporters, especially if (as now seems likely), he does better in the popular vote than most national polls predicted. The Democrats also scored an important success in retaining control of the Senate in a year where the GOP hoped to make significant gains.

For me and most other libertarians, this election was always a choice of evils and I shed few tears for Mitt Romney. But I do think he was the lesser of the two evils on offer this year. Obama’s reelection will likely have at least two major negative consequences from my point of view. First, Obamacare is likely to stay in place. Although it remains somewhat unpopular – as shown the by the president’s reluctance to bring it up in the campaign – he is going to hold onto it successfully. Second, Obama will get to replace any Supreme Court justices who retire or pass away during the next four years. With four justices in their mid to late seventies right now, there’s a real chance he will get at least one or two more nominations. All conservatives and libertarians can do is hope that Justices Anthony Kennedy (76 years old) and Antonin Scalia (also 76) will remain healthy and uninterested in retiring. But even if Obama gets to replace one of the liberal justices, such as Ruth Bader Ginsburg (79), there’s a big difference between a justice who probably has only a few years left to serve, and a much younger one who could stay on the Court for 25-30 years or even longer.

On the other hand, the GOP did retain control of the House of Representatives, so divided government will continue. Other things equal, divided government helps restrain the growth of the state. And exit polls show that a strong majority of Americans believe that government is “doing too much.” Whatever mandate Obama may have, it is not a mandate for increasing the size of government, or perhaps even one for keeping it at its current bloated size. In considering Obama’s victory, it’s important to remember that a close win akin to the GOP victory in 2004 was roughly in line with projections from standard electoral models based on the state of the economy. Although the state of the economy was poor, it was on just enough of an upward trend relative to 2008 to give Obama a better than even chance of winning. When the final vote results are tallied, it may turn out that Obama has outperformed historical expectations; but probably not by a large margin.

Thus, it’s not out of the question that Obama’s second term will result in a “grand bargain” with the congressional GOP under which spending is cut substantially, while revenue is increased primarily by eliminating deductions rather than by raising tax rates: the famous proposal put forward by the Simpson-Bowles Commission. Obama will, I am sure, insist on raising tax rates “on the rich,” and probably get his way on that, at least to some substantial degree. But that might be a tradeoff worth making if it’s accompanied by major spending cuts. On that front, it’s worth noting that Obama and the Democrats are more willing than the GOP to cut defense spending, which even relatively hawkish libertarians like myself believe is necessary. That said, Obama’s victory probably will preclude – at least for some time – the kinds of major constraints on entitlement spending that Republicans such as Paul Ryan have been advocating, which is a big negative.

I also hope that the president turns out to be right in his prediction that the election results will lead the GOP to agree to a deal on immigration reform.

In addition to immigration reform (which seems surprisingly popular according to exit poll results I saw on CNN tonight), such libertarian causes as property rights and drug legalization also gained ground tonight, according to referendum results. Colorado and Washington just voted to legalize marijuana.

On balance, Obama’s reelection involves far more negative consequences for the cause of limited government than positive ones. If I thought otherwise, I wouldn’t have opposed it in the first place. But the political struggle over the role of government in our society is far from over.

UPDATE: I should emphasize that I’m not making any confident political predictions here. I think it’s possible there will be a fiscal “grand bargain” that is an improvement on the status quo from a libertarian point of view. I also think there’s a reasonable chance that we will get bipartisan immigration reform. But either or both could well go the other way. I have somewhat greater confidence in my negative predictions: that Obamacare will survive and, of course, that Obama will get to fill any Supreme Court vacancies that might arise between now and 2016. But both of these points are pretty obvious.