There is an old political saying: "When the economy is bad, the economy is the issue; when the economy is good, something else is the issue." Right now the economy is the issue.
But that might not be the case by the end of 2010. We appear to be moving to a second consecutive quarter of positive growth, marking the formal end of recession. It will take a while, however, before ordinary citizens will be able to feel it. The present 10 percent unemployment rate is unlikely to recede to even the 8 percent level until mid-2010. Even as bank lending and business expansion pick up, employment will be slow to grow. There is a lag of several months, after recession's formal end, before unemployment begins to drop appreciably. The depth of the economic crises has made managers risk averse; they will not rebuild their work forces until they are sure stable growth lies ahead.
Beyond normal indicators, there is an overlay of populist rage over actions taken in 2009 which will not disappear as employment begins to pick up and bankruptcies and mortgage foreclosures slow down. The billions in taxpayer dollars allocated to big banks, the auto industry, the mortgage industry, and politically favored entities in stimulus, health-care and defense legislation will not be forgiven easily by voters and taxpayers. The "tea-party" movement, derided by mainstream media as a convocation of kooks, has its share of political oddballs but it also consists of ordinary people of all political persuasions who are just plain fed up with what they see as the unfairness of policies directed to the well being of big shots and high riders. Even as the economy recovers, this economic anger will linger.
Looking overseas, keep in mind that the war in Afghanistan already is the longest in American history. American troops will not begin withdrawal anywhere near the mid-2011 target set by President Obama at the end of his recent policy review. Over 2009, Taliban strength has grown in both Afghanistan and Pakistan. The only saving element in all of this is that strong majorities in both countries are opposed to Taliban takeovers.
Every U.S. troop in Afghanistan costs approximately $1 million in taxpayer funds. The buildup planned in 2010 will keep costs and casualties rising. The building of effective Afghan military and police forces will not be easily done. One of our basic problems is that Pashtun tribal members are notably missing from military command. The parallels are not direct but one could compare present Pashtun grievances and outright rebellion in Afghanistan to Sunni unrest in Iraq at a time when it was perceived that the U.S. was favoring Shiite governance there.
In Pakistan, by far the more important of the two countries, there is a strong strain of anti-Americanism and weak governance. Military and intelligence elements continue to consort and even finance Islamic fundamentalist movements. We should not misguidedly believe fresh billions in foreign assistance for Pakistan will change either popular or official opinion.
How, then, can we ever leave? It is not as if either a Hanoi or even a Baghdad central government were prepared to restore stability and fight the fundamentalists. Only a dramatic event — such as the apprehension or killing of Osama bin Laden and his principal lieutenants, and of Taliban leaders in both Afghanistan and Pakistan — would provide a backdrop for gradual withdrawal. In the end, we may have to accept some form of Taliban power-sharing in Afghanistan as the price of our exit.
Obama surely will face another agonizing review before mid-2011. Meantime domestic discontent is certain to rise as casualties and spending mount in a war that has no apparent end. If in 2009 the economy was the issue, in 2010 Afghanistan will be the issue.
As for health-care and other domestic business, I have some major concern. I felt great elation in 1965 when the Johnson-Humphrey administration enacted Medicare and Medicaid, and I was heartened when President George W. Bush and Sen. Ted Kennedy led a bipartisan effort to enact a Medicare prescription-drug benefit. I feel no emotion whatever — except a vague foreboding — as the Obama health-sector makeover is on the verge of congressional enactment.
The history of major domestic reforms is that they cannot be sustained unless passed on a bipartisan basis. The pending health-care package was a Democrats-only exercise that got the necessary 60 Senate votes only at the cost of outrageous payoffs extended to favored states and industries by Majority Leader Harry Reid.
The legislation lacks coherence. The new taxes and fees associated with it will begin in 2010; most of its benefits will not kick in until 2014. It is "deficit neutral" only if hundreds of millions of unspecified cuts in Medicare, and big new taxes on higher-income individuals and on business, actually are enacted. The Medicare cuts, in particular, are unlikely ever to happen. The expansions of coverage will help help millions of Americans now without it. But they also will dump huge new obligations on state governments mandated to pay a greater share of ever-rising Medicaid costs.
Final legislation will not embody the "single-payer" model long sought by liberals. It is unlikely to contain the "public option" (a public entity to compete with private insurers) sought as a fallback. There is no catastrophic (or major-medical) coverage. There is no tort reform. There are, rather, dozens of separate provisions which (impossibly) are promised both to expand coverge and reduce costs simultaneously.
Will we be better off if and when Obama signs such legislation? Possibly. In meantime, we should recognize that this is not the historic, 200-years-sought breakthrough which the legislation's advocates claim that it is. It is far less significant, for instance, than either Medicare or Medicaid. Obama and Reid deserve credit for tactical skill in driving Senate Democrats (and two independents) to vote for the legislation. But now Senate Democrats and their House counterparts with 2010 reelection campaigns must face an electorate which, at this moment, one-sidedly says it does not want the legislation.
Cap-and-trade legislation presently is stalled in the Senate. House and Senate financial-reform legislation is moving slowly. Chances of both are no better than 50-50 in the coming year.
Thus the electoral backdrop in 2010, for political candidates of all persuasions, will be a gradually improving economy, an increasingly frustrating war, and populist discontent over what is seen as unresponsive governance by both the executive and legislative branches. At this early stage, Republicans seem likely to gain a near majority in the House and to reduce the present Democratic majority in the Senate. If this is what actually takes place next November, then the second half of the Obama term will make the first half seem politically pleasant.
And what about here at home? State, county, and local governments will be forced in 2010 to get their financial and economic houses in order. Big public-works projects, fresh tax subsidies, and ambitious new programs cannot be launched in the present environment. Yet in Seattle and in King County the two candidates most identified in November elections with sober financial management, Joe Mallahan and Susan Hutchison, were defeated for Seattle mayor and King County executive, respectively, by candidates not identified with such approaches. Will Mike McGinn and Dow Constantine get it?
McGinn will define himself quite quickly by his actions on three pending matters. The first is the state-approved construction of a deep-bore tunnel to replace the Alaskan Way Viaduct. McGinn's opposition to the tunnel was his defining issue in his primary-election campaign. He reversed himself in the closing stages of his general-election campaign and said he could accept the tunnel — although he would resist Seattle's payment of cost overruns above the original estimated price tag. What will he do now?
The second issue is the Mercer Project plan, which would allocate several hundred millions of taxpayer dollars to a remaking of the traffic grid in the so-called Mercer Mess to conform to development plans for South Lake Union. McGinn hedged on this issue during his campaign. However, he has been close to Vulcan, the major developer in the area, in the past and made a Vulcan official, Phil Fujii, one of his deputy mayors. Will he demand that Vulcan pay a greater share of the project's cost? Will he delay the project as currently unaffordable? Will he mandate a reexamination of the project?
A third test will come over McGinn's campaign pledge to extend light rail service to Seattle neighborhoods not now slated to receive it. This was the most certifiably hare-brained promise made by McGinn in the campaign season. The projected three-county expansion of Sound Transit light rail (without extending it further within Seattle) almost certainly will have to be pared back. Its multi-billion-dollar price tag simply cannot be justified on any cost/benefit basis. Will a more realistic McGinn promise, instead, to expand existing bus service to the Seattle neighborhoods in question? Or will he plunge us into another Nickels-like huge capital project principally benefiting its contractors and sub-contractors? If so, a more realistic City Council will have to intervene.
That brings us to the matter of mayoral-city council relations. Will McGinn reverse previous Nickels policy and instruct city department heads to provide requested information to council members and staff? Will he meet with council committee chairs to involve them in agenda-setting in their areas of responsibility? He already has made a promising start in reopening dialogue with neighborhood and community leaders who got an eight-year cold shoulder from Nickels.
Our continuing economic squeeze, however, will dictate that policy come before process and that both mayor and city council, county executive and county council set clear budget and other priorities for 2010 and stick to them. This is no "tea-party" city or county. Nonetheless, a sometimes complacent majority of middle- and low-income voters will be in no mood next year for projects and activities unsupportable by their available tax dollars or by common sense.