How Will the GOP Respond to an Economic Boom?
My CNN column deals with how the GOP must adapt to changing economic conditions over the course of Obama's second term.
Here's the next thing the Republican party needs to rethink. What does it say if and when the United States returns to prosperity?
For five years, U.S. politics have been shaped by economic hardship. In 2008 and 2010, voters rejected the party in power, booting Republicans out of the White House, and then sweeping Democrats out of Congress.
Mitt Romney campaigned in 2012 on the slogan, "Obama isn't working." President Obama responded by attacking Romney as out of touch, assuming (probably correctly) that he could not win by running on his record.
But the indicators are suggesting that by 2013 and 2014, the Obama record will begin to look a lot better, assuming, that is, that the two parties in Washington don't recklessly push the country off the fiscal cliff at the end of the year.
The nation's economy added 171,000 jobs in October 2012, for a total of almost 700,000 in the four months before Election Day. More than half the jobs lost in the crash of 2008-2009 have now been recovered, even as public-sector employment has shrunk by a net 500,000.
The economy is recovering because consumers are less burdened by debt. They are paying down their credit cards, building home equity and strengthening their personal balance sheets.
As household debt burdens become lighter, consumers express more confidence. They are allowing themselves to spend a little more. They are even buying new homes again. Housing starts in October 2012 rose to a level 41.9% over a year before.
Accelerating economic activity is rapidly reducing the budget deficit. The deficit has contracted since 2009 at the fastest rate since the end of World War II, faster even than during the late 1990s boom.
Wages remain flat, and will likely stay flat until unemployment contracts more, but Americans can begin to see better times ahead for the first time in a long time.
As they do glimpse that better future, two things will happen in politics: