America’s Constrained Choice

By the time the next US presidential term starts in January 2013, the incumbent will have only limited room for maneuver on economic policy. The real choice concerns the social policies that should accompany a broadly similar set of economic measures; and, here, the differences between the candidates are highly consequential.

NEWPORT BEACH – The conventional wisdom about the November presidential election in the United States is only partly correct. Yes, economic issues will play a large role in determining the outcome. But the next step in the argument – that the winner of an increasingly ugly contest will have the luxury of pursuing significantly different policies from his opponent – is much more uncertain.

By the time the next presidential term starts in January 2013, and contrary to the current narratives advanced by the Obama and Romney campaigns, the incumbent will find himself with limited room for maneuver on economic policy. Indeed, the potential differences for America are elsewhere, and have yet to be adequately understood by voters. They center on the social policies that would accompany a broadly similar set of economic measures; and, here, the differences between the candidates are consequential.

Whoever wins will face an economy growing at a sluggish 2% or less next year, with a nagging risk of stalling completely. Unemployment will still be far too high, and almost half of it will be hard-to-solve, long-term joblessness – and even more if we count (as we should) the millions of Americans who have dropped out of the labor force.

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