Obama's Collapse.

On Tuesday (4/11/14) the US held it's mid-term elections.

Pretty much since the results of the 2012 Presidential elections were announced it has been obvious President Obama's only objective for his second term in office was for his Democrat Party to not only hold onto their majority in the Senate (Upper House) but also gain a majority in the House of Representatives (Lower House). This would have given the Democrats complete control over the two houses of Congress and therefore control over both the legislative and executive branches of the US Federal government.

As it turns out large numbers of American voters did not agree with this plan. In the House not only did the Democrats fail to take seats from the Republicans they actually ended up losing seats with the Republicans majority in the House growing by 13 seats. This picture was repeated in the Senate with the Republicans gaining 7 seats giving them a majority of 2 seats with 3 seats left to be decided. The Republicans gains include the seat for West Virginia which has been Democrat since 1958.

This result means that Obama has now become what is termed a "Lame Duck President." That is to say that without control of either of the houses of Congress Obama cannot pass legislation of his own. Therefore if he wants to make any changes to US laws or significant changes to US government policy Obama must first be  granted permission to do so by the Republican Party.

Obviously what happens next is in the future and therefore still to be decided. It goes without saying though that most people's hope is that the President and Congress will find a way to work together in the best interests of the nation. Sadly though the early indications are that Obama has not got the message from the voters and intends to press ahead with his political agenda regardless. If he does this and in particular tries to use an executive order to grant an amnesty to illegal immigrants then Congress will have little option other then to move to impeach him for breaching his obligation to uphold the US Constitution.

With tens of millions of votes cast in this election it is not really my place to say why everybody voted the way that they did. However from exit polls taken on the night it seems that the three biggest issues in ascending order were; Immigration reform (15%), Foreign Policy (20%) and the Economy (30%). The fact that the Republicans swept to victory of course indicates that those who voted on the immigration issue voted to reject Obama's proposals.

Although it can be tempting to underestimate the intelligence of American voters and the Democrats have clearly done so I think it is fair to say that the foreign policy issue was dominated by the Islamic State of Iraq and the Levant (ISIL). After all Obama's key claim of foreign policy success - withdrawing US troops from Iraq in 2012 - has clearly been key factor in the rise of ISIL. Also support for ISIL has been central to US foreign policy since at least 2012 even dominating the US' relationships with the European Union (EU) and the Russia with the Ukraine crisis seemingly engineered by the US to provide an excuse to punish Russia for its long standing opposition to ISIL.

The economy issue is slightly more interesting because the US' slavish support for ISIL stems from a Saudi threat to wreck the US economy by forcing up the price of oil if the US doesn't support ISIL. This is of course an empty threat because Saudi oil costs around USD10/barrel to produce while Russian oil costs around USD60/barrel to produce. Therefore if Saudi Arabia were to cut oil output to the extent that it rises from its current level of USD80/barrel to the 2011/12 high of USD110/barrel it would only harm Saudi Arabia who would sell less oil while helping Russia who would sell more oil at a better price. As such the only way that Saudi Arabia can use oil as a weapon at the moment is to flood the market with lots of cheap oil which is something I think the US economy could probably cope with. Plus if Saudi Arabia were to push the oil price above the 2011/12 peak a lot of nations would start questioning the wisdom of keeping Iranian oil off the market in order to help Saudi Arabia achieve global dominance.

Obama though has clearly been taken in by the Saudis threat so handed control of US foreign policy to them. This meant that with his domestic policies such as immigration reform, gun control and Obamacare being highly controversial the only thing that Obama and the Democrats could campaign on was the economy meaning that they chose to make it the key issue. The problem is that while Obama has succeeded in not screwing up the global economic recovery which has followed the global economic meltdown of 2008 this small amount of economic growth has not yet been felt by the majority of American voters who are still living with the austerity of the great recession.

Therefore I think the big lesson from this election has been; "If you're going to build your campaign around the economy first make sure that voters are happy with the economy."

16:50 on 6/11/14 (UK date).