By John Barron
Would America be any better off with Hillary as president?
Five years ago this week I was driving with my wife to the State Fairgrounds in Des Moines, Iowa, to see the leading Democratic presidential candidate, Senator Hillary Clinton, perform one of the campaigning rituals of the election cycle.
Senator Clinton was due to speak at the Des Moines Register soapbox surrounded by bales of hay, and pink, perspiring Iowans.
The air conditioning in our rental Hyundai was struggling to keep up with the 40 degree heat and the traffic was crawling towards the fairgrounds along East Grand Avenue.
The local talk radio station WHO-1060 was on and the callers were talking about a recent spike in home foreclosures.
Many of them admitted they should never have had a mortgage, that they’d been encouraged to over-reach, even to over-estimate their income – one said they’d been to a website which produced pay-slips on demand for any amount and the bank had cheerfully accepted it.
As we inched towards the fairground’s parking lot I heard the term "sub-prime mortgage" for the first time.
Turns out, in the previous two years, the number of mortgages being written by American banks rated as sub-prime, and therefore much more risky, had tripled to about 20 per cent of the market.
They’d been packaged up in bundles of debts that were sold by banks to investors as a commodity, in the process obscuring the fact that these were always very dicey loans.
But that summer the American housing bubble burst and the high-stakes game of musical chairs came to a sudden end. Inevitably, many people were left standing, owing tens, even hundreds of thousands more than their home was worth and unable to meet their repayments.
But as we all know five years later, the American mortgage market was just the first domino to fall in a global banking and financial crisis that then triggered a recession in most developed nations.
To be fair to the ultimate winner of that election, Barack Obama’s move in to the Oval Office in January 2009 was like a pilot moving into the cockpit of a plane with four stalled engines that had plummeted 30,000 feet.
Remarkably, thanks to emergency measures taken first by outgoing President George W. Bush, the Federal Reserve, and the new president, by June 2009 that tailspin had been halted and the US economy was out of recession and growing again.
But the recovery has been tepid and very short on job creation.
Unemployment peaked at 10 per cent in October 2009, and fell to as low as 8.1 per cent in April 2012, but has since plateaued and, potentially disastrously for the President’s reelection hopes, ticked up to 8.2 per cent in May and 8.3 per cent in July.
Another key measure, GDP, shows the US economy grew at just 1.5 per cent in the second quarter of 2012 — a second recession is as close now as at any time in the past three years.
Three months from now, Americans will cast their vote for president. In doing so they will also deliver a verdict on who is to blame for the feeble US economy.
Is President Obama guilty of focusing on divisive reforms to healthcare when he should have been focusing on creating jobs?
Is Mitt Romney emblematic of the Wall Street bankers who created the crisis and have since lined their own pockets with bonuses without hiring many workers?
And might things have been different if someone other than Barack Obama been elected president?
Which brings me back to that day in Des Moines in August 2007.
Hillary Clinton arrived at the State Fairgrounds looking cheerful and fresh in a yellow linen blouse and white slacks, smiling and waving at the crowd as she made her way past the stalls selling any number of fried foods on a stick.
On the soapbox she argued quite convincingly that she was the candidate with the experience to lead the United States in a time of war and economic uncertainty.
But being a former first lady, the crowd was never allowed to get too close to her and neither were we reporters — the Secret Service and her suspicion of the media made sure of that.
Whereas her rivals like Senator Obama strolled the fairgrounds, eating corndogs and playing sideshow games for the cameras with his wife and daughters, Senator Clinton had an unwelcoming phalanx of burly chaps with sunglasses and walkie-talkies.
A rope literally held reporters back — dragging us along in front of the candidate in a way that was designed to create the best pictures but also prevented questions and rather diminished our dignity.
It all stopped the voters and the media getting near, and while it seems a small thing, it was not atypical and maybe that made a difference when Iowans came to vote five months later.
Barack Obama’s campaign manager David Plouffe is on record saying if Obama hadn’t won the Iowa caucuses in January 2008, Hillary Clinton would have been the Democrats nominee and, very likely, the president of the United States.
Why does all of that matter now? Would a President Hillary Clinton have had any more success as a jobs creator than President Obama?
I suspect she might, for the simple reason that given the third degree political burns suffered by Hillary and Bill Clinton with their failed healthcare reforms in 1994, chances are she would not have picked the same fight first-up when elected to the White House again.
But would the Clintons really have worked any better on a range of other issues with the most divided and partisan Congress in history?
I very much doubt that.
With Hillary Clinton already saying she wont serve a second term as secretary of state, we may well start to see her true colors again after this election.
And whatever happens this November, Hillary Clinton will again be the frontrunner for the Democratic presidential nomination in 2016, unless she completely rules herself out — which she has, but nobody believes her — or another star like Obama swoops in and takes the prize.
7 August 2012