NEWS,11.11.2012

What did they learn?

The 2012 presidential election shattered spending records, further polarised a divided country and launched a thousand hashtags. The race appeared to be a nail-biter going into Tuesday night but in the end, it came down to the state that most had been saying for weeks that it would Ohio.

Here are five things we learned from Tuesday:

1. The GOP has a Latino problem

"If we don't do better with Hispanics, we'll be out of the White House forever," says Republican strategist and CNN contributor Ana Navarro, who was the national Hispanic co-chair of Senator John McCain's 2008 presidential campaign.

"The big issue Republicans are going to have to wrestle with is the Hispanic issue," adds Republican strategist and CNN contributor Ari Fleischer, who served as former president George W Bush's first press secretary. "Republicans are going to have to find a different way forward."

The national exit polls tell the story. Latinos are the fastest growing-segment of the population. Their share of the vote expanded from 9% in 2008 to 10% in this election. The president won 67% of the vote four years ago. He increased that to 71% this year.

Latinos were crucial in helping Obama win the battleground states of Colorado and Nevada, and in putting the president in the lead for Florida's 29 electoral votes. And they were just as important in turning the former swing state of New Mexico into what appears to be an increasingly safe state for the Democrats.

If the current trend continues, Arizona and Texas could turn from red to purple.

The 2012 election is a loud wake-up call for the GOP to change its stance on illegal immigration.

And that's being acknowledged by arguably the best known Latino Republican senator.

"The conservative movement should have particular appeal to people in minority and immigrant communities who are trying to make it, and Republicans need to work harder than ever to communicate our beliefs to them," said Senator Marco Rubio of Florida in a statement on Tuesday night.

2. The youth vote came up big and the white vote got smaller

A big question heading into Election Day was whether younger voters would show up at the polls.

More of them did than last time.

According to national exit polls, 18-29 year olds increased from 17% to 18% of the electorate from 2004 to 2008. They made up 19% of the electorate this time around. That jump in size from four years ago made up for the president's drop in capturing the youth vote, from 66% in 2008 to 60% in 2012.

It wasn't just age, but also race, that worked in the president's favor.

Obama's share of the white vote dropped from 43% four years ago to 39% this year. But that was negated by the shrinking of the white vote from 74% of the electorate four years ago to 72% now. And the African-American percentage of the electorate stayed steady at 13%. Some GOP strategists said that the white vote needed to be 74% for Romney to win.

"The youth vote and the black vote turned out once again and that's to the president's credit," Fleischer said.

3. The auto bailouts helped drive Obama to victory in Ohio

For months, the Obama campaign touted the taxpayer bailouts of General Motors and Chrysler, and they were given prominent prime-time placement during the Democratic National Convention in early September.

It's a strategy that the Obama campaign thought could be the difference in Ohio, a major base for the auto industry that eventually decided the election.

"The American auto industry is back on top," Obama said campaigning last week in the Buckeye State.

The bailouts were started under President George W Bush in 2008 but Obama grabbed the keys to the programme the next year, managing and funding the assistance.

Romney opposed the bailout and pushed for a privately financed and managed bankruptcy of the two automakers. The Obama campaign and other Democrats have attacked Romney over his opposition to the federal intervention, which aided the companies through their eventual bankruptcies.

And in the final weeks leading up the the election, the Obama campaign highlighted pushback by General Motors and Chrysler to a Romney TV ad and a radio spot this past week that claimed both domestic auto makers were sending US jobs to China.

It seemed to work. Nearly six in 10 Ohio voters said they approved of the federal government's role in helping the troubled domestic automakers, and according to exit polls, the president won three quarters of those voters.

4. Romney wasn't able to expand the map

Much was made of campaign visits by Romney and his running mate, Representative Paul Ryan, to Pennsylvania in the final weekend before the election, and Romney's return to the Keystone State on election day.

The Romney campaign and allied super PACs supporting the GOP nominee flooded Pennsylvania airwaves in the final weeks with a flurry of TV ads.

To a lesser degree, there was a similar push in Minnesota, another solidly Democratic state where public opinion polls tightened last month.

There was talk by Romney campaign officials of being on offense and of expanding the electoral map.

It didn't pan out.

While Romney performed stronger than 2008 Republican nominee John McCain in Pennsylvania and Minnesota, it wasn't enough. And of the swing states that swung blue four years ago, it appears Romney was only able to turn Indiana and North Carolina red again.

Romney's 'all' proved not enough

5. What will $6bn get you?

We had a Democratic president, a Republican House of Representatives, and Democratic Senate going into the 2012 election. And we'll have a Democrat in the White House, with a Republican House and a Democratic Senate after the election.

When all the bills are in, total spending for the 2012 election (all federal and state races) could top a record-breaking $6bn. And what did all that money buy?

Some would argue ... nothing.

 

Greece votes on budget to unlock aid

Parliament in Athens are preparing to vote on an annual budget that will cut spending and raise taxes yet again but which the government insisted will kill off talk of Greece being forced out of Europe's currency union.An anti-austerity demonstration called by major trade unions mustered thousands of protesters outside during the debate but a spokesman for conservative prime minister Antonis Samaras's coalition reflected confidence the government majority would see the 2013 budget bill pass, probably around midnight."With today's vote, we put an end to the Grexit talk," Simos Kediglou told a Greek television channel, using the term coined for the possibility Greece might force to exit the euro zone.The measure, following a separate package of belt-tightening approved last week, should ensure Athens receives further credit from international lenders and so avoid imminent insolvency.However, many of the 10 million Greeks, driven to despair by five years of debt-laden economic slump, fear attempts to cut the public deficit will only deepen the crisis and many poorer citizens say living standards in a country where unemployment is running at 25% are becoming hard to bear."All those measures throw us back 50 years," said Thymios Marvitsas, 75, during a communist protest march to parliament during the budget debate. "Our pensions and wages are cut. My life is getting harder and harder."Police estimated the crowd outside parliament at 13,000.Arguments about the wisdom of cutting spending have also divided the political establishment and today's vote poses a test of confidence in Samaras's three-party coalition.It managed to pass Wednesday's austerity and reform package by only a narrow majority after the smallest of the partners, Democratic Left, abstained. However, its leaders have said the party will vote for the 2013 budget and, with Samaras having nominal support from 168 of the 300 members, it should pass.Hours later, euro zone finance ministers meet in Brussels for talks likely to be dominated by the Greek crisis though a final decision on extended more credit is not expected.Securing both pieces of budget-cutting legislation has been a condition of renewing bailout funding and unlocking more than 30 billion euros in financing from the International Monetary Fund and European Union later this month.The government, formed after a tumultuous election in June, has ignored sliding poll numbers and occasionally violent street protests in pursuit of favour with its creditors."Today we must demand sacrifices so there is hope for future generations," Finance Minister Yannis Stounaras told parliament on Saturday. "Re-establishing our credibility is our only passport to recovery."For the opposition, Panagiotis Lafazanis of the leftist SYRIZA party, responded: "For three years you have been going from bailout to bailout, rescue to rescue."You've already bankrupted the Greek people."According to the budget draft, the Mediterranean state's economy will shrink for its sixth year running, by 4.5%.The budget deficit will be 5.2% of gross domestic product (GDP), down from 6.6% expected this year. But once the cost of paying interest on its huge debt is removed, Greece will show a tiny surplus for the first time in decades.These deficit figures assume Athens's lenders will extend a deadline for it to narrow its fiscal shortfall by two years in exchange for the new belt-tightening package.The biggest cost-reductions next year are pension cuts of up to 15% for almost half the total 9.4 billion euros in budget savings and public wages cuts of 1.2 billion.Greece's fiscal adjustment has hit workers more than the wealthy elite. This has become a sore point in a nation where media have published lists of bankers, lawyers and shipping magnates who they say have moved cash to Switzerland."It's always the same. The poor pay and no one touches the rich and the tax evaders. Winter is coming and I can't afford heat," said 41-year-old housewife Angeliki Petropoulou.

Brics eye $240bn forex reserves pool

Leading emerging market countries are discussing pooling up to $240bn in foreign exchange reserves to protect themselves from short-term liquidity pressures, according to documents outlining plans by the five Brics nations.Brics countries China, Russia, India, Brazil and South Africa announced a working group in June to look into jointly pooling reserves and creating a new development bank to fund infrastructure projects in the developing world.According to the documents, the pool of central bank money would be available to Brics facing balance of payments difficulties. Some, however, are also pushing for a precautionary credit line, similar to the IMF's that provides countries with insurance against outside economic shocks.The move is part of growing frustration among the Brics and other developing countries with the continued dominance by the United States and European countries of global institutions like the International Monetary Fund and World Bank.Brics officials meeting on the sidelines of a recent G20 summit of finance ministers from developed and developing nations sought to advance their plans ahead of a Brics leaders' summit in South Africa in March.Planned currency swap arrangements would also give Brics the ability to lend to each other to keep markets liquid. fficials at the G20 Brics meeting, who spoke on condition of anonymity, said China had emphasised that the size of the reserve pool needed to be sufficiently big to be taken seriously by markets.Officials believe that the Brics reserve pool should be similar in size to the Chiang Mai Initiative of southeast Asian countries, which was doubled to $240bn in May to boost their protection against external shocks. The Chiang Mai program, first agreed in 2000, has never been put to use because it would require the country to request a program from the IMF, which was blamed for insufficient bailouts during the Asian currency crisis of 1998.Eswar Prasad, a Cornell University economics professor and senior fellow at the Brookings Institution in Washington, said the proposed plan for pooling resources posed a "strong and serious challenge to existing global monetary arrangements.""Irrespective of the logic and possible complications of these schemes to pool their funds, these proposals from the Brics may have the salutary effect of prodding global monetary reforms along at a faster pace," Prasad said.Countries like China are keen to see its currency, the yuan, added to the IMF basket of currencies, currently including the pound, yen, euro and dollar, that make up the IMF unit of account, the Special Drawing Right.   While a number of the Brics believe disbursements from the reserve pool should be made in US dollars, others preferred to use the SDR. "In terms of disbursement, the preference would be to use the US dollar or other reserve currencies, but the view was also expressed that part of the disbursements could be made available in Brics national currencies," according to the documents.Discussions are also looking at what conditions should be attached to the reserve pool. One question is whether the scheme should be linked to an IMF program, which could be a bitter pill to swallow for any of the Brics. Some Brics are arguing for a partial link to the IMF, with an initial quick disbursement subject to rules of the pooling. The Brics are also considering creating a new development bank to support financing of long-term infrastructure projects for emerging and developing economies, to meet the pressing need for roads, railways, ports and electricity.The Brics bank would be in competition with the World Bank and other multilateral development banks, which also provide loans for infrastructure projects. However, countries like India are already facing limits on its borrowing from the World Bank.The Brics documents noted that existing multilateral development banks are under-capitalised compared to the growing needs of emerging economies and developing countries.The new bank would initially issue non-concessionary project-linked finance to members, meaning that the financing would be at a higher cost. A small window of low-cost loans could be considered as the bank expanded, the documents said.The World Bank and other institutions have long insisted that lending to poor countries should involve low-interest loans to avoid pushing up their debts to unsustainable levels.