2012 in the Crystal Ball

I spent some time yesterday with a friend who is close to one of the leading candidates for the Republican Presidential nomination in 2012. He thinks his man has an excellent chance to get the nomination, and a better opportunity to win the election than is generally assumed.

Why is that? 2012 could be a lot like 1992. Recall that in 1990, the ostensible Democratic “heavyweights” didn’t want to take on George Bush in 1992. Bush had won in a landslide in 1988, and it seemed that we were living in an era in which voters decisively preferred Republican Presidents and a Democratic or mixed Congress. Thus, Democrats like Mario Cuomo took a pass on the 1992 campaign, assuming that Bush was a shoo-in for re-election.

We know now that Bill Clinton was the top political talent of his generation. But the Democratic contenders that year were known as the “seven dwarves,” and it may well be that if some of the party’s senior statesmen had gotten into the race we never would have become acquainted with the Clintons. What made Clinton President was that the economy went South.

So what’s the parallel between 1992 and 2012? Barack Obama, like George Bush, looks like a good bet for re-election. Obama, a remarkably lucky man, is taking office under ideal conditions. He is a “historic” President whether he does anything positive or not, and the conventional wisdom is that regardless of what he does, the economy will get better, and he will reap the credit. Thus Obama will enter the 2012 campaign season more or less unbeatable.

That logic will keep some Republicans out of the 2012 race. Bobby Jindal, for example, has all the time in the world and no need to gamble his future by taking on a popular incumbent. But, my friend argues, a worm lurks in the bud.

An enormous amount of money is being pumped into the economy by the Fed to stave off a more severe recession and keep the financial system stable. That may well be a good idea, but unless the laws of economics have been repealed, the result will be a severe inflation. Inflation will strike some time between 2009 and 2011, and Barack Obama will be blamed for it, since it did not pre-exist his administration.

The U.S. hasn’t had a severe inflation since the late 1970s and early 1980s, and those who didn’t live through that era may not realize how politically disruptive inflation can be. In fact, taming the inflation of the Carter era may have been Ronald Reagan’s greatest achievement, and it certainly was a key to his popularity.

If my friend is right, the inflation that strikes a year or two into Obama’s term will make him vulnerable. Combine that with an unpopular Supreme Court appointment or two and, perhaps, a perception of weakness abroad, and by 2012 Obama could look a lot like Jimmy Carter.

A pipe dream? Very possibly. But if my friend is right, the Republican Presidential nomination in 2012 will be very much worth having, and his candidate may be the person best poised to claim it.

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