On election night, this is what I wrote about Obama’s pending victory:

THE STATE OF DISUNION

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STATE OF DISUNION

Our new president will soon address a joint session of congress to address “the State of the Union”. In reality, whatever Mr. Obama actually says, his speech will be about the state of his own presidency. The elder Cuomo has been credited with the pithy observation that “Campaigning is poetry, but governing is prose.” That now appears to be the understatement of the century. The Obama campaign was a fantasy projection, bordering on magical thinking, while his first year of governance was more like putting a large airline down in the Hudson River without a skilled pilot at the helm. The casualty count – in elected officials – may well equal the seating capacity of an airbus.

As I thought about the possible consequences of Mr. Obama’s election, I greatly underestimated his political inexperience in governance, his lack of policy moderation and the sheer scale of the economic disaster that was about to unfold. On election night 2008, this is what I wrote about the prospect of Obama’s pending victory (note the emphasis added for this piece – I’ll return to those points in a moment):

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TUESDAY

OBAMA’S TRAINING WHEELS

As I write this, the Obama express appears headed to the White House, leaving the behind Bush presidency - and any political figure tainted by association - as road kill.

Whatever happens with respect to the bailout of the US credit market over the next few days, it seems highly probable that the credit liquidity crisis will lead to a correction cascade that will depress growth and incomes, while increasing unemployment for at least three consecutive quarters. In other words, a recession seems far more likely than not.

If Senator Obama is elected, he will be one of the nation’s most eloquent presidents and one of the least experienced. But circumstances will have sharply curtailed his freedom of action.

Adding roughly a trillion dollars to debt, facing a recession that requires the stimulus of tax cuts and – if possible – more stimulus spending – will leave the new president almost no budget discretion. It will be nickel and dime liberalism because all the really big money will have already been taken off the table.

On the foreign policy-national security side you can be assured that our enemies will move quickly to exploit perceived weakness. Senator Obama has already pledged to reinforce our military presence in Afghanistan and he is constrained by military logistics and other practical considerations from simply dropping the effort to stabilize Iraq.

And Iran surely will seize the moment to press forward to attain deadly nuclear power status. A weak president Obama might not last out even one term if things get bad enough. He is not likely to let that happen. It is a safe bet that Code Pink will be disappointed in him.

TRAINING WHEELS ARE DESIGNED PREVENT THE NEW OPERATOR FROM FALLING TOO FAR OR TOO HARD. OUR NEXT PRESIDENT WILL BE HEMMED IN ON BOTH SIDES. AND DRIVING OFF A CLIFF WILL TAKE MORE THAN FOUR YEARS.

The fringe left and its media allies have succeeded all to well in destroying a sitting president, only to now lament his failure to lead when no one else was available. Speaker Pelosi has fully participated in the leadership vacuum. We only have one president at a time. We are now paying the price for unbridled partisanship and the politics of presidential destruction.

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We face the prospect of a debt-driven economic constriction, the sheer depth and length of which may be far worse than anyone thought in November 2008. The notion that this administration would add only “roughly a trillion dollars to debt” was laughably optimistic on my part. The notion that there would be tax cuts was equally silly of me to expect, and when I wrote, that we should expect if possible – more stimulus spending, I naively assumed that the new administration would actually spend money to rekindle American industry and production, not pay off existing political constituencies. I guess I forgot Mr. Obama’s Chicago connection. My prediction that he would end up with “almost no budget discretion” was premature because the fiscally conservative Blue Dogs and independents in congress were too weak to contain the first year fiscal hemorrhage.

I was correct that Mr. Obama as commander in Chief would disappoint the Code Pink crowd (to his credit), but I underestimated the extent to which his tendency to indecision and hesitation might leave us with a nuclear armed Iran.

So when I opined that “driving off a cliff will take more than four years”, I was only partly correct. The President and democratic leaders have already taken House democrats and a plurality of Senate democrats off a political cliff. The presidency itself can now only be saved by a sharp turn to the center, propelled by the elections later this year. Unless the truly dire growth in national indebtedness predicted by the non-partisan truth-tellers of the Congressional Budget Office is reversed ( http://www.cbo.gov/ ), and soon, the resulting fiscal collapse may well happen during Mr. Obama’s term of service to the nation.

The debt problem has been building, like an asymptomatic metastasis, for three decades. The acute symptoms were masked by a series of bubbles, most recently the dot-communist bubble, and the real escape bubble. The next bubble will be the illness itself, full blown and unmasked – this is the empty economy bubble.

That fall will be precipitous. At the bottom, we will be unable to borrow sufficient funds to support the essential functions of traditional government. We will not be able to service existing indebtedness without savaging the private sector, the true engine of prosperity. The economy will be moribund. The ‘I told you so’ refrains will not matter.

The numbers don’t lie. The CBM’s projections of federal spending place us in the banana republic category in a few years. The edge of the cliff is very close, possibly within this president’s current term. Once you start falling, the energy required to reverse course rises exponentially with each second.

THE SPEECH

This president is fond of nuance and subtlety, particularly when “adjusting” his old positions or adapting to failures. You will hear hints of a change of course, much like the captain of the Valdez might have attempted. We are well beyond speeches. Watch the policies. Watch the numbers.

Stay tuned.

JBG