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Some Thoughts On The Obama Era

The American people have spoken, and they’ve chosen change. I’ve always had faith in the American people, so I’m looking forward to the new Obama administration with hope rather than despair, anticipating unity rather than division, and good change vs. the status quo.

Historically, new presidents tend to move to the center of the political spectrum once the realities of governing and re-election become obvious. This election may be a little different, though, as Obama not only enjoyed a significant victory but will enjoy significant majorities in both houses of Congress.

This was an interesting election. Usually when one side enjoys such a significant victory, it’s accompanied by a well-defined mandate. That wasn’t the case here, as this election was more a referendum on George W. Bush and the change was never thoroughly defined. Thus, we all awoke on Wednesday morning without a clear understanding of what that change will be or any certainty of what an Obama presidency and a reinforced majority in Congress will actually do.

While voters may not have been voting for a specific agenda, it’s clear that Pelosi, Reid and Obama represent the most radical ideological leadership of modern American politics, something more familiar on the European scene.

If it’s true that people most often vote their own self interests, then these should be great times for grain production. The Corn Belt – Iowa, Indiana, Ohio, Illinois, Wisconsin and Minnesota – strongly preferred Obama. While much may change in agriculture, ethanol subsidies aren’t expected to be among them.

Meanwhile, cow-calf producers and cattle feeders can expect some difficult times (the largest cow-calf and cattle-feeding states overwhelmingly supported McCain). And from a regulatory standpoint, the environment, climate change and animal welfare are expected to receive significant boosts. After all, Obama is the first president ever endorsed by the Humane Society of the U.S.

The opening of markets globally is also expected to come to a screeching halt, as labor and environmental equalization are factored into any new agreements. Even the status of NAFTA and our trading partners in Canada and Mexico is expected to change. The question is really the degree of protectionism that we’ll see – full-blown or moderate?

Ag wasn’t on the radar screen of either candidate throughout the campaign. But in a TIME magazine interview, Obama seemed to indicate that he supports a radical makeover in modern agricultural production techniques. According to his comments citing a California-Berkeley professor, he prefers a more “environmentally friendly” approach and is uncomfortable with large modern agriculture practices.

Still, if I were forced to wager, I’d bet that ag remains on the back burner. In terms of both Obama and the Democrats’ broader agenda, it’s a long way down the list of priorities. In the short term, the overall economy, budget constraints and the war on terrorism will remain the big priorities.

Health care, climate change and energy policy are also expected to factor large in Obama's initial efforts. That said, however, the focus initially is likely to be on macroeconomic decisions and policies. Consumer confidence and the economy aren’t expected to turn around overnight, but the constant rhetoric from the candidates and the media telling us how bad things are will likely subside and allow things to stabilize. Tax policy will focus even more on wealth redistribution, and things like the Death Tax are expected to return in full force in 2010 as the Bush Tax cuts sunset.

The regulatory environment relative to Wall Street is expected to become much more restrictive, and incentives to invest in new business ventures is expected to be replaced by reducing competition and giving support to weak but established ventures. Winning and losing will be more dependent on government policies than the marketplace, and livestock producers may be forced to reevaluate their historical preference of keeping government out of their business. Our ability to compete is expected to be increasingly linked to our ability to secure government support for pro-beef or pro-livestock policies to offset advantages that other industries win.

The global recession will likely continue to keep energy prices somewhat under check, barring supply disruptions. New drilling in oil-rich locations domestically should remain nominal, while both coal and nuclear energy are two options Obama feels don’t fit into America's future. Wind, solar, biofuels, and conservation are expected to be the emphasis.

Immigration is another issue that agriculture is watching closely; this election would certainly seem to increase the likelihood of an amnesty-style program. Still, this is a politically contentious issue that may be left on the backburner as well. With soaring budget deficits, the fact that the U.S. spends more on illegal immigrants then it spends fighting the war on terrorism will necessitate something be done. At this time, there doesn't appear to be a clear consensus on the Democratic side regarding immigration policy.

This brings up another key factor when looking ahead. Because of their significant defeat at the polls, Republicans will have virtually no impact on the national agenda. For at least the next two years, the Republicans have been reduced to nothing more than loyal opposition. Their ability to affect policy will be determined by their ability to deal effectively with the Democratic leadership.

This is the biggest change in the political environment in a lifetime, and change is in the air. The influence of rural America will continue to erode. And while words like conservatism and liberalism have been so overused that they’ve lost some of their meaning, it’s probably accurate to say the country made the decision to take a major step to the left as confidence in American ideals evaporated in favor of the European model of government in the aftermath of the financial markets meltdown.

It may be that this shift to the left is being over emphasized and that the nomination of the most liberal Republican and Democratic candidates in history were more a symptom of George Bush's unpopularity than a paradigm shift among American voters. Time will tell, but the most concise interpretation of what this election means from an agricultural view is more grain and less meat production.
Troy Marshall