“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.”
― Alexis de Tocqueville
In a nutshell, the above quote from Tocqueville explains the outcome of yesterday’s election. According to exit polls, voters said the number one issue in this election was the economy. Yet, with a 7.9% unemployment rate, President Obama was reelected—the first president since FDR to win reelection in such a rotten labor market. But when the takers outnumber the makers, unemployment apparently doesn’t seem so important.
President Obama won reelection, not by winning over independents, but by turning out his base. Last night’s vote proved that Obama’s 2008 victories in the traditionally Republican states of Virginia and Colorado were no fluke. America has changed. It is no longer a center-right country, but a left-leaning country. Democratic voters outnumber Republican voters by an almost insurmountable margin. Mitt Romney actually won the independent vote by five percentage points yesterday, but he still lost the election. In order to overcome the six point advantage in Democratic turnout, Romney would have had to win independents by a landslide of more than 20 percentage points. That is no easy feat.
The sad reality is that a majority of the electorate no longer favors the message of economic freedom and limited government. Yesterday, a majority of Americans chose to take this country past the point of no return on the road toward European style social democracy. Obamacare will be fully implemented. Taxes are likely to go up. Entitlement programs are likely to expand, and regulation is likely to become more onerous. And that’s just a start. Things are likely to get progressively worse over coming decades. The minority vote, which goes 80% for the party of big government, is the fastest growing segment of the population. Republicans can’t continue to lose 80% of the fastest growing segment of the population and remain a relevant national party. As a result, the party that professes to favor limited government will start to look more and more like the party of big government. R.I.P. economic freedom, liberty, and self-reliance.
Jeremy Jones, CFA
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