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Sifting Through the Economic Messages From the Elections Last Night

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As the Huffington Post has been reporting all morning, ABC sums up the New Jersey and Virginia exit polls this way:

Vast economic discontent marked the mood of Tuesday's off-year voters, portending potential trouble for incumbents generally and Democrats in particular in 2010. Still the gubernatorial elections in Virginia and New Jersey looked less like a referendum on Barack Obama than a reflection of their own candidates and issues.

The gubernatorial elections in Virginia and New Jersey looked less like a referendum on Barack Obama than a reflection of their own candidates and issues. Still, the two Republican victories, in predominantly Democratic New Jersey and in purple Virginia, had to smart.

Just under half the voters in Virginia, 48 percent, approved of the way Obama is handling his job, rising to 57 percent in New Jersey. Most in both states, in any case, said the president was not a factor in their vote.

Perhaps most striking were economic views: A vast 89 percent in New Jersey and 85 percent in Virginia said they were worried about the direction of the nation's economy in the next year; 56 percent and 53 percent, respectively, said they were "very" worried about it.

Voters who expressed the highest levels of economic discontent heavily favored the Republican candidates in both states - underscoring the challenge Obama and his party may face in 2010 if economic attitudes don't improve. The analogy is to 1994, when nearly six in 10 voters said the economy was in bad shape, and they favored the out-of-power Republicans by 26 points, helping the GOP to a 52-seat gain and control of Congress for the first time in 42 years.

In Virginia on Tuesday, voters who were "very" worried about the economy concern supported the Republican winner, Bob McDonnell by a wide margin, 77-23 percent. In New Jersey, while the gap wasn't quite so broad, voters who were most worried about the economy backed the Republican Chris Christie by 61-34 percent as he unseated incumbent Democrat Jon Corzine.

Listening to the Republican pundits last night what you heard was that the electorate, just a year after giving Democrats the most control of Washington they have had in over 40 years, have now turned around and embraced the low-tax, small government, fiscal austerity economic strategy of the GOP. The problem with this argument is that last night, voters in Maine and Washington also overwhelmingly rejected statewide "TABOR" initiatives to cap tax increases. In fact, in both these states, bond initiatives passed, creating more investment in transportation and schools.

As I wrote last night, the central battleground of American politics today is the economy and the increasingly difficult struggle of everyday people. The American public has resoundingly rejected the laissez-faire Republican approach of this decade, which left the typical family with shrinking incomes and spiraling debt, the nation in the worst recession in 70 years, and Wall Street in shambles. They elected Democrats because they offered to make all this better, and refocus the debate not along the old conservative-crafted economic memes - taxes, size of government - but around offering a strategy relentlessly focused on helping them in their almost decade-long struggle to get their incomes up and families in better shape.

What Americans have seen from the Democrats this year is less than what they had hoped - too much proximity to wealthy interests, worsening economic conditions, too much attention to issues separate from their struggles, and a lack of party coherence that is preventing Democrats from making Washington work again for them and not for the special interests. It is the fundamental failure to make the economy the central issue of this Presidency that has left the door open for the Republicans. It is also a door that it easily closed next year by the President and his team.

As I laid out in a front-page Huffington Post essay in early September, "The Key to the Fall: Staying Focused on the Economy," the most urgent problem facing the country today is fashioning a successful strategy to transition America into the new economy of the 21st century. Despite the fiscal pressures of the moment, this will not be done by returning to a politics of austerity, but rather acknowledging, forthrightly, that we must do more, invest smarter, raise our game in this much more competitive economy of the 21st century or risk national decline, reduced life prospects for our people, and lowered standards of living.

This is not a politics of "recovery," a word that I think has become more magical thinking in Washington than a reflection of an economic strategy - as if everything will just return back to the way it was, in the good ole days. That isn't going to happen. There is too much change, too much structural transformation that must happen. We have to leave the successful 20th century American economy behind, and embrace the new economy of the 21st - one that is more globally competitive, technology-dense, universally wired, more idea- and intellectual property-driven and hopefully all constructed on top of a new low-carbon national footprint.

In poll after poll it is clear that the American people know that we have to make this national leap into a new economy, that the old economy simply isn't working for them anymore. Do our leaders understand this as well as the American people do, and in particular, do the Democrats, those who are running our government?

To make this successful transition over the next 20-30 years, we will need a strategy, and will need to fight to make progress toward this strategy each year. Of all the lessons learned from this rather muddied election, I hope that is the one the leaders of both parties take away, leaving behind the now-outdated economic arguments of the 20th century, shifting the debate to a much more germane and important conversation about our new strategy for the 21st.

This essay was cross-posted at the NDN Blog.