Historic Win for Obama

Barack Obama claimed the White House on Tuesday night, saying his election as the first African-American president of the US sent a message that “change has come” to a troubled nation.

“If there is anyone out there who still doubts that America is a place where all things are possible, who still wonders if the dream of our founders is alive in our time, who still questions the power of our democracy, tonight is your answer,” Obama, 47, told more than 125,000 cheering supporters in Chicago.

A wave of discontent with Republican rule and the nation’s direction powered the Illinois senator to a sweeping electoral victory over Republican rival John McCain. Obama won at least 349 electoral votes, far more than the 270 needed for a majority and the most for a winner since former President Bill Clinton got 379 electoral votes in 1996.

The results should encourage “those who’ve been told for so long by so many to be cynical and fearful and doubtful about what we can achieve to put their hands on the arc of history and bend it once more toward the hope of a better day,” Obama said.

Americans spilled out on the streets in cities across the country to celebrate. Almost four hours after television networks called the race for Obama, people were still cheering and honking non-stop in Washington as thousands gathered by the White House, shouting Obama’s name and his campaign slogan of “Yes, we can.”

Before speaking to supporters in Chicago’s Grant Park, Obama took congratulatory phone calls from McCain and President George W Bush, who will leave office upon Obama’s inauguration, set for January 20. Arizona senator McCain, 72, conceding the race in Phoenix, told his supporters that Obama “has achieved a great thing for himself and his country.”

But Obama won’t have time to catch his breath. Having won the longest election in US history, the new administration will begin as economic indicators suggest the US may be headed for the deepest recession in a quarter century and the most complicated financial crisis since the Great Depression. Wages are stagnant, credit is squeezed and costs are escalating.

“The crisis crystallised in so many ways what was really at stake,” said Anita Dunn, a senior Obama adviser. “We had been saying it’s a big election about big things.” For many people, the WallStreet crisis and the $700-billion bailout brought “into focus how big the challenges are.”

About three weeks ago, as the crises deepened and financial markets reeled, Obama increased the proposed cost of his “middle-class rescue plan” to $175 billion from $115 billion. Advisers said pushing through that stimulus, which would direct funds to financially strapped states, rebuild infrastructure and give a $1,000 tax rebate to eligible families, will be Obama’s top priority in January if Congress doesn’t pass a comparable plan this month.

But Obama may not wait until Inauguration Day to get started. He’ll get his chance when Congress returns in less than two weeks for a lame-duck session with plans to pass another economic stimulus bill. Such a package would only be a down payment on Obama’s economic recovery programme if the Republican incumbent, George W Bush, supports it. The rest will come when Obama, 47, is in the White House.

The Democratic president-elect has much more on his agenda, amounting to what may be the broadest overhaul of the US economy since Franklin D Roosevelt’s New Deal. Beyond job creation and big investments in public works, Obama intends to shift the tax burden back toward the wealthy, roll back a quarter-century of deregulation, extend health-care coverage to all Americans and reassess the US government’s pursuit of free- trade deals.

Meanwhile, European stocks retreated for the first time in seven days and US index futures dropped after disappointing earnings overshadowed speculation that Obama will boost the economy with a stimulus package.

Time Warner Inc declined 2.2% in Germany as the world’s largest media company lowered its full-year profit forecast. ArcelorMittal, the biggest steelmaker, slumped 15% after saying it will slash production as prices tumbled. The dollar gained against the euro and Treasuries fell on expectations Obama’s victory and Democrat gains in Congress will speed passage of spending plans.

Europe’s Dow Jones Stoxx 600 Index lost 1.5% to 230.07 as of 11.55 am in London. Futures on the S&P 500 decreased 0.7% before a report that may show service industries in the US shrank in October.

“There is still deterioration in the profits outlook,” said Bernd Meyer, head of pan-European equity strategy at Deutsche Bank AG in London. “Earnings estimates from analysts are too high. The fourth quarter will be substantially weaker.”

—Bloomberg...