A few notes on the election and what it 'means.' Much will be said about how Obama's win and Romney's loss reflects policy, politics, demographics, social issues, cultural issues, etc. In my opinion, most of the commentary on the presidential race is wrong.

1. The general consensus is that Obama ran a great campaign and Romney ran a terrible one. Really? Apparently, Obama is the first president in history to lose votes in his reelection bid. A few presidents (Carter, Bush 41, etc.) have been defeated. None (until yesterday) have been reelected with fewer votes.

2. The amazing thing is not that Romney lost, but that he did so well just four years after the Bush catastrophe. The Bush administration failed at home, abroad, and on the border. It would be crazy to think that this didn't damage the Republican brand. It did. It takes a long time (or large events) for a party to recover from something like Bush. A few examples. The Crash of 1893 put the Republicans in charge for a generation. The disaster of Woodrow Wilson's presidency gave the Republicans absolute dominance in the 1920s (including the most lopsided popular vote in history). The Great Depression elected Democrats for two generations. The failed Truman presidency (as seen by the public at the time), easily elected Eisenhower (but left the Democrats in control of Congress).

It would be amazing if the utter failure of the Bush presidency didn't resonate for some time. So far, the failures of the Obama administration simply don't loom as large. A quick comparison with FDR is incisive. After FDR took office in 1933, the economy took off. Industrial production doubled (from a low level) in 4 years. Unemployment plunged (how much is unclear because statistical methods were so different back then). FDR did better in 1936 than he had in 1932. By contrast, the Obama administration didn't reduce unemployment and created near zero net jobs. He did worse.

Eventually, people will forget about Bush and/or new events will shift public opinion. Republicans would have dominated politics until at least 1940 baring the Great Depression (from a public opinion standpoint, WWI was Iraq on super steroids). Of course, that didn't happen. 1929 intervened with decisive consequences.

3. Few people from either party will admit it (for obvious reasons), but Romney considerably broadened the appeal of the Republican party (not enough to be sure). Take a look at http://www.washingtonpost.com/wp-srv/special/politics/2012-exit-polls/?hpid=z3#United-States. Romney gained with

A. Men - 4 points better than McCain

B. Women - 1 point better than McCain

C. Young voters  (18-29) - 5 points better than McCain

D. Middle age voters (45-64) - 2 points better than McCain

E. Old voters (65+) - 3 points better than McCain

F. Republicans - 3 points better than McCain

G. Independents - 6 points better than McCain

H. Whites - 4 points better than McCain

I. Blacks - 2 points better than McCain

J. Other - 7 points better than McCain

K. High school graduates - 2 points better than McCain

L . Some college - 1 point better than McCain

M. College graduate - 3 points better than McCain

N. Postgraduate  - 2 points better than McCain

O. $50-99K - 3 points better than McCain

P. $100K+ - 5 points better than McCain

Q. Married men - 7 points better than McCain

R. Married women - 2 points better than McCain

S. Non-married men - 2 points better than McCain

T. Non-married women - 2 points better than McCain

U. Liberals - 1 point better than McCain

V. Moderates - 2 points better than McCain

W. Conservatives - 4 points better than McCain

X. Protestants - 3 points better than McCain

Y. Catholics - 3 points better than McCain

Z. Jewish voters - 9 points better than McCain

A1. None (religion) - 4 points better than McCain

B1. White evangelicals - 4  points better than McCain

Romney lost with

A. Age 30-44 voters - 1 point worse than McCain

B. Democrats - 3  points worse than McCain

C. Hispanics - 4 points worse than McCain

D. Asians - 9 points worse than McCain

E. Dropouts - 1 point worse than McCain

F. Under $50K - Less than one point worse than McCain

G. Some other religion - Less than one point worse than McCain

4. Considerable media commentary will be devoted to how poorly Romney did with Hispanics. The shift towards Obama cost Romney 0.4% of the popular vote. Not too many commentators will notice that Romney's gains with blacks added 0.26% to his vote total. Of course, Romney's gains with whites added 2.88% to his vote total. Conversely, Romney's losses with Asians cost him (apparently) 0.27% of the popular vote. Perhaps even stranger, Romney's gains with 'other' added 0.14% to his vote total.

5. For better or worse, immigration was not a material issue in this election. To the extent it was, who did it help? The conventional wisdom will no doubt conclude that Obama won by getting more Hispanic votes via his administrative partial Amnesty. Perhaps that's true. However, Hispanics had plenty of other reasons to vote for Obama. Immigrants account for a vastly disproportionate share of the uninsured (1/3rd). Obamacare could have been called Aliencare with easy justification. The states with the fewest immigrants have the fewest uninsured by far (and vice versa). Of course, the same points could be made about food stamps, WIC, Medicaid, etc.

Conversely, immigration almost certainly helped Romney with white voters (turned off by McCain's pursuit of Amnesty) and may have helped Romney with black voters (many of whom are privately hostile towards mass immigration). If Romney had polled as well as McCain among Hispanics he would have still lost the election decisively. Conversely, if he polled as well as Reagan among whites (1984) he would have easily won.

6. As stated above, Romney's showing with Hispanics will be the source of considerable attention. Obama got 7.1% of the national vote from Hispanics versus 2.7% for Romney for a net loss of 4.4%. By contrast, Obama got 12.09% of the national vote from blacks versus 0.78% for Obama for a net loss of 11.31%. Obviously Republicans have a vastly larger problem with black voters than Hispanic voters. Obama got 29.15% of the national vote from women versus 23.32% for Romney for a net loss of 5.83%. Another way of looking at this is that Romney carried the male vote (of all races) by 7% and lost the (larger) female vote by 9%. This suggests that then conventional obsession with race based voting isn't justified. What the Republicans can do about this is another matter.

Few people will mention this but Romney won the married vote (both sexes) by big margins and lost the single vote by large margins as well. Romney lost the single female vote by 36% (but still did better than McCain). The conventional wisdom is that this is all about abortion. However, the single female demographic includes welfare mothers as well. Apparently, 2% of black single mothers support(ed) Romney. More broadly, 40% of all children are born out-of-wedlock (and into welfare dependency to a greater or lesser extent).

7. Romney lost a long list of states in the Midwest and elsewhere where immigrants and Hispanics aren't a large share of the electorate. Notably, he lost Michigan, Wisconsin, Iowa, Minnesota, etc. In some of these states he lost the white vote. This strongly suggests that race-based interpretations of the election are misleading. I don't agree that the auto-bailout cost Romney the election. However, I would argue that the poor results of Bushinomics did.

As always, the conventional wisdom is that the losing party has to change to win in the future. Sometimes that true. The DLC and Clinton pushed the Democrats to the right in the 1990s (in most respects) with favorable results. However, sometimes it isn't true at all. Obama's victory in 2008 wasn't about shifts in policy, but the collapse of the party in power.

If the next four years are relatively smooth (continued slow recovery, massive deficits, no major events abroad), the Democrats will probably win in 2016 no matter what the Republicans do. Conversely, a new global economic crisis (most likely triggered in the Eurozone) and/or a major war in the Middle East (and $10 gas) will destroy the Democrats (for at least one election cycle). Strangely, the Democrats might implode simply by doing what everyone says they should do; a grand bargain on taxes and spending. Higher taxes will send Republicans to the polls in the next cycle. Material cuts in entitlements will keep Democrats at home. The analogy isn't perfect, but Gerhard Schröder's entitlement reforms might have been right for Germany, but were quite harmful to his party (the SPD).

At a deeper level, we have reached the end of anti-tax, "free" trade, anti-regulation, Open Borders, cheap labor, pro-bubble, pro-outsourcing, pro-war, etc. Republican party. That's my opinion at least, although I don't expect too many Republicans to agree. Actually, I don't think too many Democrats will agree either. The Democrats would welcome a Republican party friendlier to higher taxes, regulation (in some case), and Open Borders.

However, the Democrats are genuinely concerned about a (very hypothetical) Republican shift away from an interventionist foreign policy. Note that almost hysterical reaction to (some) Republican opposition to the Libyan campaign in the Republican primaries. A significant Republican shift on trade would appall the Democratic leadership (including Obama).

The status quo is perfect for the Democrats. They get the free trade policies they actually want while blaming the consequences on the Republicans (with considerably justification). A Republican shift would force the Democrats to actually chose between trade restriction (favored by the rank-and-file) and free trade (rigidly embraced by the leadership). Either way it's a lose-lose. Of course, a Republican shift on trade is very hypothetical at this point. Notably, the same points apply to cheap labor.