The writing is on the wall for Dems now. Obama and his economic advisers bet the farm earlier this year that the economy would recover without a large stimulus, that cutting sweetheart deals for bankers would be enough, and that reappointing a Fed Chairman who sees nothing untoward about having very low inflation and very high unemployment would be vote-winners with people who've lost their jobs.
Also -- Coakley's loss helps validate a crazy theory I've long held about elections and professional sports, which (as a plus for Dems) was one region-specific factor which helped get Coakley beat: Boston sports fans' beloved Patriots got whacked in the first round of the playoffs just a week ago. I suspect anything which puts voters in a bad mood gets taken out on the incumbents... Dems have little to do with high unemployment, but since they're in power, and because voters want things to be "better", Dems bare the brunt of the blame for the economy. If the Patriots had been winning, suddenly a lot of voters would start thinking "maybe things aren't so bad...." In any case, no I haven't got any firm data to back this up, it's just another project that's some 14 projects back on my research ideas list...
In any case, I think it's worth pointing out that Bernanke's Fed is likely to oversee persistently low inflation and high unemployment. You heard it here first: by the time Bernanke is done, the Republican Party is quite likely to have a firm grip, once again, on all three branches of government.
I think the message for Democratic lawmakers is clear -- you'd best get that economy up and running! Whatever became of that jobs bill? You'd do well to get $200 billion out the door lickety-split, in time for the November massacre. If I were the White House, I'd also have a look at how Geithner is polling... Firing Geithner would not make him a sacrificial lamb -- Geithner & Summers had their chance at bat, they just struck out. Next batter please... And aren't there FOMC appointments the White House still needs to make? I'd make sure to get some inflation doves on there ASAP -- Joe Gagnon?