Economic populism has won for Democrats

The last time US Congress changed hands, the Republican freshman class of 1994 roared into town under the leadership of Newt Gingrich as speaker and quickly advanced a conservative agenda of exceptional ambition.

In the just concluded mid-term elections for the House of Representatives and the Senate, the Democratic Party, the present minority party in both houses of Congress, campaigned hard bringing focus to the failed policy of an unpopular war in Iraq.

The Democrats also higlighted the "middle-class squeeze" and "median wage stagnation" by economists, the incomes of median American households have barely shifted since George W. Bush was elected on a ticket of "compassionate conservatism" in 2000.

The American electorate have resoundingly spoken at the ballot box. Six States voted Tuesday on initiatives to raise the minimum wage. All six endorsed those initiatives, mostly by solid or overwhelming majorities (The states were Arizona, Colorado, Missouri, Montana, Nevada, and Ohio).

This news may come as little surprise--boosting the minimum wage always polls well--but it did signal an Election 2006 trend: Economic populism was a big winner.

In his post-election column, Pat Buchanan, a conservative columnist who ran for presidential election in 2000 wrote of the results as proof that "economic nationalism" is returning.

"With the 2006 election, America appears to have reached the tipping point on free trade," Buchanan wrote. "Anxiety, and fear of jobs lost to India and China, seems a more powerful emotion than gratitude for the inexpensive goods at Wal-Mart."

Many leading Democrats, including Mr Brown and Mr Webb, campaigned for "fair trade" and "putting Americans first", which is code for including labour standards in bilateral trade agreements and being more critical of companies that "outsource" manufacturing jobs to China and service sector jobs to India.

They are likely to be aggressive in pushing for tougher scrutiny of explicit and hidden tax breaks for large energy and pharmaceutical companies – known as "corporate welfare".

As the world focuses on the brewing debate over Iraq between the Bush administration and a Democratic Capitol Hill, the battle to define America's response to globalisation is also hotting up.

"Both the Democrats and the Bush administration will want the other side to get the blame if their mutual promise of bipartisanship falls apart," said a senior Democratic strategist. "It could be over Iraq, it could be over the economy."

It is said that when US sneezes, the rest of the world catches a cold. So now the rest of the world can watch to see what gets done or not done in the US Capital.