The Drum (ABC online)

By David Smith 

Intrade, America’s biggest political futures market, had a frantic couple of hours after President Obama’s announcement that Osama bin Laden was dead. By the time the market closed late on Sunday night (US time), Obama was trading at a nearly 70 per cent chance of being re-elected — up 10.5 per cent from the beginning of the day.

The next day, the market was collectively taking a more sober view, with Obama’s predicted chance trading at 64 per cent at the time of writing.

There are likely to be predictions in days to come that the successful operation against bin Laden ensures Obama’s re-election. The wild swings in the betting market give some idea of how confused and complicated the situation actually is. Certainly it is hard to think of any other single event that could have boosted Obama’s chances so much, but there is still a long way to go until November 2012, and Bin Laden’s death could have some unpredictable indirect effects on American politics.

Many, perhaps most Americans will now consider the main objective of the war on terror accomplished. This is far more important to Americans than long-term victories in Afghanistan or Iraq. While this is an obvious positive for the Obama Administration, it could also turn public opinion decisively against the war in Afghanistan, which will now seem pointless to many. The Administration may have a tough time convincing Americans of the continuing necessity of military operations in the region, not to mention in Libya.

Obama could have used Bin Laden’s death as an opportunity to accelerate the timetable of withdrawal of US troops from Afghanistan, but he has already signalled that this is not going to happen. In defence policy circles, Bin Laden’s death will not create any appetite for disengagement. Defence hawks on both sides will see Bin Laden’s death as vindication.

For hawkish Democrats, this will be proof that a focus on the “right war” in Afghanistan can produce the right results, while Republicans will see it as an ultimate victory for Bush’s foreign policies, from which Obama has deviated little despite his pre-election talk.

While there has been a lot of talk about the possibility of Al-Qaeda retaliation, it seems unlikely this will happen on US soil or even at a well-guarded US diplomatic post. For a long time now, it seems that Al-Qaeda has been too weak to strike directly at the United States. Retaliation, if it comes, will probably be against defenceless civilians in a Muslim country.

Pakistan currently has much more to fear from Al-Qaeda than the United States, and not just from a possible terrorist attack. The Pakistan government has long been pursuing pro-US policies at odds with the beliefs of the country’s population. While Pakistanis are not pro-Bin Laden, many of them will resent their government’s much-thanked co-operation with the American military in carrying out a lethal strike outside Islamabad.

There has already been a lot of speculation about the possibility of an Egyptian or Libyan-style conflagration in Pakistan, and if this occurs it will be difficult if not impossible for the United States to stay out of it. That would be extremely unpopular in the United States, whose people have been distinctly unenthusiastic about the prospect of military engagement in places like Libya.

Bin Laden’s death will restore some credibility to Democrats on national security, an issue on which Republicans have dominated them for decades. Obama will enjoy a strong resurgence with hawkish “Reagan” Democrats, which gives him a good chance that states such as Pennsylvania and Ohio remain in his column at the next election. However, even military victory “bumps” do not last forever, as George Bush senior found out—his massive approval boost due to sweeping victory over Saddam Hussein in 1991 steadily evaporated throughout 1992. As with Obama, economic conditions were not in his favour.

Some of the more talented Republican candidates may drop out of the Presidential race at this point, seeing their money as better spent on a future campaign when they will not face such a strong candidate. As much as any boost in popularity, it may be this fact that is pushing the betting markets in Obama’s favour right now. The Republicans could end up with Candidate Trump after all.

This is a rare moment of unity among the American people.

While the war in Iraq was deeply divisive and many Americans harbor doubts about the war in Afghanistan, the objective of capturing or killing Bin Laden was broadly agreed upon by almost everyone. Even if little else has changed, this is a great and highly symbolic victory over a truly despised enemy.

A general mood of pessimism has engulfed American politics for most of the last two years; this event will be a fascinating test of the political power of renewed optimism.

David Smith is lecturer in American Politics and Foreign Policy at the United States Studies Centre at the University of Sydney.