Leading article: The pendulum has swung - and America has changed

But Barack Obama will face immense challenges in the White House

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Barack Obama's victory in yesterday's presidential election is a watershed for his country. His triumph is historic not merely because he is the first African-American – indeed the first representative of any of the minorities who now account for a third of the US population – to secure the nation's highest political office. It also comes at an extraordinary confluence of turning points: political, generational and economic.

The advent of a Democratic president, supported by enlarged Democratic majorities in both chambers on Capitol Hill, signifies the end of the conservative era that began with Ronald Reagan's victory in 1980. Today, the three traditional pillars of that winning Republican philosophy – a robust approach to national security, a blind faith in the market, and conservative social views – are each to varying degrees under challenge.

The 2008 election is likely to be seen as marking the moment when the pendulum swung back towards bigger and more interventionist government, towards a focus on action to reduce America's disparities of wealth, and provide more help to the less fortunate members of society.

Hastening this process is the economic and financial crisis, caused by the bursting of the greatest credit bubble since 1929. The 2008 election thus also draws a line under the boom that began under Reagan in the mid-1980s and, barring a couple of very shallow recessions, has continued since. This time however, the US may be entering a long and deep recession, with only sluggish growth to follow. This will change the social and geopolitical landscape in which President Obama (and probably his successors) will operate.

The third change is generational. Born in 1961, Mr Obama technically belongs to the baby-boomer generation of Presidents Bill Clinton and George W Bush. But he is a man whose formative years were not the self-indulgent 1960s but the late 1970s and early 1980s. That difference is compounded by his upbringing, exceptional for a US President, indeed the leader of almost any country. The |impact will be most evident in his foreign policy.

Having spent his childhood in Hawaii, on the very edge of America proper, and in Indonesia, the most populous Muslim country, Mr Obama is better placed than any US leader before him to grasp how the rest of the world sees America. Mr Bush's inability to do so was a major reason for the failure of his presidency on the world stage. Mr Obama's very background, coupled with a relative decline in US global power, means diplomacy will make a welcome return as America's preferred method of conducting foreign policy.

The tasks facing the new President are immense. The national coffers are virtually empty. Yet an economic crisis with few precedents must be confronted, two unpopular wars must be resolved. At home, much infrastructure is second rate or crumbling. The education America offers its children is falling behind that of its rivals. A healthcare system needs to be rebuilt, while social security must be shored up so it can cope with the demands of baby boomers as they retire.

Mr Obama comes to office with a fund of goodwill, at home and abroad. He may prove a disappointment, not least because expectations have been set unreasonably high. But the greatest presidents – George Washington, Abraham Lincoln and Franklin Roosevelt – were great precisely because they overcame huge challenges. Today's fraught circumstances mean Barack Obama has the chance to join their number.

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