Fivethirtyeight, now nestled under the longingly protective wing of the New York Times, forecasts that the Democrats are likely to lose seven or eight seats. The seat that keeps them in a majority (including independents) is that of Senate majority leader Harry Reid in Nevada. If that goes then the Republicans will have a majority. In 1994, the Democrats lost eight Senate seats and this was seen as catastrophic.

Real Clear Politics meanwhile is forecasting a net gain of 28 with 35 toss-ups for the Republicans. If the Republicans perform as well as RCP is forecasting and takes 12 of the toss-ups then it will be in a majority in the House. The Democrats lost 54 in 1994 so the performance may be slightly better than that but that will do very little to console Democrats if they lose the House.

By way of comparison, the Democrats took 30 House seats and 6 Senate seats in their stunning 2006 success. So it’s looking bad.

Despite the growth of private sector jobs over the last eight months and the return of growth, the economic recovery is not yet tangible enough to convince many Americans that President Obama’s economic policies are sound. How he must regret not pitching for a larger stimulus in the earliest part of his presidency. His desire to see a $50billion transport infrastructure stimulus is relatively small fry and won’t get through a pre-election Congress anyhow.

So the economic message is fuzzy. Healthcare is misunderstood with Republicans more throatily campaigning on the issue than Democrats. The only thing that can save the Democratic majorities is a bit of the Obama campaigning magic (his approval ratings are negative but only marginally so) and a vigourous turnout operation.

All is not lost for Obama and the Democrats but don’t underestimate what a Republican takeover of Congress could mean as the President will inevitably have to compromise- unfunded tax cuts for the wealthy, a fiscal policy more in step with Europe and potentially deflationary as a result, and little chance of sensible immigration reform or climate change policies.

To put it another way, the next few weeks matter.

Goodhart has a point though ‘mass immigration’ feels like pretty combustible rhetoric. I’m speaking as someone whose natural inclination is liberal and sees diversity- within the parameters of common shared values, laws, culture and language- as a positive social and economic force. Just to be clear, here is the pattern (source ONS) of immigration since 1999:

So the evidence does show that we have had historically high levels of net immigration. It appears to now be declining- partly due to recession, e.g. 50,000 people went to Poland in 2009 and it’s not a great leap of imagination to say that they were Polish, and partly due to shifts in policy, not least the introduction of the points based immigration system. However, the levels of net immigration upturned significantly from 1997 which suggests that was as a result of policy- significantly so.

Now, there are both costs and benefits of immigration on the levels we seen in recent years. On the benefit side, there is little doubt that we would not as a country have been able to expand the NHS in the way that we did without hiring healthcare workers from abroad. The workers were young and less likely to use the service and beneficiaries were considerably older on average. However, on the cost side, wages and terms and conditions would have been impacted negatively for some. This was most keenly felt at the lower end of the wage scale. So the distribution of costs and benefits would not have been even with the costs falling on workers in some of the most precarious situations.

During the European election campaign, I blogged on a long conversation I had with a BNP voter in Birmingham Erdington constituency. It became quite clear to me that he wasn’t racist- in fact, he acknowledged that his black and Asian colleagues were experiencing exactly the same insecurities that he was facing. However, nonetheless, it was difficult not to have a degree of sensitivity to his position. This a point that David Blunkett acknowledged during the Goodhart programme. While he didn’t regret the policy changes, he did regret that there was not more of a response to compensate certain communities for major change.

And this for me is the key point. The rhetoric of globalisation and policy responses to the rhetoric meant that many communities- often the most vulnerable and not just white working class communities- felt that they were in midst of convulsive change. For that roofer in Bimingham that change was real- his economic circumstances had worsened. For others, it was more imagined. Nonetheless, and we constantly see this with lost Labour voters, there are people who were not comfortable with many changes they were either experiencing or felt they were experiencing.

So the distribution of costs and benefits were uneven and many felt a sense of powerlessness. It should be stated this doesn’t just apply to immigration; it also applies to change- mainly economic- in many dimensions, e.g. when an industry closes or downsizes.

Further down the line, we may as a community see enormous benefits from the immigration that occurred during the noughties- much as America has seen from its experience of immigration. There are also risks that we can not perhaps forsee. The clear lesson though for change of any kind is that it must happen with consent and be managed effectively. The state weakened in the face of global market forces and this came to be seen almost as virtue at times in New Labour thinking. Yet again, we are seeing global market forces assert themselves with no apparent benefit for local communities. The Kraft takeover of Cadbury is a prime example (see my analysis on LabourList last week.) We and the local community and workforce are powerless to stop it.

Ironically, the major lessons from this are for those who instinctively favour liberal responses to the global economy. Without an awareness of the social parameters of change, a degree of state counter-balance to market forces, and the encouragement of democratic discussion and legitimacy for change, liberal attitudes come under threat. The architects of the immediate post-war paradigm of embedded liberalism knew this. Market liberals forgot that. The consequences were predictable.