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Wednesday, January 04, 2012

The Ron Paul Strategy

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Dr. Ron Paul has a loyal following... but is a candidate who is least likely to win a presidential election because his positions are too problematic for many... both Democrats and Republicans, but especially for those who call themselves Independents.  That's why I was surprised to read this article from a site that supports Dr. Paul:

You don’t have to register Republican to vote for Ron Paul this Primary Season, that is if you live in one of the 14 (+) “Open Primary” States that allow voters to choose which Party ballot to vote on when going to the polls. If you are an Independent or Democrat in an Open Primary State request the Republican ballot in order to vote Ron Paul for the Republican Nominee.  SOURCE
The reason that this is surprising is because this is exactly the tactic that the Democratic Party would love to deploy:


"Paul is doing the best job of getting those people who aren't really Republicans but say they're going to vote in the Republican primary," explains Smith. Among that group are libertarians, dissatisfied independents and Democrats who are "trying to throw a monkey wrench in the campaign by voting for someone who is more philosophically extreme," says Smith.  SOURCE
I believe this "monkey wrench" process is exactly how Sen. John McCain beat out Mitt Romney for the 2008 Republican nomination. McCain was seen as the weakest Republican choice and targeted by the Democratic Party to be the opponent of whomever was Democratic nominee.

This is a major weakness in the nominating process... one that simply cannot be corrected under the present primary scheme and one that favors an incumbent president by a substantial margin.

Dr. Paul appeals to many people who are looking for someone who is philosophically consistent about reducing the size of government and having a non-involved foreign policy.  While the majority of Republicans and many independents agree with the first position, the second position is a major concern in a world of aggressive nations and Islamic movements... the equivalent of a small child trying to hide from danger by covering its eyes.

If there ever was a real period of American isolationism, it was not within the past two centuries.  American expansionism focused on North America rather than elsewhere during the first half of the 19th century and the Civil War certainly focused the nation inward for awhile, but the 20th century showed that the United States was not a hands-off entity... nor would the world allow it to be.

Isolationism in the 21st century would be an extremely dangerous gamble during a time when rouge nations and groups of fanatics are bent on acquiring nuclear weapons and using them for blackmail... or worse.  Even Barack Obama has had to rethink non-involvement, although his implementation of foreign policy is like that of a toddler playing with blocks... chaotic at best.

Also see: Leftists May Boost Ron Paul in Iowa

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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates

FEDERAL RESERVE & HOUSING

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February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
November 28, 2007 FED VICE CHAIRMAN DONALD KOHN
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."
http://www.reuters.com/

December 11, 2007 Somehow the Fed misses the obvious.
fed_rate_moves_425_small.gif
[Image from: CNNMoney.com]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's Economy.com. "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)