Sunday, April 06, 2008

Politics As Unusual


If you follow this blog, you'll note that I occasionally... but not regularly... comment on the U.S. campaign for president. Most of my comments have been the sniping kind rather than the "I support this candidate" sort.

The Baltimore Sun ran a piece called, "McCain: 'The luckiest man alive'" that gets close to why I just can't bring myself to get passionate about this election... and why this election really is going to be a "gut check" for American politics.

"Given the Democratic advantages, it shouldn't be close," said Andrew Kohut, director of the Pew Research Center. "It's close because of the way that voters are able to see McCain as a potential agent of change, and no other Republican could have done that."

McCain's image isn't tethered to his party, a problem for him during the primaries, when the sincerity of his conservatism was in question. Those partisan shortcomings are now regarded, on balance, as pluses.

He is widely viewed as a reformer who challenged the establishment, including Republican leaders, on such issues as campaign finance and immigration.

McCain "is not seen like Bush by the voters," said Kohut.

A recent Pew poll showed McCain leading Obama by six points among independent voters, a key swing group that disapproves of Bush's performance as president. If Clinton is the nominee, McCain would cut into the Democratic advantage among voters under age 30, the poll found.

Top Clinton strategist Mark Penn has pointed out that McCain, a senator from the Southwest who has tried to put together a coalition for immigration reform, is well-positioned to bring Hispanic voters, the newest and fastest-growing sector of the electorate, back into the Republican fold.

Other Democratic strategists have noted that McCain's patriotic image and war-hero status could appeal to the white, socially conservative working-class voters, once known as Reagan Democrats, who are expected to be a pivotal group again this November.

His assets as a candidate also reflect the weaknesses of his Democratic rivals.

One of Obama's greatest liabilities, his lack of experience, plays directly into McCain's qualifications. His 48 years of public service are divided almost evenly between careers in the military and as a legislator in Washington.

Clinton's experience, polls show, is also a question mark, as are doubts about her trustworthiness. Americans were six times more likely to say they don't trust Clinton than McCain, according to a recent Gallup poll that probed the weaknesses of the presidential candidates.

Prejudice against an African-American or woman as president - difficult to measure accurately in opinion surveys - works to McCain's advantage. He would be the oldest person to get the job, but few of those who oppose McCain, 71, said it was because he was too old, according to Gallup.

If any of you have been watching the HBO series "John Adams," you might get the impression that this year's campaign has the making of a mini-revolutionary war... they are all fighting for "change."
In reality, this campaign is so far away from the ideals and sacrifice of John Adams and his peers that it has become a campaign of revulsion rather than revolution.

Democracy never lasts long. It soon wastes, exhausts and murders itself. There was never a democracy that did not commit suicide.
John Adams
Why do I get the impression that so many of our politicians are holding a gun to our head and asking us to pull the trigger?


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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


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

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."
"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."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
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 "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)