Institutional failure week
-The opinions are the author’s own-
By the end of this week, the U.S. will face a government that is unable to act to aid the economy and a Federal Reserve that is unable to stop.
The stock market may well rise on this dysfunctional combination, only serving to prove that the economy and market are becoming fundamentally disconnected.
Tuesday’s election may well deliver a split Congress with the Republicans in control of the House of Representatives and the Democrats clinging to a narrow majority in the Senate. This means that there is no chance of further meaningful stimulus and that Democratic timidity will likely harden into an intransigence to match that of the Republicans.
Rather than building bridges, the next two years will be spent dickering over tax codes, and, as the 2012 election nears, fighting trade and currency wars.
Many will argue that this is right, that the election will freeze stimulative spending that is wasteful and unpopular.
Perhaps, but economic growth is extremely weak. The initial reading of third-quarter gross domestic product, released on Friday, showed the economy expanding at a faster 2.0 percent rate. Most of the growth, however, was from inventory rebuilding, a process that is very likely to slow. Actual growth in real final sales was an anemic 0.6 percent, making this the weakest such recovery on record, according to economist David Rosenberg of Gluskin, Sheff.
Why Obama isn’t sweating the midterms
By Joshua Spivak The opinions expressed are his own.
With the Democrats thought to be facing a tidal wave of voter anger, and Republican incumbent Senators already being swept out of office in record numbers, the one person who seems unconcerned is President Obama. He has good reason not to sweat: while conservative activists are hoping the 2010 result is a harbinger for the presidential election, history shows that even disastrous mid-term elections don’t say much about a president’s re-election chances.
It has become a cliché that the president’s party suffers defeat in their first mid-term election. With a few exceptions, most notably the Republicans in 2002, the president’s party invariably witnesses setbacks in that first national return to the voters. Sometimes the impact is modest, other times the impact is so severe that it costs the party in power control over the legislature. Everyone is quick to remember the Democrats disaster in 1994, when they lost 54 seats and control of the House for the first time in four decades.
But the same phenomena occurred in 1954 when the Republicans coughed back the House to the Democrats, and in 1946 when the Republicans took control after a gain of 55 seats. Similarly, before the 1982 election, the Republicans had a minority in the House, but it was large enough to make deals. But a decisive Democratic performance ended that. Practically every mid-term has examples, including a 60+ seat deluge to the Republicans in 1914 following Woodrow Wilson’s first term and a 50+ seat victory that gave the Democrats control of the House in 1910.
What is noteworthy about the mid-term debacles is that they rarely spell disaster for the president. Looking at the elections of the past, one can see that Clinton, Reagan, Nixon and Eisenhower all cruised to reelection, and both Truman and Wilson skated by successfully. Rather than be hampered by the opposition controlling one or both houses of the legislature, these chief executives were strengthened. It gave the president an easy foil to score quick political points.
But it is not talking points and campaign ads that should give the incumbent comfort. It is another reality of mid-term elections that make the results a poor predictor of the next election. Voter turnout falls off greatly in mid-term elections. Since 1970, voter turnout in a mid-term election has never topped 40%. Outside of the 49% turnout in 1996, presidential elections always see over 50% of voters going to the polls. Just the last two elections tell the tale. In the presidential election of 2008, voter turnout among the voting age population was 56.8%. In 2006, it was just 37.1%.
@BHOlied – No worries here- I’m all for Anyone from either side of the isle that offers the most intelligent, specific and likely to succeed Solutions (sorry, “No” is not a solution).
My point was, as of now from the GOP I see absolutely No Likely alternative right now. All I do see at this point are silly caricatures. Perhaps better suited for mindless laughs on a reality show- but nothing to run the worlds foremost country.
from James Pethokoukis:
Are Obama’s healthcare troubles actually a good thing?
Mickey Kaus gives his theory:
It’s easy to forget that, even if Obama’s health care effort is bogging down, the effort itself still serves his presidency as a crucial time-waster, tying up Congress and giving him a reason to postpone (or the public a reason to ignore) those other divisive, presidency-killers. Obama needs some excuse for putting off unpopular Democratic demands; health care’s a good one. If he keeps failing to pass health care until spring, that might not be such a bad outcome. In fact, even quick passage was maybe never in his interest. There are things more unpopular than struggling. ... Cap and trade, immigration legalization, “card check”—these are not what you’d call confidence building appetizers leading up to the main course of Obama’s presidency.
Me: None of it works when Americans have less and less confidence in Obama. And that number will continue to work against him as long as unemployment stays high.
Democrapic policies – from illegal amnesty, to card check, to “the fairness doctrine”, to health care, to affirmative action quotas, to lawyers for terrorists, to tax hikes – are all disasters for the US and unpopular.
It just goes to show that the health and happiness of America is not their primary concern – buying votes from special interest groups is.
Ron Paul is trying to downgrade power of FED and in yesterdays interview said: ‘If we succeed in Congress/Senate to challenge the power of FED significantly (what he suspect is not possible right now) ANY president would veto such decision’. Scary conclusion about real FED power. People and their representative including president cannot stop harmful actions of private cartel in any ways? Good morning America.