The best argument for re-election of a Republican President has been the strength of the economy under W. He may have wasted $450 billion in Iraq and botched the war to boot, shafted the least well off, and placed faith over reason, but he did right in general by equity investors and home owners — who tend to vote.
No longer. This month’s global market meltdown is a strong indicator that growth will slow between now and the next election. The housing bubble is over: look for flat or declining prices, something we have experienced here in Massachusetts for a while now, as the impact of tighter credit flows through to the retail market.
The political consequence is that voters will make their choice for President in an economic environment that will be less rosy than at present. Home owners, in particular, are likely to be grumpy.
The Democrats will benefit. Clinton, I suspect, will be helped most of all: her message of competence and experience will resonate with voters who want change but are fearful of risk. She can highlight the sustained economic success of her husband’s administration to good effect. Obama also may be aided: his personal achievements, pragmatism, and excellent television demeanor exude competence and effective management. Edwards … as Borat would say, not so much: unless we fall into a depression, which is unlikely, his populist pitch is not likely to garner a majority of voters, even Democrats, if history is any guide — especially “folks” worried about their jobs and mortgage payments.
Most of all though, an S&P 500 down over 10% is a solid kick to the nuts for anyone trying to run a national campaign with an elephant for a mascot.
Unless Democrats can explain what they/we would have done to prevent this meltdown, I’m not so sure that we will see much political benefit from this economic woe. Otherwise, it is like blaming today’s weather on Republicans.
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Wait a minute. That analogy may not work anymore.
and it’s already getting ugly. The meltdown might be a short term gain for Dems in that people will have another reason to vote against the GOP, but then what?
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It has the potential to dwarf anything that we’ve ever seen, and there isn’t a whole lot that the Fed or the ECB can do about it.
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Whoever the next POTUS is, they will be taking office in an environment as tenuous as any that I can remember. Between Iraq and this, there just aren’t going to be a lot of good choices.
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BTW, if anyone thinks that because they don’t have an ARM, or maybe even a mortgage that this won’t affect them, think again. The amount of leverage is incredible. This local guy was thought to be fairly conservative in the way that he ran his hedge fund, but it tanked 2 weeks ago and investors lost $1.6 billion, including:
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This is just one relatively small hedge fund out of thousands, and these are the “smart guys”.
that doesn’t make stocks a bad investment.
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My point: how much have the “smart guys” in hedge funds made in aggregate… profits minus losses? Is it positive?
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Harvard lost $350MM, but how much have they made on hedge funds? That some win and some lose isn’t much different than other risky investments; the question is: in aggregate, how have the hedge funds done?
There is a political problem for Democrats with Wall Street. People tend to see their fortunes, namely through their 401(k) accounts, tied to the Dow. (And in fact they’re partly right, since a lot of mutual funds, whether they admit it or not, are index funds.) So people tend to overemphasize news about the Dow falling and ignore economic issues like job creation (unless they’re looking for work) or even the deficit.
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Every election, it seems, we start hearing how the Dow will drop if the Democrat is elected, because that will mean higher taxes and higher government spending and other things business says it doesn’t like. Then the Democrat wins, and the market drops — but rebounds quickly.
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Tangentially, it will be interesting if Spitzer ever runs. A lot of Wall Streeters would spend a lot of money to make sure he didn’t get elected. They hate him with a passion.
Deval Patrick is as much to blame as anybody else for this mess. I don’t know how he sleeps at night.
…counsel. He was a board member.
It now reads as a former Board Member for Ameriquest how does Deval Patrick sleep at night?
I am strongly hoping that the voters blame the Republicans for this. I would love to see a landslide. However we need to remember that the idea that you should push the economy with very low interest rates (and the consequent housing boom) was Robert Rubin’s idea. This greatly inflated housing prices and pushed many people into these crazy mortgages. I am not saying that this sort of out of control lending was Rubin’s goal, but we started it. The Republicans have not had a coherent economic policy. This was ours.
was a really bad idea. The coming resets over the next 2 years are going to be brutal.
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Bill Fleckenstein has been saying this for three years. And he’s been right.
…the problem was that somebody allowed for virtually zero down payments on mortgages for houses. That is the problem now–high risk (so-called “subprime”) mortgages. For which there was no down payment, and thus the borrower had little to lose in the case of a default.
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The mortgages are securitized (that is, a number of them are bundled together) and sold to investors (investment banks, mostly, I presume) who, in their infinite lack of wisdom, apparently don’t check the risk that is inherent in the underlying mortgages before buying the securities.
was lenders making loans to people who frankly shouldn’t have gotten loans. This is what eventually happens with a lending strategy that actively seeks to do business with high-risk borrowers.
…that there are two parties to the deal. Those who do the securitizing (they aren’t really doing the loans, they are merely securitizing the mortgages), and those who buy the securities. If those who were buying the securities didn’t look at the credit-worthiness of the underlying securities, why should the securitizers rein themselves in?
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I call it the “greater fool theory.” The securitizers package the loans and sell the securities to the “greater fools”…the hedge funds.
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That was somewhat orthogonal to my point, though, because the comment was in response to a comment relating to Robert Rubin and interest rates. The current problem has nothing to do with interest rates; it has everything to do with irresponsible securities purchasers.
the stock market this week regardless of political affiliation.
Wow..to actually be pleased that the stock market has taken a huge hit with the prospect that somehow Americans will “blame” he Republican party or any party for that matter is pretty sad. I want America and it’s people to prosper regardless of politics…don’t you?
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I had several short positions that made me a little extra pocket change; is it OK for me to take joy in making money on the market’s movement? Just asking.
shorting the market.The point of my post though, was not to
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badmouth the market but rather to be disappointed with those who view market movements through a partisan ‘lens’. Obviously, you are a sophisticated investor and would be the first to acknowledge that “partisan politics” has nothing to do with the market. I was merely saying that to take joy in any of its losses for millions of Americans and assign blame for it to a “political party’ is both sad and ridiculous
Tomorrow’s newspaper will carry the story of how one country is endangered by this disaster.
Please don’t twist my words. I take no joy at all in the recent performance of the market. My wallet can testify to that. All I am saying is that I think it is likely there will be political fallout from the decline. That’s it. I’d be interested to know if you agree or disagree with the substance of the post.
GWB is almost solely responsible for allowing 10 million illegal aliens into our country.
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They are only killing and raping Americans that other Americans couldn’t be bothered killing and raping.
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More Americans are dieing at the hands of illegal aliens than are being killed in Iraq and Afghanistan.
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Thanks Mr. President. You will richly deserve your place in American history.
pragmatism, and excellent television demeanor exude competence and effective management.” Wow, beauty is in the eye of the beholder I guess. I don’t see that at all.
Progressive Dem’s having close to a financial orgasm based on Wall Stree is doing a correction, and getting HOT over the fact that this could hurt R’S running…Forget the fact, that real people are getting REAL declines, forget the fact the Dem’s Social Security will not be anywhere for anyone under 50, so folks are counting on the 401’s etc..etc. And obviously forget the fact that Wall Street WILL hit a buying frenzy like they/it did yesterday,(Thursday) within 15 minutes it went from 300 plus down, to close with a minor gain…It will be back up, the IRAQ issue is turning around, the SURGE IS WORKING, and all will be right with the world..so the Dems
will have to go back to investigation after investigation after investigation…they are attacking Bush, who can’t run again, and can’t lay a finger on the R’s Candidates, meanwhile the Progressive wing of the D’s is eating their own… Market recovers after correction…Sub Prime and other issues work out…Iraq works out…Dems running congress and senate sink into single digits in polls, and what do you know….PS the economy was NOT the best reason to vote R…and until we see that people don’t trust us D’s running the security of this country we do not win…
and if Reed et all keep sounding as they do, we lose, it’s that simple.
You don’t sound like a Democrat to me, “truthteller.”
To bad, so sad,
I sound EXACTLY like what a real died in the wool. JFK Dem is SUPPOSED to sound like…do any progressives remember “Ask NOT what your country can do for you, Ask rather what YOU can do for your country”
You/the progressive wing, i.e. Moon bats. (Thanks H. Carr)
will KILL this party…That wing will be left with Cuban Health Care…Cause fat boy, (never saw a lie he didn’t use) will make it happen…Harry Reed, Nancy P, George S.. (Not even an American) and Jamie E… and Hard working, Blue Collar Americans will hate our party and the other party…BUT fear not, with legal, illegal aliens, and Coupe Duval giving them a driver license, your lawn will look great as people pass your street fleeing this state and this country….
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WHERE have all the Real Dem’s gone…..
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AND PS…The American GI did not ask for progressives to declare the war lost, or to QUIT…they are and conversely we are going to WIN….as long as Harry Reed and crew stay the hell out the way…
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AND PSS..anyone see the recent polls..the Head “progressive” (i.e. socialist) in the 5th Congressional race has slid from 3rd to 4th…Go Jamie go…oooopppsss wrong way buddy… And he is going to run for Resors seat next…He’ll get killed…and then lose the 37th….Not to an R….to a “I”
I don’t get this.
With a Republican Administration avoiding planning in advance for the Iraq War because the planning might undermine the selling of the war — with the predictable result of sending people into the meat grinderWith our Constitutional form of government reduced by this Administration to a partisan playthingWith the U.S. Justice Department turned into an extension of the RNC
With all these things, you are concerned that on a blog somewhere some progressive Democrat is wondering whether one of the failures of this most incompetent Administration might gain Democrats more votes. The sheer partisan chutzpah of the current Administration should make one very shy about saying such stuff about Congressional Democrats.
I did not know you were in the meetings in the White House and knew there was no planning…And since you are not in the Military, probably never were and not involved in the “Meatgrinder” I guess the rest of your rant is just that…. Let me order you a drool bucket from RONCO and a pocket fisherman, and you can rest
Have you missed all of the writing about the Bush Administration? Did you enjoy your vacation?
Moon bats, left wing progressive media, Bush haters…
He was wrong, dead wrong on illegals..he was right on Iraq
and still is..lets us fight them there, not here…
I notice that you joined us just this month. Welcome.
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What I don’t understand, though, is why the heck you are posting here then rather than in your diary? You are as if from another planet. If you just roll out right-wing catch phrases padded with ellipses, you aren’t going to convince a soul. Do you think that these phrases (“lets [sic] fight them there, not here…”) worry us or disturb us? Do you imagine that we just have to hear these phrases 50 times and we’ll be converted? Presto! You’re hoping, maybe, this is the 49th time for some “moonbat” reader? I don’t get your motivation. Surely, it is not merely to be annoying.
Thanks for the nice welcome….I’m new to this process and I assumed it was to respond or comment on issues…
Then as usual after a “hook” you start with your personal attacks.. I really don’t give a DARN reference your insults. It is the only defense/weapon the “progressives” have…
Had you bothered to review what I was responding to you’d have seen yet another “wonderful” attack, based on a difference of opinion…RIGHT WING? Proves you have not one shred of thought/intellect, why? Because YOU and your political views do not agree with it? Was 911 a BUSH attack? Is Michael Moore the ONLY honest man out there? Read something other than the Globe, or other left wing hatchet papers, enlighten yourself.. They attacked us PERIOD, they are not poor, they are not slaves to evil Americans,(We have done good in the world, not all bad as your kind would have all believe) not all are poor (see Bin Laden, see the Doc’s in England)..their plan, stated goal, only objective is to dominate, starting with the “Great Satan” That is us, in case you did not know…
I don’t give a hoot in hell if you are worried or disturbed..I CAN and will protect me/mine, you folks are on your own, and if you are an identified “minority” or a “victim” OR a teacher in this country YOUR grouping will be the first to be killed..if we don’t kill them all, they will surely be here…
Just one mans opinion, based on reading and real life experience…and while at it…you and yours stop trying to get the troops to return because “they want it” You want to help, shut up and get outa the way, or grab a weapon and join in!
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Hey. again thanks for the hook sentence, I could tell you really meant it….Enjoy your day
He doesn’t seem to be familar with Standard American English, and rarely forms a complete sentence to form a coherent thought. I’ve given up trying to figure out what the heck he is babbling about.
Perhaps it’s all a metaphor that the truth is unknowable.
I notice that you joined us just this month. Welcome.
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What I don’t understand, though, is why the heck you are posting here then rather than in your diary? You are as if from another planet. If you just roll out right-wing catch phrases padded with ellipses, you aren’t going to convince a soul. Do you think that these phrases (“lets [sic] fight them there, not here…”) worry us or disturb us? Do you imagine that we just have to hear these phrases 50 times and we’ll be converted? Presto! You’re hoping, maybe, this is the 49th time for some “moonbat” reader? I don’t get your motivation. Surely, it is not merely to be annoying.
I notice that you joined us just this month. Welcome.
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What I don’t understand, though, is why the heck you are posting here then rather than in your diary? You are as if from another planet. If you just roll out right-wing catch phrases padded with ellipses, you aren’t going to convince a soul. Do you think that these phrases (“lets [sic] fight them there, not here…”) worry us or disturb us? Do you imagine that we just have to hear these phrases 50 times and we’ll be converted? Presto! You’re hoping, maybe, this is the 49th time for some “moonbat” reader? I don’t get your motivation. Surely, it is not merely to be annoying.
I notice that you joined us just this month. Welcome.
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What I don’t understand, though, is why the heck you are posting here then rather than in your diary? You are as if from another planet. If you just roll out right-wing catch phrases padded with ellipses, you aren’t going to convince a soul. Do you think that these phrases (“lets [sic] fight them there, not here…”) worry us or disturb us? Do you imagine that we just have to hear these phrases 50 times and we’ll be converted? Presto! You’re hoping, maybe, this is the 49th time for some “moonbat” reader? I don’t get your motivation. Surely, it is not merely to be annoying.
I didn’t mean to be quite so welcoming. The site seems to have experienced a problem. Four presses to the “post” button that I thought were in vain lead to quadruplicate commentary.