Blue Mass Group

Reality-based commentary on politics.

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  1. …Michael, you may have better insight than I on this subject, but given the drop in crude oil and other raw materials, it seems the markets are preparing for a big European recession, that could very well have a ripple effect over here in the next several months, negatively impacting our already tough fight in November?

    • Still, all in all, the immediate (i.e. before November) risk to the US economy is probably pretty minimal. The EU is not going to let Greece or any other country go under. What you have witnessed is a classic “flight to quality” — which means avoiding risky assets. The US treasury bond market has soared, but almost everything else has headed south.

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      p>So, in the near term, I think the damage is likely to be mostly financial (not to minimize the impact of that!) as opposed to harm to the real economy. In other words, the upturn already underway will continue, at least for a while. It’s impossible to know, of course, whether the worries of the financial markets right now will prove to be justified, or whether the mood will reverse itself if it turns out that this was a false alarm. In either case, it’s likely (in my opinion) that job creation will continue between now and November. Tax revenues will rise.

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      p>We’re still not out of the woods, by any means, and it is going to take years to recover from the damage done by 8 years of reverse-Robin Hood tactics. Still, voters focus on the present, I think, and if they feel better about their lives and their prospects in economic terms in November than they have for a while, the Dems will be the beneficiary.

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      p>Rose colored glasses? Perhaps. Yet, I think the tide is turning in our favor. And we need to take advantage of that.

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      p>Remember the words of Brutus:

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      p>

      There is a tide in the affairs of men.
      Which, taken at the flood, leads on to fortune;
      Omitted, all the voyage of their life
      Is bound in shallows and in miseries.
      On such a full sea are we now afloat,
      And we must take the current when it serves,
      Or lose our ventures.

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      p>Julius Caesar Act 4, scene 3, 218-224

      • In other words, the words William Shakespeare (or was it Edward de Vere, Earl of Oxford?) put into Brutus’ mouth – just sayin’:)

      • The issue is that Greece has some economic problems, but cannot take the fiscal steps necessary to regulate them.  If they weren’t in the Euro, this wouldn’t be a crisis, because Greece would be able to devalue their currency and loosen up on inflation to minimize the problem, a common solution set.  

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        p>Greece’s major problem is that its economy is being managed as if it were Germany’s.  

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