Wednesday, January 2, 2013

Sorta political: Reasons for hope

Politically and economically, we are in a very bad place right now. The political problem lies not with the elected leaders but with the public. We—meaning Canada, the United States—are currently faced with a public that is stupid and ill-informed and, apparently, likes it that way.

Governments have gotten themselves so heavily into debt that some sort of crisis which will severely damage public confidence in institutions is now inevitable. They got that way because the public keeps imagining it can have its cake and eat it too and therefore keeps voting for governments that make irrational promises about things such as free medical care, social security and mythical untaxed rich people who can be made to pay for it all. This is scary because who knows what insane ideologies will arise in the wake of this coming crisis.

Economically speaking, it's harder to judge. Maybe growth is just around the corner. It could happen and recoveries tend to start when most analysts are still pessimistic. That said, the future is not clear and I think another recession is more likely than a recovery at this point. 

The short term, however, is looking a whole lot better than it as just a  few days ago. It looked, for a while, like Obama was going to get his way and use a manufactured crisis over the supposed fiscal cliff to 1) hammer home some really stupid policy and 2) still get to blame his opponents when these policies, inevitably, failed. And it seemed like the stupid party (Republicans, just in case you didn't know) were not only not going to fight him, they were actually going to make his life easy.

And then every thing started to go in exactly the opposite direction of where they seemed to be going. The first positive hint showed up in the New York Times. It was an article saying that it was time to ditch the constitution. Seriously! This provoked a lot of outrage but it was really a confession of weakness. When people start talking that way, what their really telling you is that their immensely frustrated because they realize they are not going to get their way.

The second hint showed up in a conversation I had with a stockbroker I know. He's pro-Obama—contrary to what you might guess, most people in the financial services industry are. He opened his remarks by telling me he liked Obama and thought the only reason some people opposed him was racism. This stuff went on a while and I let him go, having learned the hard way that people are not willing to be rational on this point. I was, to tell the truth, only half paying attention, nodding politely and thinking of a way to change the subject when I realized that the whole tone of the discussion had changed somewhere along the way.

He said, "The think that has me worried is Biden. Why did they turn to him? I understand the reasons, Biden has got the contacts, he can make the thing happen. But this Biden! If he is better placed to do this than Obama then maybe, I mean Obama's a nice guy and I support him, but it's like they're admitting he isn't very good, that he hasn't got the negotiation skills to do the job."

Well, now we know, that's exactly the problem! With greater opportunity to get their way than any lefty has had since 1963, Obama and company screwed the pooch. No, things are not going well for the voices of reason yet but the immediate danger has been headed off.

It looked like the darkest hour. It looked like the Democrats were shrewd, devilish political manipulators who were going to get there way. It looked like the Republicans were going to be destroyed by a bunch of lily-livered establishment politicians who'd "compromise" their way to total destruction of their party. And then the whole thing fell apart. For a change it was the Democrats who were the stupid party/ And it turns out that the irrational idiots were not establishment Republicans but establishment Democrats who were unable to stomach any spending cuts at all.

As I say, we go right back to it next morning and there will be losses ahead but this was the dark night. This was the night where we all went yo bead expecting to see Saint Paul's bombed by the blitz only to wake up and find it still standing. Things are looking good.

Update: Don't just take my word for it. Here is what one of Obama's biggest fans has to say:
Watching the president operate with a kind of political leverage he won't soon again enjoy has not been a very encouraging experience.
Never before has so much adulation been heaped on and ope in vested in a mediocrity as uninspiring as Obama. And look out, progressives are not prudent people. As it becomes clearer and clearer that their fantasies aren't coming true (again!), you can be sure that some of them will turn to violence. They always have before.

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