2010-06-04

A brief political outlook for 2010 and beyond

In yesterday's post on how the market is running purely on money printing, I mentioned the political factor with respect to bailouts. I was thinking of writing that the Republicans could be on the way to a Depression style victory, with right-wingers taking control of the government New Deal style. It seemed unlikely though, because Republicans controlled the government (barely, because they were relying on moderate Senators) from 2000-2006 and also because it seemed that socialism is rising. However, it's possible that in fact the Reagan conservatism made a double-top with the victory in 1994. If you know your history, you know that the groundwork for the 1994 victory was laid in the early 1980s. By 1998, there were very few conservative policies remaining and George Bush the Younger governed as a center-left President.

What I am sure of is that politics will move away from the center, but I think we're in the zone of chance. Democrats took over in 1932 because Republicans were in charge. I don't know when the break will come for the public, but when it does, whoever is in power will not be in power for a long-time thereafter. In this regard, the culling of incumbents is crucial because it will allow either party to claim to be fresh blood. The party out of power, or if power is split, the party with the fewest incumbents up for re-election will be the winner.

Below is a good clip with Bob Janjuah that reminded me of the political questions.











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