Economic Bipolarity

While I'm not really into politics (except in the context of shifting social moods), Ben Bittrolff, publisher of The Financial Ninja blog (one of my regular must-reads), features an eye-catching graphic in a post entitled, "Politics Before and After a Crash, Depression," that gives us plenty of food for thought:

What are the odds of a repeat EXACTLY like this 1929 - 1932 flip?

Obama for the win! Landslide?

Comments

[No way]

FDR ran on a platform of a 25% reduction in the federal budget, a reduction in federal power and scope, and free trade.

0bama is running on the opposite platform. $4.3 T in new spending, protectionism, and higher taxes.

It will be a close race.

If he wins, he will become the most hated President ever, even more than Bush, and I am not simply projecting my feelings onto that of the electorate.

[Gregory Sills]

The S&P 500’s bear market of 1973-74 is gaining in historical curiosity, so let's use it as one book-end in seeking insight from 1973-1982, which was the worst economic era between the Great Depression and today’s Debt Unwind Crisis.
Jan 1973-Aug 1982 = Economic Instability = 4 Presidents in 9 years
Aug 1982-Aug 2008 = Economic Stability = 4 Presidents in 26 years
Insight: No Political Stability Without Economic Stability.

The Economically Unstable Era of Jan 1973-Aug 1982 featured, economically:
2 Doses of energy shortages & price spikes: 73-74 & 1979
3 Separate Recessions: 73-75 & 79-80 & 81-82
Double-digit price inflation
Double digit salary/wage inflation
Double-digit interest rates w/mortgages hitting 19% for prime borrowers
Double-digit unemployment, on and off
Destruction of the manufacturing base in the Rust Belt
Mass migration of blue-collar workers (& voters) to, and the Rise of, the SunBelt
A bout of stagflation
Bailout of Chrysler Motor Corp.
Mini 'Bear Market' from Jan 1973 to Dec 1974
Was part of a 16-yr Macro 'Bear Market' from 1966 to Aug1982

Today’s evolving laundry list of economic challenges from March 2008, thru 2009 and far beyond, will be equally Breathtaking in its Scope & Scale & Diversity, but sadly, neither identical nor similar in sequencing. Sorry, no textbook provided.

Forecast for 2008-2012:
Expect Obama or McCain to be a 1-termer as the nation’s impatient & ‘quick-gratification addicted’ voters, many of whom also function as if financially illiterate, lurch from one political Savior-Figure to another to another. These voters suffer an inability to distinguish in advance between promising or doomed economic policies.
Expect fierce campaigning to commence a mere 11 months from now for the 2010 mid-terms, and for Congress to behave as a herd of 525 'agenda-cized' cats.
Expect America’s economically battered voters to lose tolerance for political travails that are normally ‘forgiven’ or 'tolerated’ in better economic times when voters' are drinking all the $-spiked punch (e.g. Clinton’s Lewinsky scandal in 1998 during the stock & tech bubble; the 'slow-mo' exposure of Bush’s WMD deception in 2004-06 during the housing & credit bubble; Reagan’s Iran-Contra weapons scandal in the late 80s during the 80’s boom). Compare all to Nixon & Watergate in 1973-74 and his struggle with failed wage & price controls, inflation, job loss, and gas lines and rationing, during the onset of the 9-year Economic Crisis of 73-82.
Insight: No Political Stability Without Economic Stability.

[bipolar2]

. . . no, you're simply indulging in wishful thinking. You're wasting your key strokes.

** Obama's probability of a win, 96% on 1 Nov.

Projected winner: Obama takes all with at least 344/538 Electoral College votes on 11/01/2008. That is 74 more than the minimum necessary 270/538.

National polls showing percentages are meaningless. Only state polls matter --

Estimates of Electoral College votes don’t show the kind of dramatic swings that make for breathless faux news. What to do? Go to these sites. They show outcomes from statistical models. If the election were held today, Obama would win. In a landslide.

http://www.fivethirtyeight.com where on 11/01/2008: estimated 344 electoral votes for Obama. With a win being at 96% probability.

http://election.princeton.edu/history-of-electoral-votes-for-obama/ where on 11/01/2008: estimated 364 electoral votes for Obama. (Obama declared winner-of-the-day ever since mid-June.)

[No way]

The statistical models are all based on polls. And the models reflect the poll-ballot relationship from prior elections as well as 2008 registration patterns. But these models do not account for phenomena such as the fact that my wife and I both registered Dem so that we could vote for Hitlery, not because we have any love of the Democratic message.

Why didn't we just call off the election in June if it was decided back then?