Tuesday, September 21, 2010

Perils of Power Exchange

NOvember 2 is approaching and I fear a political disaster. Though I am hopeful that the Obama agenda will be stopped in its tracks my fear is predicated on the idea that conservatism could end up being a victim of its own success if Congress changes hands for these reasons:

1) Suppose conservatives do take control and the markets respond positively with a party with a mandate for fiscal discipline. Once confidence is re-established locked up funds begin to release into the economy and we begin to see improvement up until 2012.

2) There is the illusion that the President somehow is responsible for creating jobs. Nothing could be further from the truth. Congress has more to do with that than the executive branch. The boom of the nineties happened when Republicans took power. This current collapse began when Democrats took it back.

Now Presidents can have an influence in the private economy through executive regulation and he can effect it, as is happening now, by inflicting a fear of uncertainty through amateurish stewardship where businesses hold onto capital not knowing what the government will do next.

3) Given this, if Republicans are successful and the economy comes back then Obama will claim we are starting to see the effects of his policies. The media will propagate this illusion.

4) Phase two of the battle between TEA Party conservatives and established moderate/liberal Republicans could heat up and split the ticket. In the same way Ross Perot handed the Presidency to Clinton, elected by a minority of 41%, Obama could likewise get a second term.

5) Hopefully Hillary will cause a similar rupture in the Democrat Party between liberals and progressives.

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