November 6, 2008
November 5 (the day after Election Day) left us with a nearly breathless Chris Matthews on MSNBC’s Hardball. His guests included their correspondent, David Schuster, who had attended the election night speech by Barack Obama in Chicago’s Grant Park. Schuster described the scene in Grant Park, immediately after the west coast results were announced at 11:00 p.m. (Eastern Time). Strangers were hugging each other and crying. This could have only happened in Chicago. I had been in Grant Park on several occasions to celebrate many a Bulls championship, back in the day when Phil Jackson was coach and Michael Jordan defied the laws of gravity. The post-championship celebration in Grant Park became a rite of summer: the weather was just getting nice and Fourth of July was right around the corner. I still return to Grant Park for the annual Independence Day fireworks show (that actually takes place on July 3) even though I now live a long way from there. The consensual spirit of Chicago’s people brings life to the theories expressed by Carl Jung. Myth, archetype and symbol hold important places in the collective soul of that community.
Chicago has its own approach to politics, as well. The city’s history is rich with tales of “back alley” politics, giving rise to legendary figures and laying waste to contenders. As a result, I can’t keep my mind off the subject of what might be in store for Senator Joe “The Tool” Lieberman of Connecticut. The remark by Stephen Colbert during Indecision 2008 on Comedy Central, caught my attention. After the announcement that Obama had won 64 percent of the vote in Connecticut, compared to McCain’s 35 percent, despite McCain’s unfailing support from The Tool, Colbert wondered: “Where could the people of Connecticut have learned such disloyal behavior?” As you may recall: Lieberman was re-elected to the Senate in 2006 as an Independent candidate (after having lost the Democratic primary to Ned Lamot). Although they were irked by The Tool’s mercenary act to preserve his own political skin, the Democrats struggled to keep Joe in their “Big Tent”. The Senate Democratic Caucus (or Conference) currently consists of 49 regular Democrats and 2 Independents, one of whom is Joe “The Tool” Lieberman, who calls himself an “Independent Democrat”. Prior to the 2008 election, the Democrats had been desperate to maintain their 51-percent majority in the Senate, so they did all they could to make sure The Tool was a happy camper. All that changed when Barack Obama became the presumptive Democratic Presidential nominee. Many commentators saw in Obama, not only a winner, but one with long enough coattails to bring more Democrats into the Senate. The Tool realized that his betrayal of the Democrats could result in the loss of his many important appointments, should Obama get elected. He had already “sold his soul” to Bush, Cheney and Rove in his quest for re-election. At that point, he had no choice but to “go for broke” by endorsing John McCain. However, The Tool went beyond that. He spoke ill of Obama at the Republican Convention. He followed McCain around throughout the Presidential campaign, giving rally speeches himself, in addition to serving as McCain’s “nodder” when McCain would question Obama’s patriotism.
It is now time for the Senate Democrats to throw The Tool under The Trash Talk Express, before it departs for that great bus barn in the sky. It has been widely reported that The Tool is scheduled to meet with Senate Majority Leader Harry Reid, at some point this week. My familiarity with Chicago politics leads me to believe that on his way to this meeting, The Tool will be alone in a dark alley. He will reach a spot alongside a blue dumpster and that will be the signal. Suddenly, Democratic Senators will step out from their positions, in the shadows, to surround him. The Tool will be cut … and he will be cut quite thoroughly. He will be cut from the Senate Committee on Small Business and Entrepreneurship. He will be cut from the Senate Committee on Homeland Security and Governmental Affairs (where he is Chairman). He will be cut from the Senate Armed Services Committee. He will be cut from the Senate Committee on Environment and Public Works, including its Subcommittees on: Clean Air and Nuclear Safety, Private Sector and Consumer Solutions to Global Warming and Wildlife Protection (where he is Chairman). He will also be cut from the Subcommittee on Public Sector Solutions to Global Warming, Oversight, and Children’s Health Protection. He will be left, writhing on the back bench of the Senate. “Backbenchers” have no influence to peddle … or, perhaps I should say: They have difficulty raising campaign contributions.
The Tool assumed that by joining himself to McCain’s hip, he could secure the Vice-Presidential nomination or a high-level Cabinet appointment. This must have appeared as his only route to avoid obscurity. It didn’t work.
The Tool now has a “date with destiny” somewhere in a dark alley . . .
No Consensus About the Future
As the election year progresses, we are exposed to wildly diverging predictions about the future of the American economy. The Democrats are telling us that in President Obama’s capable hands, the American economy keeps improving every day – despite the constant efforts by Congressional Republicans to derail the Recovery Express. On the other hand, the Republicans keep warning us that a second Obama term could crush the American economy with unrestrained spending on entitlement programs. Meanwhile, in (what should be) the more sober arena of serious economics, there is a wide spectrum of expectations, motivated by concerns other than partisan politics. Underlying all of these debates is a simple question: How can one predict the future of the economy without an accurate understanding of what is happening in the present? Before asking about where we are headed, it might be a good idea to get a grip on where we are now. Nevertheless, exclusive fixation on past and present conditions can allow future developments to sneak up on us, if we are not watching.
Those who anticipate a less resilient economy consistently emphasize that the “rose-colored glasses crowd” has been basing its expectations on a review of lagging and concurrent economic indicators rather than an analysis of leading economic indicators. One of the most prominent economists to emphasize this distinction is John Hussman of the Hussman Funds. Hussman’s most recent Weekly Market Comment contains what has become a weekly reminder of the flawed analysis used by the optimists:
Hussman’s kindred spirit, Lakshman Achuthan of the Economic Cycle Research Institute (ECRI), has been criticized for the predictiction he made last September that the United States would fall back into recession. Nevertheless, the ECRI reaffirmed that position on March 15 with a website posting entitled, “Why Our Recession Call Stands”. Again, note the emphasis on leading economic indicators – rather than concurrent and lagging economic indicators:
Unlike the partisan political rhetoric about the economy, prognostication expressed by economists can be a bit more subtle. In fact, many of the recent, upbeat commentaries have quite restrained and cautious. Consider this piece from The Economist:
A great deal of enthusiastic commentary was published in reaction to the results from the recent round of bank stress tests, released by the Federal Reserve. The stress test results revealed that 15 of the 19 banks tested could survive a stress scenario which included a peak unemployment rate of 13 percent, a 50 percent drop in equity prices, and a 21 percent decline in housing prices. Time magazine published an important article on the Fed’s stress test results. It was written by a gentleman named Christopher Matthews, who used to write for Forbes and the Financial Times. (He is a bit younger than the host of Hardball.) In a surprising departure from traditional, “mainstream media propaganda”, Mr. Matthews demonstrated a unique ability to look “behind the curtain” to give his readers a better idea of where we are now:
When mainstream publications such as Time and Bloomberg News present reasoned analysis about the economy, it should serve as reminder to political bloviators that the only audience for the partisan rhetoric consists of “low-information voters”. The old paradigm – based on
campaign fundingpayola from lobbyists combined with support from low-information voters – is being challenged by what Marshall McLuhan called “the electronic information environment”. Let’s hope that sane economic policy prevails.