ORIGINAL POST “BELOW THE FOLD”
It turns out that one of my presumptions has been incorrect: the death of “paygo,” we can start to make sense of the writing on the wall:
- The Blue Dogs as a faction were either insincere while campaigning, or else do not have the power that I had hoped — this coupled with their existing only in the House, when it looks like the Dems will be able to more-or-less run the Senate. The “budget straightjacket” (see link, above) comment indicates that the Blue Dogs will be indistinguishable from the rest of their party.
- Rahm Emmanuel was not hired in order to aid the President-elect in charting a moderate policy, but rather because he’s tough, knows the ropes, and is loyal. This means one should expect an extremely aggressive set of moves by Obama in the first six-ten months, and that Democratic Overreach is a very real likelihood, depending on how well the coastal media, which jettisoned even the pretense of objectivity in the past ten months, is able to provide support and cover.
- Whether this is an openly Marxist agenda, or merely the sort of Hyde-Park chicago liberal style that Diane Rehm would find to be cautious and moderate, remains to be seen. However, recent suggestions that Congress’ next fight, in conjunction with executive orders, will be to repeal recent opening in oil production, will guarantee that energy prices return to early-2008 levels. Unlike the Bush administration, this will also involve beating up on coal. Meaning that energy spikes will be reflected in electric as well as transportation costs.
- This, one must remember, also has a great deal to do with the value of US currency. Since Congress’ solution to “spend spend spend” will inevitably involve further currency weakening, $4, or even $7 gasoline is a distinct possibility.
- The Republicans will fight this in Congress — whether they go down in flames and use this as a hammer to beat on the Democrats in the hopes of repeating 2004, or whether they’re so snowed under that they become functionally irrelevant, is anybody’s guess.
- Democrat reluctance to grant Colombia a free-trade package (which is longstanding, since the Democrats generally favor the marxist Chavez and Morales regimes, will mean that much of the progress in creating a middle class in South America will be seriously endangered.
- The Silver Lining: Under the circumstances above, inflation will be a threat while growth is in the toilet, and a Japan-style economic situation looks likely. The Fed will not dare to jack interest rates under those conditions. Inflation is a good time to get out of debt, so those who can stay employed will find this a very, very good time to tighten their belts and kill off revolving and mortgage debt.
It is possible that McCain will pull it out — but I”m not planning on it. The electoral map is simply too miserable for McCain, who’s playing defense in all the areas he should be able to ignore. Possibly Murtha will single-handedly win the election for him by delivering PA while simultaneously pissing off NC, VA, and CO.
(Seriously: judging by both RCP and Pollster, McCain could pick up every tossup state, and every Dem-leaning state, and still go down in flames at this point.)
Here are my sage, prophet-like predictions for 2009-2011. You can hold me to these, and mock me later.
- 1. We *will* have a foreign crisis, and Obama will initially be too slow to react, and then follow up with enough force that it disillusions significant chunks of his base voters. Certainty: 35%, b/c falling gas prices weaken the hands of most of our enemies.
2. Obama has overpromised, and will under-deliver the progressive red meat, b/c the blue dog democrats will limit the degree to which true new tax policies are able to be passed. Tax hikes WILL happen, but to nowhere near the degree that Frank & Co. prefer. Certainty: 95% — some supposed Blue Dogs, like Chet Edwards, are actually close Pelosi allies on the down-low … I don’t have enough data to predict how many will fall into this category post-election
3. Interest rates are low, and will stay there for the forseeable future, as the Obama administration’s only other way to make things happen will be a Greenspan-like print bonanza… but without daring to be able to jack rates due to economically moderate-weak numbers. Certainty: 100%
4. #3 will be due to Pelosi, Reid, etcetera, overplaying their hand and facing a Blue Dog backlash, as notable chunks of their own party realize that they’re facing a ’94 rerun in 2010. Certainty: 100%
5. Comedians will be rehashing old Dan Quayle jokes and using them on Biden by the end of 2009, as it becomes less and less possible to get Mr. Gaffe-omatic out of the limelight. Certainty: 1 billion %.
6. Obama being relatively indecisive by nature, will defend himself against charges of inaction by consistently passing the ball to Congress, using it as his foil. Certainty: 100%.
Thus, given that Obama will continue to receive favorable media coverage, and suffers somewhat from Kerry-like indecision, he will generally be viewed as having governed pragmatically, and the degree to which he blows it on any key issues will be largely a factor of whether or not he is capable of actually throwing his weight around in the party vis-a-vis Congress. That’s possible given Congress’ pathetic approval rating. If it came down to Obama vs. Pelosi, the media will hurl her under the bus so fast she won’t even have time to scream before the bones start crunching.
Oh. And the dude at Lemurland will recoil in horror as the worst parts of both Greenspan and Bernanke are simultaneously put into play. Certainty: enough that I have held onto my variable-rate mortgage!