That message then looked at some more sane and rational analysis from Warren Buffet and Jyske Bank.
Yet one interesting prediction that Pravda Online quoted Saxo on that does make some sense, was that Ron Paul will be President.
This is a nice thought…I wish, but doubt. Perhaps four years off the mark. However, I believe there is a basis for thinking this way. Alan Greenspan summed that basis up in his book, “Age of Turbulence…a must read by the way.
He wrote about the increase of partisan politics in America and wrote: “The political chasm has gone beyond the titillation of political pundits. Governance has become dangerously dysfunctional.”
Greenspan wrote in his book about the Civil Rights Act of 1964 and how this shifted the Democratic dominance in the south. He then went on to write:
“The four congressional caucuses, two in each body, have shifted dramatically over the years. Each caucus, two Republican, two Democratic, used to comprise liberals, moderates and conservatives. To be sure the proportions differed by party, but there was rarely enough cohesion to produce overwhelming majorities for any piece of legislation in any of the four caucuses. Votes on legislation typically would be Democrats 60 percent and 40 per cent against, and Republicans 40 per cent for and 60 percent against, or vice versa.
“Today’s congressional caucuses reflecting the reorientation of party affiliations in the south have become either predominantly liberal (the Democrats) or conservative (the Republicans). Accordingly, legislation that used to split party votes 60 per cent to 40 per cent is now more likely to be 95 per cent to 5 per cent. Legislation has consequently become highly partisan.
“One could argue that over our long history there’s never been any love lost between liberals and conservatives. But people did not run under the banner of a “Conservative Party” or a “Liberal Party.” The mechanisms of governing-committee assignments and leadership posts-were Democratic or Republican, and party power held sway. The eventual dominance of Republicans in southern states brought the two major parties to a numerical parity but in the process, induced an ideological divide between conservative Republicans and liberal Democrats. It has left a vast unattended center from which a viable, well financed independent presidential candidate could conceivably emerge in 2008 or, if not then in 2012.”
This view can lead us to some vital long term economic thinking.
Greenspan’s book is mainly about economics, but government is a non detachable part of economics…driven long term by economics but distorting economics in the short term. This partisan division has grown…whipsawing American economics every eight years…liberal….conservative….liberal….conservative. These swings create distortions which to date have been smoothed out in part by flooding the economy with liquidity.
This liquidity became so excessive that the market had to seek increasingly less attractive sub prime borrowers.
In short the sub prime loan crisis is due in part to this partisan divide.
As with all distortions, reality will eventually set in. Some political leader will unite the vast but currently unattended center of politics. This could help return fiscal sanity to US government spending and strengthen equilibrium in global currency markets.
Ron Paul’s success suggests that this process may have begun. Paul has a huge challenge and I doubt he’ll make it by this election. However his run will not have been in vain. Others seeing his attractiveness will adapt and hopefully lead the economy back towards balance.
The world will need this because the 2012 election will be about baby boomers and their retirement. If we are worried about deficit spending now…the saying “you ain’t seen nothing yet” will then apply.
Until next message, may divisions in your life be few and balance a lot.
Join Merri and me in Sunny Ecuador this winter at our colonial inn, Meson de las Flores . Here it is.
Here are two friends from Canada at Meson.
Enjoy the beauty of the countryside near us.
Feb. 18-23 Ecuador Import Export Course
Enjoy shopping for wonderful crafts markets and meet the wonderful friendly people of the Andes .
Enjoy Ecuador ’s empty beaches.
If you attend all three courses separately the fees are $1,847. Sign up for all three at only $1,499 here. Save $348. Three course savings.
Three courses for two separately are $2,597. Two on our three course adventure is only $1,999. Save $598. Three courses savings for two.