Wednesday, November 05, 2008

American Tune Changes - A History

The British at their surrender in Yorktown, played a tune called "The World Turned Upside Down". It happens sometimes. It happened in America this year. As one of the losing side in this perpetual argument we call a nation, I can sulk, or I can try to find some nuggets in this wreck of government that was never ideal to start with. I'll be looking for some nuggets to share with you over time. Meanwhile, I am presenting here an recent historical analysis of critical points leading up to the upside down world. The New American Tune (listen here)

Lyndon Johnson comes to a torn America and promises to heal it with a "Great Society" in a time when he also needed to prove he was boss on the world stage. So he added Vietnam to his agenda. Feeding money and lives into these two meat grinders left him damaged and weak. Nixon was the answer.

Nixon pursued Vietnam with a vengeance and brought it to an end with a token of honor. He opened a new front to save the environment. Money flowed freely. He was the most popular president ever. Then, his loyalty to staff got in the way of his legal obligations. His political enemies who had not yet realized their "Great Society" struck hard. America's media found itself with new power and soon destroyed any memory of Nixon's superb legacy. Ford was the result and without enough time to brand himself, a wave of emotion over the media invention of an evil Nixon (who was pardoned by Ford) led us to Carter.

It was a narrow win for Carter. Ford nearly regained the lead by election day because the public was beginning to see how flawed Carter really was. But it was too late. Enter Carter. In four years, he managed to open the gates to hell in Iran leaving the middle-east an open sore for the next 30 years (and counting). A failed energy policy and trade dynamics left the nation with inflation and a "misery index". Carter was morose. He blamed Americans - not policy.
It was one of those rare times in politics, "A PERFECT STORM". Reagan rode to the rescue with a positive message of free market capitalism and low taxes. This generated a huge surge in business and jobs and tax revenue to the government. The lingering "Cold War" with the USSR was draining world resources from better use and now Reagan saw an opportunity to bring it to a close. But vision for long-term value required up front cash for a big navy and some high tech space technology. The plan worked but the huge tax revenues from the era were not enough to overcome the deficit spending for the "Cold War" endgame.

This brought us to Bush 41 who began to pare down the military spending and to bring the deficit under control. It was working. There was an economic hit from reduced military industrial complex spending, the result being a mild recession following his Desert Storm expidetion. Given Bush 41's weakness with public image and his ill thought out alliance with Democrats to add a small tax increase - he was vulnerable.
Enter the one man who set up the nation for the Upside-Down-World that occurred in November of 2008. Ross Perot. This third party candidate ran in the two campaigns that followed and drew off enough votes from Bush41 and later, Dole - to hand over the presidency and eight years of blithe progress to Bill Clinton.

Clinton was able to ride the continuing Reagan wave of economic growth with little effort. He could add some social programs and managed to avoid any costly military expenditure or adventures. Things were so good, he could even raise taxes without much harm to the economy and still have high government revenue. A surplus was projected five years out. But there was a bubble of technology businesses that over-reached and fell to earth in Clinton's last six months. This would take the projected surplus to a projected deficit of huge proportions in the next five years. The superior image machine of the Democrats never allowed this fact to have an shelf-life.

With a busted tech bubble and crying investors, Bush 43 was able to wrest the ticket and win the 2000 election. Immediately taxes were cut and the economy was clawing its way back with prosperity for America and the world looking better every day. The tech crash deficit projection was turned around and a surplus was easy to imagine in only a few years. Then the world stopped on September 11, 2001.

It turns out Bush 43 had great economic plans for domestic growth and business that would lead to prosperity for everyone from top to bottom. He was not a great speaker but he was folksy. And he was loyal to his team. People accepted his leadership to take the nation to war against terror. He focused on that. While he achieved a number of domestic initiatives and foreign policy initiatives that were remarkable, he never publicized them. The Bush 43 image and the Republican image were never considered important to the task at hand.

His flaws began to wear on him and his party by late in term one. His loyalty led him to keep Rumsfield in charge of Defense after huge mistakes were made in the consolidation of Iraq. He should have been gone a year before the second term. He left his party hanging with no viable "president in training" by keeping Cheney as VP for the second term. Cheney could have been eased out and used as an adviser without the VP office. This campaign season began with nobody warmed up in the bullpen and with Iraq still hot.

From the time of Carter - the housing initiatives for the poor were building in size and scope. It was a Democrat domain - their strong suit - a social issue.

Corruption among Democrats and high finance and the Federal Mortgage giants Fannie and Freddie built up over time and led to massive sums of money at risk - and guaranteed by the taxpayers. It was like free money, but it was considered private investment. Meanwhile Bush 43 was encouraging government spending too. Both private and government spending were salvaging the mess of 9/11 and fortunes were made at the levels of high finance. A combination of things led to some mortgages failing in 2007. This was the crack in the dam. You know the rest of the story.

The Republicans who were no longer in control of congress and for whom congress had been already a paper thin margin earlier in the Bush 43 administration - were incompetent with explanations of how the economic disaster occurred. It was an easy task for the Democrats to deflect all attention to a failure of Bush 43 who presented his case poorly and used the most un-telegenic bureaucrats in history to make the case for him. Democrats understand the importance of Image. Rarely is this the case of the Republicans.

Image was everything in this election. McCain is a marginally better communicator than Bush 43. He could not get over the hump of "defending tax cuts"when people were watching the (mostly Democrat - strange but true) high finance officers from Wall Street walk away with billions in bonuses while taxpayers foot the bill for their failures. Meanwhile the Democrats again have successfully convinced enough uneducated voters that higher taxes will cure the problem - along with government jobs for those who want a job. McCain's Joe the Plumber came as close to explaining the issue for the public but even so - the whole image machine for McCain and the Republicans failed to connect with the people (the people that counted).

Obama had plenty of obstacles to overcome. This blog and hundreds more make it pretty clear that he is loaded with issues that will affect his administration in a negative way and will in many cases be very harmful for America. But if perception is what counts - he has certainly created one for a large segment of eager believers.

The nation is now is a difficult time. The choice was between free market capitalism under a low tax burden to generate a stream of tax revenue that serves the people or regulated capitalism that taxes achievement dearly at the expense of private jobs so that more government jobs can be supported. Add to that a redistribution of worldwide energy resources (cap and trade CO2) designed to hobble America's industry and allow emerging nations to compete with lower energy costs. I feel sure the people who most supported Obama will be the people who are hurt the most. Their jobs and their hope for a better life will be delayed. I am guessing 16 years - about the time it took to work through the Roosevelt-Truman years. And "peace" presidents are historically noted for "war" inititation which puts a lot of people back to work very quickly.

America is now in the hands of the Left-Wing Democrats who earned their stripes in the 1960's. They remain trapped in a social dogma that has already been tested in Europe and elsewhere and failed. But they insist they must carry that worn banner forward. They now control all of congress and their puppet president. America is theirs to lose. When they do, I am sure they will successfully blame the Republicans.
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