There are three distinct camps in America right now. The red jerseys, blue jerseys and those that are fed up with both. Clearly the third camp is tiny and has no way of influencing change so the only way real change is going to come is due to some kind of crisis causing major jersey defections.
Given that Obama won re-election despite:
- One of the most anemic recoveries since the Great Depression
- Sticky and persistent unemployment
- A very unpopular health care legislation
- Polarized and partisan House/Senate/Electorate
- Creeping inflation, high gas prices and stagnant wages.
This suggests that as far as the majority of Americans are concerned, things are not so bad. Truth is, despite the occasional ISM, ADP, Consumer Confidence numbers and elevated stock prices the internal fundamentals are quite rotten. They have been rotten for a long time, but Bernanke's zero interest rate policy and never ending liquidity has allowed the administration to kick the can down the road for quite some time. However kicking the can has its limits and someone will need to pay the piper soon.
So while I have been suggesting that some kind of fiscal calamity would have occurred in 2009, 2010, 2011 and 2012 - it was impossible to determine just how much creativity the central bank and DC would come up with. After many trillions of additional debt and a THIRD round of Q.E. it is quite clear that creativity was kicked up a notch.
However there is a limit to this madness and at some point two options will play out: Either the liquidity will stop and another fierce recession will take over or the liquidity will continue causing inflationary misery upon the public and an eventual uptick in the bond market yields putting massive pressure on our debt servicing costs. The likelihood this will happen in the next four years is very high. Which ever president presides over this calamity will be blamed. Pain or malaise is what lies ahead.
The other undeniable aspect, and one that needs acknowledging is that Mitt Romney was a very poor candidate. While Romney was representing the "opposition" his positions regarding: debt, spending, taxation, foreign policy, health care and entitlement were so poor and so similar to the existing administration that one is forced to wonder whether America is simply so far gone as to always prefer Statism over a free market or simply yearning for a real choice.
While it is impossible to predict what would have happened if Mitt Romney had actually won in the next four years, but one thing is for certain: For those who voted for the lesser of the two evils or wished for a different legitimate candidate you would have waited for at least another eight or twelve years! Because a President Romney would have sought reelection in 2016 and given the high likelihood for a financial calamity would have likely lost to someone Hillary Clinton thus not having a worthy candidate for a very long time.
At this point in time, the wounds are still fresh for those wishing for change or were hopeful for something new and exciting - and you are not going to accept this explanation. I get that. But in four years you are guaranteed to be presented with another choice. For those that spent time and money supporting a poor candidate like Romney this time, learn from your mistakes and choose wisely in four years.
If a recession takes hold in the next four years then Americans would be far more partial to examining the really painful decisions that we should have been looking at now, but decided to forego. Real entitlement reform, real examination of harmful Government policy, real considerations for legitimate spending and an adult conversation regarding debt and deficits.
For those who are celebrating the Obama victory, be mindful that just like the lurch that happened in 2008 after eight years of disastrous Bush policies sent America reeling to one extreme, eight years of Obama could cause the same reaction in 2016.
For the camp that was relegated to voting for a candidate we knew was going to lose, today represents a victory. For the Republicans who are lamenting the loss, do consider the implications of choosing a candidate that represents the status quo - a status quo that must be changed. For the Democrats who are cheering the Obama victory, keep in mind that nothing has been fixed over the past four years and when the pain comes, fairly or not Obama will be held responsible. The next four years are going to be riddled with hardships and extremely difficult decisions.
Hey, at least the drug war is starting to dissipate as local state issues are starting to break down Marijuana barriers. Washington has "legalized" Marijuana, albeit in their limited and dangerous way, Massachusetts joined 17 other states in allowing medicinal Marijuana and Colorado is on the brink. Alabama appears to have embraced the 10th Amendment and passed an initiative directly challenging the individual mandate portion of ACA. Not a bad night after all!
Stay vigilant my friends.