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Tuesday, January 22, 2008

"It's the Economy, Stupid!"

Well, the economy must really be set to tank if the Fed is willing to cut rates by 3/4 of percentage points in the face of higher inflation and a sagging dollar. We truly are in a "damned if you do, damned if you don't" situation, thanks to conservative economic policy.

As November approaches, look for the economy to eclipse Iraq and every other issue. I'm not sure if this will help or harm the Democrats, given the ability of the right-wing noise machine to always create a narrative that blames Dems and "librals" for all the world's ills.

Early prediction: should Hillary win the Democratic palm, she will get pounded on NAFTA, or SHAFTA as it has come to be known. It doesn't matter that she's not responsible for it and most Republicans also supported it. Bill pushed it through, and she will be considered guilty by association.

Update 9:45 AM: Investors seem to think the Fed's move is a sign of desperation: The Dow and Nasdaq both plunged at the open.

4 Comments:

At 11:32 AM, Blogger tenaciousmcd said...

Paul, as of 11:30 EST the markets seem to have recovered somewhat. They might even make it back into the black given the trend line. But on a volatile day like this it's hard to know. Maybe Bernanke had an effect, or maybe not.

Either way, a bad economy will be manna for any Dem nominee, maybe Hillary more than anyone. (This may be her salvation if she's the nominee.) The GOP candidates just can't speak credibly on that issue AT ALL. They've all effectively taken a "Bush +" position: tax cuts, tax cuts, tax cuts, etc. The only one who seems to have any knowledge of economics is Romney and he's been pandering so relentlessly to the hard right that he can't possibly make it back to dry land, especially if this nomination mess drags on. McCain might have had some cred back in the day, but he's completely sold out on this issue over the last three years.

 
At 2:27 PM, Blogger WilsonDeGreat said...

I cannot believe I read a blog where NAFTA goes by the alias "SHAFTA" and the author isn't being ironic

 
At 3:30 PM, Blogger Paul said...

Not sure how to read da Great One's comment -- is it written on the assumption that I personally think NAFTA should go by the name of SHAFTA? If so, I assure you, I don't. I thought the end of paragraph 2 (right-wing noise machine) would make it clear that in segueing to NAFTA/SHAFTA in paragraph 3 it was clear I consider blaming "SHAFTA" solely on the Clintons a product of the right-wing noise machine. And unlike the Tenacious One, I believe they can get some traction in blaming the economy on the Democrats, and particularly Hillary. After all, they will remind us, the economy only began to tank when the Democrats took control of the House and Senate! By the by, if you think the MSM can't sell a fictitious pile of shit to the American public, then evidently you haven't noticed the narrative on "the surge" as of late.

As for the stock market, I see that at 3:15 PM the Dow is off a mere 1% and the Nasdaq 2%. Sure it's pared the losses of 4-5% from the first 15 minutes, but these losses (so far) are on the same day that a very rare 3/4 interest rate cut was announced, the sole purpose of which was to rally the stock market (and which in the past worked). Not exactly a vote of confidence in the Fed. Maybe investors have finally figured out that an economy that expanded on the back of bad loans has to come to an end at some point and that an interest rate cut just kicks the can of pain further down the road where it will become a barrel.

 
At 5:25 PM, Blogger WilsonDeGreat said...

I'm sorry I was just being flip because I laughed at the term "SHAFTA". I thought it was an aside unrelated to the politics of it, but now I see what you mean.

 

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