Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Life Sciences Biotech Smaller Cap High Risk Stocks Investing Binge - 24th Jun 21
Central Banks to Keep Buying Gold - 24th Jun 21
Will Gold Survive Hawkish Fed? - 24th Jun 21
The Clean Energy Compound That Could Change The World - 24th Jun 21
Everybody's Getting Rich (and Having Fun) Except Me - 24th Jun 21
WESTERN DIGITAL WDC Stock Trend Analysis - CHIA! - Risk 1 - 23rd Jun 21
AMC Is the Best-Performing Stock in America: Don’t Buy It - 23rd Jun 21
Stock Market Calling the Fed‘s Bluff - 23rd Jun 21
Could Bitcoin Price CRASH Target A Bottom Below $7500? - 23rd Jun 21
Bitcoin and cryptos: Your 'long-term investment'? - 23rd Jun 21
Unlocking The Next Stage Of The Hydrogen Boom - 23rd Jun 21
USDT Ponzi Scheme FINAL WARNING To EXIT Before Tether Collapses Crypto Exchange Markets - 22nd Jun 21
Stock Market Correction Starting - 22nd Jun 21
This Green SuperFuel Could Change Everything For the $14 Trillion Shipping Industry - 22nd Jun 21
Virgin Media Fibre Broadband Installation - What to Expect, Quality of Wiring, Service etc. - 21st Jun 21
Feel the Inflationary Heartbeat - 21st Jun 21
The Green Superfuel That Could Disrupt Global Energy Markers - 21st Jun 21
How Binance SCAMs Crypto Traders with UP DOWN Coins, Futures, Options and Leverage - Don't Get Bogdanoffed! - 20th Jun 21
Smart Money Accumulating Physical Silver Ahead Of New Basel III Regulations And Price Explosion To $44 - 20th Jun 21
Rambling Fed Triggers Gold/Silver Correction: Are Investors Being Duped? - 20th Jun 21
Gold: The Fed Wreaked Havoc on the Precious Metals - 20th Jun 21
Investing in the Tulip Crypto Mania 2021 - 19th Jun 21
Here’s Why Historic US Housing Market Boom Can Continue - 19th Jun 21
Cryptos: What the "Bizarre" World of Non-Fungible Tokens May Be Signaling - 19th Jun 21
Hyperinflationary Expectations: Reflections on Cryptocurrency and the Markets - 19th Jun 21
Gold Prices Investors beat Central Banks and Jewelry, as having the most Impact - 18th Jun 21
Has the Dust Settled After Fed Day? Not Just Yet - 18th Jun 21
Gold Asks: Will the Economic Boom Continue? - 18th Jun 21
STABLE COINS PONZI Crypto SCAM WARNING! Iron Titan CRASH to ZERO! Exit USDT While You Can! - 18th Jun 21
FOMC Surprise Takeaways - 18th Jun 21
Youtube Upload Stuck at 0% QUICK FIXES Solutions Tutorial - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations Video - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction - 17th Jun 21
Stocks, Gold, Silver Markets Inflation Tipping Point - 17th Jun 21
Letting Yourself Relax with Activities That You Might Not Have Considered - 17th Jun 21
RAMPANT MONEY PRINTING INFLATION BIG PICTURE! - 16th Jun 21
The Federal Reserve and Inflation - 16th Jun 21
Inflation Soars 5%! Will Gold Skyrocket? - 16th Jun 21
Stock Market Sentiment Speaks: Inflation Is For Fools - 16th Jun 21
Four News Events That Could Drive Gold Bullion Demand - 16th Jun 21
5 ways that crypto is changing the face of online casinos - 16th Jun 21
Transitory Inflation Debate - 15th Jun 21
USDX: The Cleanest Shirt Among the Dirty Laundry - 15th Jun 21
Inflation and Stock Market SPX Record Highs. PPI, FOMC Meeting in Focus - 15th Jun 21
Stock Market SPX 4310 Right Around the Corner! - 15th Jun 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gaming the US Elections - Analysis of The Lame Duck President

Politics / US Politics Jul 27, 2007 - 01:13 AM GMT

By: John_Mauldin

Politics This week in Outside the Box good friend George Friedman of Stratfor delves into that enigma that is Executive power and Presidential elections. George ventures to assess the current President in light of former Presidents, utilizing a methodical rubric of measure to analyze the capabilities of what in all perceptions is a lame duck President with respect to domestic influence and foreign perception. He also analyzed the presidential race. I found this a very interesting piece.


George's company Stratfor provides some insightful and comprehensive research on geopolitical events and global affairs. George continues to kindly provide my readers a discount to his normal subscription rates, obtained by clicking here .

I hope you find the article informative, providing a degree of inference into the current complex political landscape.

John Mauldin, Editor

Gaming the U.S. Elections
By George Friedman

Domestic politics in most countries normally are of little interest geopolitically. On the whole this is true of the United States as well. Most political debates are more operatic than meaningful, most political actors are interchangeable and the distinctions between candidates rarely make a difference. The policies they advocate are so transformed by Congress and the Supreme Court -- the checks and balances the Founding Fathers liked so much, coupled with federalism -- that the president rarely decides anything.

That is not how the world perceives the role, however. In spite of evidence to the contrary, the president of the United States is perceived as the ultimate "decider," someone whose power determines the course of action of the world's strongest nation. Therefore, when presidents weaken, the behavior of foreign powers tends to shift, and when elections approach, their behavior shifts even more. The expectation of change on the burning issue of Iraq is based on the misperception that the American presidency is inherently powerful or that presidents shape the consensus rather than react to it.

The inability of Congress to make any decisive move on Iraq demonstrates that immobility isn't built only into the presidency. The two houses of Congress are designed to be gridlocked. Moreover, the congressional indecision reveals that behind all of the arias being sung, there is a basic consensus on Iraq: the United States should not have gone into Iraq and now that it is there, it should leave. There is more to it than that, though. The real consensus is that the United States should not simply leave, but rather do it in such a way that it retains the benefits of staying without actually having to be there. To sum up the contradiction, all of the players on the stage want to have their cake and eat it, too. We are only being a trifle ironic. When all is said and done, that is the policy the system has generated.

The United States has been in roughly this same position with the same policy since World War II. The first time was in 1952 in Korea, when the war was at a stalemate, the initial rationale for it forgotten and Harry Truman's popularity about the same as President George W. Bush's is now. The second time was in 1968, when any hope of success in the Vietnam War appeared to be slipping away and Lyndon Johnson's presidency collapsed.

In both cases, the new president followed the logic of the popular consensus, regardless of whether it made sense. In the Korean instance, the national position favored decisive action more than withdrawal -- as long as the war would end. In Vietnam the demand was for an end to the war, but without a defeat -- which was not going to happen.

During Korea, Dwight D. Eisenhower appeared a formidable enemy to the Chinese and his secret threat of using nuclear weapons seemed credible. The war ended in a negotiated stalemate. In the case of Vietnam, the public desire to get out of Vietnam without a defeat allowed Richard Nixon to be elected on a platform of having a secret plan to end the war. He then continued the war for four years, playing off the fundamental contradiction in the consensus. Adlai Stevenson, who ran against Eisenhower, might not have been nearly as effective in convincing the Chinese to close the deal on Korea, but we doubt that Hubert Humphrey would have differed much from Nixon -- or that Bobby Kennedy, once in power, would have matched his rhetoric with action.

Yet the fact is that the world does not see the limits of the presidency. In the case of Iraq, the perception of the various players in Iraq and in the region is that the president of the United States matters a great deal. Each of them is trying to determine whether he should deal with the current president or with his successor. They wonder who the next president will be and try to forecast the policies that will break the strange consensus that has been reached.

Therefore, we need to begin handicapping the presidency as we did in 2004, looking for patterns. In other words, policy implications aside, let's treat the election as we might a geopolitical problem, looking for predictive patterns. Let's begin with what we regard as the three rules of American presidential politics since 1960:

The first rule is that no Democrat from outside the old Confederacy has won the White House since John F. Kennedy. Lyndon Johnson, Jimmy Carter and Bill Clinton were all from the Confederacy. Walter Mondale, Michael Dukakis and John Kerry were from way outside the Confederacy. Al Gore was from the Confederacy but lost, proving that this is necessary, but not a sufficient basis for a Democratic win. The reason for this rule is simple. Until 1964, the American South was solidly democratic. In 1964 the Deep South flipped Republican and stayed there. If the South and mountain states go Republican, then the Democrats must do extraordinarily well in the rest of the country. They usually don't do extraordinarily well, so they need a candidate that can break into the South. Carter and Clinton did it, while Johnson did extraordinarily well outside the South.

The second rule is that no Republican has won the White House since Eisenhower who wasn't from one of the two huge Sunbelt states: California or Texas (Eisenhower, though born in Texas, was raised in Kansas). Nixon and Reagan were from California. Both Bush presidents were from Texas. Gerald Ford was from Michigan, Robert Dole from Kansas. They both lost. Again the reason is obvious, particularly if the candidate is from California -- pick up the southern and mountain states, pull in Texas and watch the Democrats scramble. Midwestern Republicans lose and northeastern Republicans do not get nominated.

The third rule is that no sitting senator has won the presidency since Kennedy. The reason is, again, simple. Senators make speeches and vote, all of which are carefully recorded in the Congressional record. Governors live in archival obscurity and don't have to address most issues of burning importance to the nation. Johnson came the closest to being a sitting senator but he too had a gap of four years and an assassination before he ran. After him, Former Vice President Nixon, Gov. Carter, Gov. Reagan, Vice President Bush, Gov. Clinton and Gov. Bush all won the presidency. The path is strewn with fallen senators.

That being the case, the Democrats appear poised to commit electoral suicide again, with two northern senators (Hillary Clinton and Barack Obama) in the lead, and the one southern contender, John Edwards, well back in the race. The Republicans, however, are not able to play to their strength. There are no potential candidates in Texas or California to draw on. Texas right now just doesn't have players ready for the national scene. California does, but Arnold Schwarzenegger is constitutionally ineligible by birth. In a normal year, a charismatic Republican governor of California would run against a northern Democratic senator and mop the floor. It's not going to happen this time.

Instead, the Republicans appear to be choosing between a Massachusetts governor, Mitt Romney, and a former mayor of New York, Rudy Giuliani. Unless Texan Ron Paul can pull off a miracle, the Republicans appear to be going with their suicide hand just like the Democrats. Even if Fred Thompson gets the nomination, he comes from Tennessee, and while he can hold the South, he will have to do some heavy lifting elsewhere.

Unless Obama and Clinton self-destruct and Edwards creeps in, or Paul does get a miracle, this election is shaping up as one that will break all the rules. Either a northern Democratic senator wins or a northeastern Republican (excluding Thompson for the moment) does. The entire dynamic of presidential politics is in flux. All bets are off as to the outcome and all bets are off as to the behavior of the new president, whose promises and obligations are completely unpredictable.

If one is to ask whether the Iranians look this carefully at U.S. politics and whether they are knowledgeable about the patterns, the answer is absolutely yes. We would say that the Iranians have far more insight into American politics than Americans have into Iranian politics. They have to. Iranians have been playing off the Americans since World War II, whatever their ideology. In due course the underlying weirdness of the pattern this year will begin intruding.

Here is what the Iranian's are seeing: First, they are seeing Bush become increasingly weak. He is still maintaining his ability to act in Iraq, but only barely. Second, they see a Congress that is cautiously bombastic -- making sweeping declarations, but backing off from voting on them. Third, they see a Republican Party splitting in Congress. Finally, they see a presidential election shaping up in unprecedented ways with inherently unexpected outcomes. More important, for example, a Giuliani-Clinton race would be so wildly unpredictable that it is unclear what would emerge on the other side. Any other pairing would be equally unpredictable.

This results in diplomatic paralysis across the board. As the complexity unfolds, no one -- not only in the Iraq arena -- is sure how to play the United States. They don't know how any successor to Bush will behave. They don't know how to game out who the successor to Bush is likely to be. They don't know how the election will play out. From Iraq and Iran to Russia and China, the United States is becoming the enigma and there won't be a hint of clarity for 18 months.

This gives Bush his strange strength. No president this low in the polls should be acting with the confidence he shows. Part of it could be psychological, but part of it has to do with the appreciation that, given the strange dynamics, he is not your normal lame duck. Everyone else is tied in knots in terms of policy and in terms of the election. Bush alone has room to maneuver, and the Iranians are likely calculating that it would probably be safer to deal with this president now rather than expect the unexpected in 2008.

Come what may, the current political cycle, with YouTube debates and such, is certainly a move away from our accustomed to Presidential elections.

Your finding Arnold's presidential prospects amusing analyst,

By John Mauldin
http://www.investorsinsight.com

To subscribe to John Mauldin's E-Letter please click here: http://www.frontlinethoughts.com/subscribe.asp

Copyright 2007 John Mauldin. All Rights Reserved
John Mauldin is president of Millennium Wave Advisors, LLC, a registered investment advisor. All material presented herein is believed to be reliable but we cannot attest to its accuracy. Investment recommendations may change and readers are urged to check with their investment counselors before making any investment decisions. Opinions expressed in these reports may change without prior notice. John Mauldin and/or the staff at Millennium Wave Advisors, LLC may or may not have investments in any funds cited above. Mauldin can be reached at 800-829-7273.

Disclaimer PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

John Mauldin Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in