The night after the inauguration of Obama, a group of members of the party's establishment, met for dinner. After seeing more than a million people attend the inauguration they feared that the GOP might be dead and their wilderness might be measured in decades. At the same dinner, they left with a "solution": the GOP would say no to everything from Obama and commit themselves to not recognizing him as president.
If that was their plan, they have executed it consistently. Including a vacant seat on the Supreme Court. Even though Obama was elected by the people for 4 more years, year 4 doesn't count in their mind.
The problem for the GOP has been its only unifying ideology was saying "no" to Obama. Obama leaves and these fissures are now exposed - February 28, 2016.
Sorry for a delay in posting. My day job has been intense. And frankly, I have been trying to wrap my own head around this 2016 presidential race.
On a personal level, I can't vote for Trump, and I can't see voting for HRC. I am hoping for a GOP brokered convention or a third-party candidacy. But that is not what I want to concentrate on today. I want to talk about how MY GOP turned into Trump.
The first election I was eligible to vote in was 1980. It was an easy choice based on my location and my college studies: Chicago-area and Supply-Side Chicago School of Economics.
Reagan was in my mind a better and to-be-trusted Goldwater. And I think I was right. Instead of resorting to Nixon's angry coalition, Reagan really stood for new things. He won reelection in a landslide, I believe, because he was a pragmatist. Of course he raised taxes many times. But that wasn't the point. Net/net taxes fell. Its effect, contrary to common thought, was not realized totally within his presidency. Rather it helped to propel the greatest American economic expansion of the 90s and Reagan deficits turned into "Clinton" surpluses.
Bush 41 - given the shift in the parties AND hauntingly on almost all aspects of policy - is and was - Obama 44. Cautious pragmatist. Chased and won a social policy near-and-dear - American Disability Act. No foreign policy overreach. No bombastic foreign policy statements. His sin? He raised taxes - just as Reagan would have done - but made the mistake of saying he wouldn't when he ran for president. Over that ONE LITTLE thing, the GOP essentially kicked him to the curb and a third party candidacy led to electing a president without a +50% majority.
Clinton did two things that would impact the country and the GOP through 2010: a) he would break apart Glass-Steagall brick-by-brick AND b) overreach on universal health care. The result being the economic events of 2007 (mortgage crash) and 2008 (banking crash) AND the GOP counterproposal of universal health care sitting on a shelf for Obama to use respectively. Back to that in a bit.
Then Bush 43. Two more key GOP destabilizing moves: neocons unleashed AND massive deficits. Bush 43 was unfairly blamed for the financial crisis and that certainly was a factor in the 2008 election; but his deficits and the raging wars in Iraq and Afghanistan left an ideological hole within the party. Leaving the party without a leader.
Obama 44 pulls the GOP plan off the shelf. Maybe the GOP wanted to debate it. But the pledge of saying "no" to everything effectively tied everyone's hands. The sizzle of ObamaCare was insurance for children until 26 (popular due to generational and economic realities) and ending discrimination of insurance based on pre-existing conditions. So that made a lot of people happy. But others were either not happy about the law or the man. As to the latter, here are the facts according to PoliticalFact: While Trump says premiums are going up 35, 45, 55 percent; the truth is: on average, premiums have risen by about 5.8 percent a year since Obama took office, compared to 13.2 percent in the nine years before Obama.
Regardless, Obama's election, an economic stimulus (universally economists agreed it was needed and probably should have been bigger), and ObamaCare brought out a nutty reactionary movement (Tea Party candidates and voters). The GOP made its pack with a devil they thought they could control. Well they couldn't. Ask John Boehner how many cigarettes he smoked to get through his years as Speaker ...
So going into the 2012 election, an option nobody liked, the fiscal cliff, was a political time bomb after Obama was reelected. Budgets were never really negotiated. Domestic policy came to a standstill. Leaving a large part of the electorate without ANY party to trust. So Establishment and/or Tea Party politicians are being treated the same: despised as an ineffective "ruling class". (Do people remember 2008/2009? I think we can all agree a lot of people don't).
So Trump enters the breech. He could have entered either party. Why the GOP? Because it is impossible to define what the party still is. Neocons vs. isolationists. Courting non-white voters vs. dog whistles for whites to get out and vote. Lower taxes vs. lower deficits. Social libertarian vs. social theocracy. Party of No vs. What Party?
From my perspective, what we have today, is a GOP version of 1968. The only difference is it looks like a third-party George Wallace will likely be the nominee. Trump is just a more populist and liberal Wallace with the same venom but without Wallace's real conviction (before he changed his thoughts after becoming paralyzed).
Again, I have no clue how this is going to play out. Brokered convention (1976 or hauntingly 1860)? Third Party candidate (1968)? Riots in the streets (1968)?
All I know is that in retrospect, I can see how Reagan morphed into Trump. If Trump wins, he becomes the new faustian GOP compromise. Third party? That's how the Democrats lost. But it was step 1 on a 12 step plan to change the party: admitting there is a problem.
Across party affiliation, geography and nations, I have been besieged by friends and business associates, who seem to think I am some political whisperer. The Americans and non-Americans are asking me the same questions - how could Trump be winning, will he win the GOP nomination and could he be the next president?
My answer is always the same. I don't know. But Trump has identified a larger-than-anyone-wants-to-admit set of mad dogs. Trump is pure evil and a fraud; but he knows how to best blow the mad dog whistle. And then the ugly truth of Trump implies there are many more mad dogs that exist in the US than anyone thought.
Causation is harder to prove than correlation; but the best study I have seen regrading Trump's mad dogs, is they are correlated to a larger and growing group of white men, with a disturbing new trend: their average life expectancy is falling dramatically.
Why would white male's life expectancy be dropping dramatically? Again causation is hard to prove, but there are some likely culprits. Economic disenfranchisement - first caused by the decline of demand for manufacturing labor and later the decline of white labor from computerization - is likely leading to increased rates of alcoholism, use of drugs, gambling, suicides and early death.
These white males - from either a lack of understanding or self-loathing - have also become socially disenfranchised. They blame immigrants. They blame the better gender. They lament English/Hispanic options in interacting with auto call centers. And they can't wrap their heads around the fact that an African-American is the president and they are reduced to drinking in a bar and having a few hours of pack behavior calling the president the most regressive slurs.
Just this week, Trump continues to roll. Roughing up protestors. His campaign manager reportedly attacked a female reporter. Loyalty pledges. It doesn't matter. He wins states now almost automatically. His victory speeches are a stream of conscious bully rant mixed with self-promoting informercials of the Trump brand.
Maybe now it's possible to take a stab at what is really going on.
If 99% of white males are economically/socially disenfranchised, perhaps they feel burned by the GOP from 2001 to 2008 and by Obama over the last seven years. Maybe they have just given up on political parties. They support Trump because he has the exact mad dog whistle they want to hear.
This is also maybe why HRC has not crushed Sanders yet. If Trump is a fascist that appeals to a lot of mad dogs; then Sanders maybe a socialist that appeals to some mad dogs.
If this theory is correct, assuming no third party threat, the 1 percenters might not be able to stop Trump from being the next President.
Joseph Goebbels
I fell like some 1930's writer in Germany. Words and facts don't matter to people longing to escape economic and social disenfranchisement. People are looking for a savior. There is no plural word in Germany for savior. It will not matter to Trump's voting base, but here are a sampling of his lies -
I am tired of Trump (and other Republicans) saying Obama has damaged the US.
While reasonable people can debate Obama's presidency; there should be no debate on facts.
Fact. The Dow Jones was 7,949.09 at the time of Obama's inauguration. It now stands at 17.066.77 today.
Fact. Unemployment was plummeting when Obama took office. Catching this falling knife took time. Today the unemployment rate is 4.9%.
Fact. 7.9 million jobs have been created under Obama
Fact. Business startups have increased by 20% and job openings are the best in 15 years.
Fact. Obama was elected twice. He promised to wind down two wars and did. Whether history decides this was good or bad isn't the point. He made an election promise. And kept his word.
Fact. U.S. oil production is up 94 percent. Wind and solar power are up 252 percent. U.S. dependency on oil imports is down to the lowest point since the 1970s. Pump prices are lower than anyone could have ever imagined.
Fact. The percentage of foreigners who say they approve of the U.S. is up in most countries including France, Britain, Japan, Mexico, Turkey, Pakistan and even Israel, where it stands at 81 percent of those polled this year. One of the few exceptions is Russia, where U.S. favorability has plunged to 15 percent. So much for Obama not carrying about Israel and being too week with Russia.
As Reagan famously said in 1980 - are you better off - the answer under Obama is true in a macro sense.
But here's where Trump's lies fall on fertile ground while Obama's facts wither and die: Trump's base - for the most part - are angry men who are unemployed, underemployed and/or who's wages have been frozen for a decade and a half. They also don't accept social changes such as women's rights, LBGT rights and African American rights.
I know plenty of Trump's supporters. I also know that the juxtaposition of their lot in life stands in infuriating context with an African American president. The "N" word is back in a big way.
For these Trump supporters, they want a savior. They don't care if he is lying. They don't care if he is misogynistic. They don't care if he is a racist. They only care that he isn't from Washington and he is not named Obama.
Trump's rhetoric, when you distill it down, is a message of going back in time. A time when Trump voters had more economic hope. A time before world trade. And a time when being white, gave even the dumbest, economic and social currency.
Well time doesn't move backward. It only moves forward. Non-Trump voters understand this. Trump voters either don't understand it or they wish to remain in a state of know-nothing delirium; just as people did in Germany.
Well before the election of Obama 44, the GOP was damaged by Bush 43. He not only began two costly wars, but he spent so much money as to lead to gigantic debts, which at the time, was in contrast to budget surpluses during the late 1990s.
The final GOP straw before Obama's election was the financial crisis that began in October of 2008. The crisis wasn't Bush's fault, but he was a lame duck. It was Obama and the Democrats in the House that lead the charge to help Paulson and Bernanke. The GOP members of the House didn't support the federal government treating the worst financial crisis since 1929.
The night after the inauguration of Obama, a group of members of the party's establishment, met for dinner. After seeing more than a million people attend the inauguration they feared that the GOP might be dead and their wilderness might be measured in decades. At the same dinner, they left with a "solution": the GOP would say no to everything from Obama and commit themselves to not recognizing him as president.
If that was their plan, they have executed it consistently. Including a vacant seat on the Supreme Court. Even though Obama was elected by the people for 4 more years, year 4 doesn't count in their mind.
The problem for the GOP has been its only unifying ideology was saying "no" to Obama. Obama leaves and these fissures are now exposed.
Meanwhile one has to look at the white working class perspective from October of 2008 to the present. They lost their homes and/or buying power. Their wages have been frozen if not replaced. They can't wrap their heads around their disenfranchisement while seeing a African-American president every day on television.
All of this is why Trump may become the next president. And it will further balkanize the GOP.
While looking like an embarrassing clown, Trump knew all along what he was doing.
In Iowa, he campaigned in towns where the white working class was a majority. He steamrolled through New Hampshire because it is a very white state. He rolled through South Carolina because it has a large white uneducated voter base. He won in Nevada because ... well nobody knows how their caucus works and whether it is legitimate.
Now comes Super Tuesday. Trump on two occasions has refused to denounce white supremacists. He claims he "knows nothing about white supremacists". That argument doesn't pass the snicker test.
I often say you can only sell two things and win - be it in business or politics: dreams or life rafts. Obama sold dreams. Trump is selling life rafts.
And while one should not confuse marketing with truth; Trump isn't good for the GOP or this country.
CNN's GOP debate was nothing if not entertaining. Wolf Blitzer lost control and it was the most entertaining debate I have ever seen in my life.
In one 5 minute exchange around the end of the debate three people were talking and yelling. It was like a mix of Jerry Springer with the comedic absurdism of an episode of Seinfeld.
One thing Trump said that spoke volumes was -
"You don’t learn anything from a tax return. Except Mitt Romney’s. It hurt him “bigly."
Of course "bigly" isn't a word or proper grammar. But it does serve as a metaphor for Trump.
If Trump couldn't use the words huge, great, they love me, let me tell you - as a sample - I don't think he could complete a sentence. Or state a policy.
While I think everyone of that stage last night should not be president (or the two Democrats as well), one thing is very clear: Trump is an aging bully.
Rubio, who doesn't seem to have any plans at all, showed what you have to do with a bully: you punch him back and the people will cheer. He did it so much last night, that by 10PM ET the bully looked like he wanted to go to bed.
Of course this isn't going to change Trump's march. His neo-Nixonian coalition of economically disenfranchised and people who live with social and terrorist fear (Cruz and the media have never made the connection between these issues driving religious behavior as opposed to it being in vacuum) is formidable.
This formidable coalition doesn't care about grammar. They don't care about substance in policy. They don't care what is "conservative". They don't care about debates. They don't care that Trump is a bully. They just know they are screwed and Trump is their champion. Period.
How formidable is the Trump coalition? Bigly.
Despite all predictions - including this writer - Donald Trump seems to be the inevitable GOP nominee. Hillary Clinton by default seems to be the inevitable Democratic nominee.
What do they have in common?
The both have high unfavorable ratings: Trump 62 vs. Clinton 59%.
Anyone that says they can predict that kind of horse race ... is wrong.
What happens when two candidates are so un-liked? Does turnout go down proportionally? Does a third-party candidate rise up and if so, which of the two main party candidates will that benefit.
Then there is the 70 vs 69 dynamic.
Trump will turn 70 in June of this year; while HRC will turn 69 in October. That is unprecedented. So where does the youth vote go?
One other thing. The next president will help shape the Supreme Court for decades to come. How will social conservatives vote when the GOP nominee - Trump - is pro-choice?
The only prediction I can make between this hypothetical matchup is this: the majority of the country will not be happy in January of 2017. You thought throwing eggs at Bush 43's limo (he couldn't make the walk down Pennsylvania Ave) was bad in 2001? The winner of this race will fare worse.
There was a fair amount of news that Cruz had topped Trump in national polling this week.
What all the stories missed was the grouping of Trump/Cruz voters.
Last month Trump had a 13 point lead on Cruz - 33 to 20%. Now Cruz has a slight lead of 28 to 26%.
In other words, the Trump/Cruz block - anti-establishment - represents 53 to 54% of GOP voters.
That should alarm the establishment into culling the primary field as soon as possible. If this becomes a three candidate race - and my guess is the establishment picks Rubio - the establishment might have a chance to win out or win at a brokered convention.
But given the fact that the Trump/Cruz block has a majority, and has had it for the last month according to the polling, the longer the establishment takes to unite, the more likely the establishment will have lost control over the GOP.
Thats what the last two months of polls show.
In football, when a defensive lineman is off sides, the QB has a free play. If they throw a long pass and it doesn't work, they still get yards from the penalty. If they throw a long pass and it does work ... so much is accomplished without any downside pressure.
Justice Scalia's death is Obama and the Democratic Party's free play.
The "worst" potential outcome for Obama/Democrats is a new GOP president names a conservative judge. And even if that judge is a fire-and-brimstone judge, the Supreme Court's balance of power remains the same. You can't out-Scalia a nominee.
If the GOP blocks Obama's constitutional right to nominate a judge of his party's persuasion OR they keep voting against every one of his nominees, the GOP will suffer in the general election.
I am a RINO. And I am an economic conservative who is libertarian when it comes to social/morality issues. Hence I support every position from the Roberts Court sans Citizens United.
If the GOP blocks Obama for the next 11 months, it will not only galvanize Democratic voters who are apathetic today; but it will peel back RINOs from showing up at the polls or voting Democratic.
What everyone seems to forget is that party affiliation continues to erode. There are good reasons why more people call themselves independent. Not every Republican voter want's Scalia's positions. Many want to maintain Roe V Wade and passionately want Citizens United abolished. There is an inherent schism within party affiliation because people have a political track and a social track. Just taking those two tracks, you would have to have four parties. That isn't going to happen.
Obama has a free play.
Ironically, for the Democrats, the best outcome is for him to "fail'. That is why Obama is going to fight with no hope that any of his nominees will be confirmed. And it's the ultimate trap for Republicans and Obama knows it.
The chart above is the Dow Industrials over the last year.
There are some classical technical indicators within this chart. See the top of the highs? The market was unable to retrace itself after a plunge in August. See the lows? The market HAS retraced itself to the August bottom.
Break through these two equal bottoms? Look out below.
More disturbing is the flight to safety with capital. Capital in the stock market has been sold and it is finding its way into US Treasuries.
Treasury and bonds prices move inversely with yield. The higher the bond price, the more demand for it, which results in lower yields, On January 4th, the yield for 10-year treasuries was 2.24%. It has fallen ever since. It now has a paltry yield of 1.63%. A drop of 61 basis points within 42 days is big.
Advice. 1. I have been preaching for two yeas plus, not to buy stocks. Stay away from that market until a real bottom is reached. 2. US Treasuries are safer but they only promise a return OF capital and not a meaningful return ON capital. You might want to lock in now, because I believe yields can fall into negative returns (see Europe).
Warning signs abound. Stocks have been overvalued. The median wage is still not rising; which is not good for an economy where 70% of GDP comes from consumer consumption. Deflation looks more and more real. Finally, the US stock market is voting with money. Most of the voting is coming from large institutions.
Follow the money.
http://www.johnjazwiecblog.com/2014/02/business-insight-youre-either-selling-dreams-or-life-rafts.html
Some of my blogs work better than others. Most are just ok. And then there are the very few that resonate well beyond my regular readership.
The 2014 blog above (hyperlink) or "Dreams vs. Life Rafts" was one of the very few. If you google "Dreams and Life Rafts" it appears on the first page.
In that blog, I introduced my own marketing language - Dreams/Life Rafts - and why it was important to chose one.
But there always was a corollary. And I would like to present it today.
It all starts out with products and not marketing. Companies have three different products they can make: dreams, life rafts or the absence of both.
Dreams and life rafts can bend the price elasticity curve in a company's favor. While the absence of both does the opposite: a product is condemned to being a commodity.
In the 2014 blog, Apple and State Farm, were the best illustrations of Dreams and Life Rafts.
Now lets look at a few products that are commodities and why.
