The Sheep Herding Problem: Carrot or Stick?
"Pretend for a moment that you are a highly placed "elected" official who emerged "victorious" from the 2004 presidential debacle. There you are, sitting in a bombproof basement conference room, with virtually all the trappings of power at your fingertips.
Being a former Master of the Universe in the corporate world, you have a great handle on the oil situation, and realize that without an assured supply of oil, America would be in for a gut-wrenching change of lifestyle - one that would cause grief to your banker friends and corporate buddies. Oil and interest, you know full well, fuels the corporatist paradigm. No, you conclude, the best way to keep the most people happy, is to keep the game going a bit longer - while gently driving voters to put as many of your buddies back in office for another term. But how would you do it? Carrot or stick?
One way might be to appoint an "insider" from a large stock brokerage firm like Goldman Sachs - someone who is expert at running markets - as Secretary of the Treasury. With someone like Henry Paulson at the helm, only the truly cognizant would understand his moves to reenergize the President's Working Committee on Markets (a/k/a the Plunge Protection Team). The few astute enough might be able to comprehend, as Gary Dorsch of "Global Money Trends" writes, "How does the US Dollar Defy the Law of Gravity." Fewer still might take the time to consider Jeff Saut's "An Eerie Stillness" piece which appeared yesterday at Minyanville and offers in part that:
"It’s also worth noting that we’re not conspiracy theorists, believing that Lee Harvey Oswald acted alone and that George W. Bush really did win the election. Yet, there remains an eerie “bid” in the equity markets since those July lows. For example, markets typically rally, then correct by about one-quarter to one-third of that rally’s point gain, before beginning another rally phase. After that phase, they again correct by one-quarter to one-third before re-rallying. This, however, has not been the case recently. Indeed, every time it looked like the indices were about to correct, mysterious buyers materialized in the futures markets. Those “buyers” tend to widen the futures premiums so far above the cash markets that it attracts arbitrageurs. The arbs, in turn, short the futures and buy the appropriate baskets of stocks. That operation allows the arbs to “lock in” the spread between the futures price and what they paid for the basket of stocks, assuring them a risk-less profit and, in the process, driving stocks higher."
And while that's going on (arbing up the indices), there's the growing movement to securitize nonperforming loans (NPL's) and magically ("Presto!") turn otherwise diseased paper into brand new asset-backed securities (ABS's) and use them as collateral - a financial sweeping under the rug worked out in the wake of Japan's real estate collapse since 1989. Sure, housing collapses anyway, but the ABS's help the market survive.
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But to return to the problems of our "elected official" in the bombproof conference room, let's consider the present state of affairs. Latest polls show that the voters are lacking confidence in either political party - thinking as reflected in a new CNN poll out today that neither party has a plan. Well, doggone it, those voters may be onto something.
So you weigh the options. What are the "events" that could be manufactured here in the final days leading into the election which could drive the sheep....voters if you must...to the polls in sufficient numbers, in case the republicorps quietly orchestrated "Anti-fraud laws" don't keep enough of those darned independent and democorps from voting?
The dynamic here is interesting to watch: On the one hand, seasoned observers will argue that when all is said and done, "It's the economy" - and with the Dow setting records, the Bushocrats owe Henry Paulson a beer or two because he'll carry the day. Then too, the administration - at least for the next few weeks - will drop the "stay the course" rhetoric, hoping that voters will somehow read "flexibility" into Washington's oil plans for Iraq and Iran. Maybe that'll fool a few servicemen and their families...then again, maybe not.
Is there a final carrot, or stick, that could be applied to the sheep?
An attack on American soil by "terrorists" would be immediately suspect - but al Qaida has already tried that in the Madrid train bombings a while back (2004). Such an attack would be immediately suspect. Besides,it didn't work in Spain.
The US could park an aircraft carrier group off Iran and goad them into shooting at us - a sort of modern day Gulf of Tonkin spin. But Iran's been yelping about plots long enough that it might seem contrived if the US did something that obvious. And Israel's got its problems now with overflights of Lebanon - and jeez, this could end up with Israel duking it out with the UN. Although they could launch on Iran in a NY second.
There could be a massive roundup of illegal's - there's a new poll out this morning saying the public supports a crackdown on illegals - yeah, maybe something like that would be an attention getter. And it would be "safe."
But with the second cup of coffee in the bunker, the problem of dilution of message comes into focus. Immigration has all of a sudden popped up everywhere; there's been a rash of "illegal immigration stories. Russia this morning is vowing to tackle illegal immigration - a strong message to Georgia. Blurring out the borders of the message, Australia is working illegal fisheries, and even Iran has illegal immigrant issues. Maybe British Home Secretary John Reid is onto something with his call for EU immigration limits.
The problem of whether to apply a carrot or a stick is getting easier by the day. American voters are increasingly skeptical of the upcoming elections - and reports from Houston TV, from
Maryland TV, from CBS, and even Computerworld sound an early warning on electronic voting machines. Maybe those "time monk" guys at www.halfpasthuman.com will be right again - a Constitutional crisis of a month or so following the "elections." What they don't know, huh?
Because voters are getting more locked into their positions - and they're already hearing the Federal Budget may be as much as six times larger than reported publicly (thanks to off books accounting) and the continuing trash of Iraq, the stick is more useful now than the carrot. After all, bad news travels faster than good - and time's running out quickly. An "attention-shifter" is needed - and like those "time monk" guys figure, it should be literally a big last minute thing - perhaps as late as November 6th. Maybe even disrupt or postpone elections if big enough.
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Well, the election plans are set and everything planned is in play. So as VP, you'd sit with the coffee and ponder the really important stories of the day instead of worrying about an election whose course is already set. "Halliburton expect to spin off KBR by April." Ah, some good news for a change, you think...maybe that will pay for a ranch up the road from George's new place in Paraguay. Paraguay's fresh water Guarani Aquifer is after all, one of America's new strategic interests. Especially now that Japan is helping to finance Iraq's oil redevelopment and expansion."
urbansurvival.com
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