Cycles
Our lives are ruled by cycles. People who understand where we are in a cycle or guess correctly have the ability to capitalize on the information.
One example is with global warming. 160 years ago we were at a cycle low in global average temperatures. 159 years ago the conventional wisdom would be that temperatures were going to continue down. Someone with the right information...or guesswork could have made money in a variety of ways by predicting a warming trend. And this is what is happening now with the AGW panic. Companies and individuals are making billions of dollars by connecting catastrophe to normal cyclical variations and claiming that they know the cause (and therefore have the solution). Now that the facts are not aligning with the story, there is too much at risk to not change the facts. How long the AGW proponents can rely on the "are you going to believe these "experts" or your own lying eyes?" will dictate how long the hoax will continue.
There are obviously other cycles that influence our lives. Cycles are a normal and natural part of the economy. Including booms and busts. Governments can provide some influence to the economy. But the government isn't the primary driver of the economy in this country. We are. Governments can increase the amplitude of the cycles and change the frequencies. But for the most part, the government is causing damage whenever they meddle with the economy. But politicians absolutely know how to take credit for what is a naturally occuring cycle.
After the internet boom of the 90s, we all learned that bubbles must burst. And the internet boom was certainly magnified by a confluence of events, including government influenced meddling (think The Fed) and Y2K.
The other side of the coin is that every bust must be followed by a boom. And I think that is where we are now. How many people do you know who have put off buying a car because of their own personal financial situation? How many people are using an older computer, using appliances that should have been replaced a few years ago? it's the opposite of what was done with the Cash for Clunkers deal. That was a very damaging policy because it caused a temporary premature boom that was followed by a very predictable mini-bust (along with other economic ramifications).
I believe that we are now at a point where individuals and business have no choice but to replace older or broken goods. And with businesses, when your competitors upgrade their infrastructure and tools, it makes them more efficient. This requires that the competitors now have to upgrade just to keep up. This is what breaks us out of economic hard times, not government programs.
But if we hit the cycle low recently and we have two years of a strong economy, who will use the opportunity to further their agenda? My thinking is that if there is an economic boom for the next couple of years, Obama will be feeling pretty comfy going into the 2012 elections. Republicans need to be proactive in recognizing where we are in the economic cycle and either taking credit (because we now have a hobbled congress so businesses feel comfortable spending money) or attributing it to natural economic cycles.
Democrats are the medicine men/shaman of modern society. That is to say, they understand cycles and how to take credit for them when they haven't done a thing to earn the credit.
The cycles are positioned to benefit Obama and the democrats. Hopefully we are smart enough to get in front of this. Otherwise I think that the tipping point will finally be reached. |
