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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (92631)	3/22/2008 9:43:18 PM
From: Oblomov	Read Replies (2) \| Respond to of 110194

Bush and his administration are hardly conservative, although he would claim to be conservative. To the derision of many on the right, Bush has even attempted to put the imprimatur of conservatism on John McCain. What more evidence does one need that the terms conservative, liberal, left, and right really don't mean much anymore. I'm not sure that one can equate the exchange rate policy with a particular ideology. Clinton entered office with a weak economy and a weak dollar. The economic recovery, which really didn't happen until 1995 or so, was (as I think you indicate) the result of a pro-business GOP Congress and an accommodating Clinton Administration. The dollar remained strong because of one emerging markets crisis after another: Mexico, Asia, Russia, Argentina. Probably the dollar would have been much weaker if the Clinton Administration had a choice. The 90s were a time of a dramatic decline in US manufacturing employment in part because of a strengthening dollar. The budget position definitely helped the dollar too (but I hasten to add that the budget was never balanced, although it got close). There was the so-called "peace dividend" and a confluence of positive economic trends (such as the dot-com bubble and the 1998 cap gains tax cuts that were a catalyst for the housing bubble) that resulted in big increases in tax receipts. Clinton did claim that his favorite President was Grover Cleveland, who defended sound money and for the most part rejected imperialism (the little adventure in Venezuela excepted). Cleveland happens to be among my favorite Presidents as well. He was, in my view, the best Democratic president in American history. And Clinton was more Jeffersonian, more laissez faire, than any Democrat since Cleveland. So in this sense he wasn't the devil the right painted him as. And Gingrich was the sort of idealist and clear-thinking policy enthusiast to whom, as I recall from my days on Capitol Hill in the late 80s (working for a Dem), even hard-leftist Democrats would listen and, occasionally, heed. It was an interesting time. There were still Democrats in Congress such as Lloyd Bentsen, who were quite astute in their understanding of economics, and who appreciated the power of free enterprise. There were socially conservative southern Democrats and socially liberal Republicans, and these factions were strong enough within their respective parties to have negotiating leverage. What has changed? It seems that sometime in the 90s, let's say around the time of the government shutdown in late 1995, that the conservatives got frustrated with the political process. They were sent to DC to conduct a revolution of sorts, but were stymied by Big Bird and Sissy Spacek mooning for the cameras. Then the election of 2000 happened on the heels of Monicagate and the Clinton impeachment. This has encouraged a garrison mentality in both of the major parties. Our rulers have never been as disconnected from the attitudes and beliefs of ordinary people as they are now. There are a set of issues that the Civil War never really resolved that are percolating under the surface, from which the high degree of partisanship is just a distraction. The variety of commentary we see in response to the collapse of housing bubble and the attendant credit markets is anecdotal evidence of this. It's not simply a "debate" anymore, although it may be presented as such. Like the credit bubble, it's slowly coming apart, and it is fascinating to watch.