This blog has seldom commented on US politics and US political choices for the voting public since I have believed that there is a strong current of bipartisanship and continuity on most things good and bad – mostly for the bad, of course. Ye,s once in a while, the choices become stark. Perhaps, the case of the recall ballot on the Wisconsin governor was one as was the case with New Gingrich back in 1994. However, when it comes to, say, financial sector regulation, there is hardly much of a difference between the responses of the parties from either side of the aisle. Perhaps, they talk differently but do the same thing.
David Rosenberg of Gluskin Sheff commended the article by David Brooks published in NYT on June 4th. With some qualifications, he favoured Walker retention at Wisconsin. He argued that a favourable outcome for Walker would signal that Americans were willing to tackle their problem of debt. In fact, Chris Wood of CLSA wrote something very similar in his weekly missive, ‘Greed & Fear’.
Well, I am not so sure. The decline in the household savings rate from something like 8% in 2009 to around 3.4% does not exactly suggest that. Nor have the various surveys suggest that the American public, in general, gets it. For instance, see this one. A Washington Post/ABC news survey in April 2011 showed that Americans favoured taxing the rich but resented cuts in Medicare. That is easy.
Let me be clear. I am not picking on the American public. It is the same in most countries – developing or developed. Ask Greeks, Finland (see this one too) and Bulgaria. People do not like hard choices. No politician wants to risk telling them that they have no choice. It is rational on both sides, at a narrow level. It is not, at the systemic level.
In the meantime, good friend Dr. Vidyasagar sent me this link from ‘Naked Capitalism’.
My view on these debates remains the same. In the final analysis, it would matter far little. As I wrote in MINT recently, economic ignorance and illiteracy in the US Government and Congress are bipartisan.
In a recent blog post on Jim Grant’s interview to CNBC, ZeroHedge wrote the following (emphasis mine):
He ends on a rather interesting note that the Wisconsin win and the potential for an Obama loss in November may be more of a positive driver for stocks since markets begin to revert to a free market once again – we suspect this is not the case given the donors/beneficiaries under Romney’s wing.
Well, that is what I meant by ‘bipartisanship’.