Bob Barr Joins the 2008 Race

There are two ways of looking at Bob Barr’s accepting the Libertarian Party’s nomination to run for President, the first is that IF Bob Barr can successfully swing enough Conservative voters to the LP column, Barack Obama (the presumptive Democratic nominee) will cruise to an easy victory, the second is that Bob Barr will not garner any more votes than any other LP candidate normally does and will have pretty much no impact, especially considering the fact that most voters KNOW that voting for a “Third Party” candidate tends to benefit the candidate that voter likes least.

Of course, there IS a third way of looking at the Bob Barr candidacy and that is from an investor’s perspective.

We’ve had a quarter century of unprecedented prosperity largely due to our turning away from the “Big Government” Keynesian policies of the late 1960s and 1970s and embracing more market-based Supply-Side policies.

Wary investors are “shorting the American psche” right now. That is, investors are seeing that many Americans have come to take the prosperity that Supply Side policies have delivered for granted and are entering a cycle where they are growing less wary of big government and more demanding of governmental solutions.

Both Houses of Congress are now in the hands of Democrats. Liberal Keynesians now run the Democratic Party. Electing a John McCain may very well NOT do much, if anything to stop the spread of Keynesian policies...and the inevitable economic malaise that comes along with them.

So why not elect the most Liberal Democrat to preside over such a disaster?

Seriously, if we’re going to have a real economic downturn, isn’t it best to saddle a Liberal administration, with a largely Liberal Congress with that disaster?

But won’t the Liberal Keynesians just claim that it’s “the costs of the war” and other “inherited problems” that led to the downturn?

So what?

That never works. It didn’t work for G W Bush and he inherited a recession that began with the NADAQ implosion in the Spring of 2000...AND he inherited a radicalized Muslim menace that had been ignored over the previous decade...AND he inherited a slew of business scandals (Tyco, Worldcom, Enron, Arthur Anderson, etc) that broke in the summer of 2002.

When the people are hurting, they don’t look for nuance. When the economy tanks, the people running government AT THAT TIME take the blame...and the corresponding fall.

Well, shouldn’t people like yourself be fair about things? After all, YOU did continuously make the point over the past seven years that the current administration inherited many of those problems, you wouldn’t do the same going forward?

Of course, I’m going to be fair. BUT, the wars in Afghanistan and Iraq have NOT brought on any major economic dislocation and they HAD to be fought, as radicalized Islam NEEDED to be confronted!

The worst of the housing bubble will have occurred a full six months prior to the next administration’s taking office, whereas the NASDAQ collapse was in full effect, and just began taking down the DOW as the Bush administration took office.

I’m sorry, but if there’s going to be any major economic dislocation going forward it’s going to be BECAUSE of the Liberal Keynesians allowing the Bush tax cuts to sunset in 2009 and 2010, and their increasing government spending as tax revenues contract, as more higher income earners defer more of their incomes in various tax deferred vehicles.

In other words, IF there is going to be a major economic dislocation post-2009, it’ll be due virtually entirely to Keynesian policies and it will be incumbent upon fair-minded people to place the blame squarely where it belongs – on those failed Keynesian policies!

So, from an investor’s standpoint, (1) money can be made from “shorting” the American economy, just as surely as “buying” it and (2) if we are going to be saddled with Keynesian policies anyway, why not have a true Keynesian (like an Obama) in the WH when they fail and then heap all the scorn and blame on him and his fellow Liberal Democrats?

Why not, indeed?

In many ways, the investors viewpoint is the clearest. IF we are going to get a switch to a more Keynesian styled approach, then why have a John McCain in the WH to muddy the water and allow the media to erroneously blame the “Conservative” (even though he’s not) John McCain?

With a Barack Obama, already over-hyped and over-promising at the helm, and with both investors taking their money OUT of the market AND higher income earners deferring more of their income in tax deferred vehicles, he’ll be faced with both DECREASING job creation and DECREASING tax revenues, a veritable “double whammy.” Under those conditions, an already fragile economy (as the one we have now and will have through the rest of the year, even as job creation increases, though home foreclosures reach their peak in July 2008) may not be able to avoid being plunged into a severe downturn.

Under that scenario, midway through Obama’s first term, we would witness Carter-styled Stagflation, with near double digit unemployment, double digit interest rates and double digit inflation. At that point even the MSM would bail on the Liberals they once helped elect. THAT would spell doom for Keynesianism and for the Liberal Democrats who advanced it, perhaps opening up the Democratic Party for a takeover by the Conservative “Blue Dog” Democrats.

Could investors be insuring a Keynesian winner in 2008?