I don't usually write partisan diaries, or even openly political ones. Well, frankly I don't usually write diaries at all; I haven't had the time since I became gainfully employed again. But I realized something while I was scanning the economics blogs the other day, and I think I should mention it to a houseful of Democrats. Not because I like Bernie best (although I do). Not because I don't like Hillary (because for all her known flaws, I DO like Hillary). But because I'd really, really prefer for a Democrat to take the Presidency in 2016.
The problem is The Economy, Stupid. The "expansion", such as it is, has been going for about as long as any expansion in fifty years. Just by sheer cycling time-out, we need to expect another downturn soon. And because every professional trader and financier knows that, they're going to be pulling their money out and getting ready for a downturn, and we all know that most of the market's cyclic behavior starts with human behavior. Major trading houses have put out analyses and recommendations for their clients to move into defensive positions.
That alone would get the ball rolling. But we have Greece, which has changed the dynamic in Europe. Sure, there's another "bailout" agreed to play extend and pretend again. But THIS time, Germany bluntly did its utmost to force Greece out of the Union. The results will cripple a small, poor nation. Other nations on the periphery of Europe that were planning to join the Euro have put those plans on hold. Indefinitely. Hungary, Romania, Bulgaria, Albania, and Serbia will NEVER be a part of the Euro now. Greece will either decide to leave or be forced out within five years. Spain and Portugal may follow. All of this occurs while Putin's Russia is making careful advances towards reasserting its old borders.
Meanwhile, Iranian oil is quickly flooding into the market, keeping the price of oil down (yay!) for the foreseeable near future. This assures the mothballing of much "tight oil" production in North America (yay!) . . . which was bankrolling what we had of an expansion, OUCH. It also ratchets up conflict in the Middle East between the Sunni and Shia, and increases the flood of refugees into Europe and other locations, but that's another problem, important only in that every problem is a drain on systemic resources.
Puerto Rico has defaulted on a very large pile of loans that were previously marked as "assets" on the books of TBTF banks, meaning that the money supply has suddenly been decreased by billions. And the Fed continues to insist that it is going to raise interest rates back out of the zero-sub-zero range for TBTF systemic borrowers this fall. Because it HAS to, or it loses all power and credibility. But the minute it does, the recession will begin, if it hasn't already.
What all of this means is that the election of 2016 will take place in a recessionary environment. And the public hasn't yet gotten over the LAST recession. Employment figures have recovered due to exits from the labor force, not increases in jobs, and wages have barely budged in seven years. Meanwhile important costs, like FOOD, RENT, and WATER have gone up. Sure, fancy electronic gadgetry and the Internet Of Things are cheaper than ever, but you can't eat a plasma-screen TV. The Right blames Obama (continuously); the Left blames the Banks, but the unifying fundamental is that everyone is looking for someone to blame.
Voters in a recessionary environment don't want Business As Usual. An absolutely brainless girl I used to work with (who had graduated as Valedictorian!) told me she had a very simple rule when she voted: if her life was going well and things were good, vote for the incumbent. If life was bad and she wasn't to blame, vote for the Opposition. And let's face it, the average voter isn't blaming him or herself, and isn't using any more complicated calculus than this. In a recession, voters want Change.
That's bad for any incumbent party. But it's a recipe for disaster if that party puts up as its candidate someone who has been a member of the outgoing Administration, and a major "face" of that party for twenty years. The wife of a former President, with links into the Establishment around the world and two miles deep. If things were going well, that identification would be positive, and voters would overwhelmingly choose Hillary over any opposition. But things aren't going particularly well now, and by November of 2016, they're going to be going decidedly rotten.
The one thing that the Democrats have going for them going into this, is that voters are fed up not with one incumbent party, but with both of them. Voters in November 2016 aren't going to want a Bush any more than they want a Clinton. The very last thing they will want is "same old, same old". They're pretty tired of that already. The voters are going to go with the party that puts up the most credible, personable, Outsider. Look at how the Republican polls are already putting Donald Trump ahead of any of the career politicians, even though the man is capable of nothing except monetizing the use of his own name.
So consider a simple gaming matrix with the most probable candidates:
JEB WALKER TRUMP
HILLARY (?JEB?) WALKER HILLARY
SANDERS SANDERS (????) SANDERS
My guess is that if the Republicans put the sorry old name of Bush up, and the Democrats put the much-abused name of Clinton, the Bush will most likely win by a hair just because the Bushes have been Out for eight years. It would, however, be a race, and Hillary might pull through. If they put up Walker, the credible outsider (or Kasich), he will walk away with it. Hillary is only going to win if the Republicans are batty enough to put a professional clown on the ticket, ratifying the general perception that politics are a joke.
If, however, the Democrats put THEIR Credible Outsider up, he will easily beat the outworn name of Bush. He will have a full-blown, total tossup with the Republican Credible Outsider, in a game to which he'll bring less bad baggage. And he will trounce the clown.
So I'm sorry, because I like Hillary, and I'd like to see her win her life's goal. I think she would make a decent President, although she's far too much in the pockets of the security state. But honestly, I think that if the Democrats want to win, they should start thinking VERY seriously about nominating Bernie.