Asked what could effect a change in his governing plans, incoming British Prime Minister Harold MacMillan said “events, dear boy, events.” Events are what will save the Republican Party.
Start with a fundamental question: Are President Obama’s policies right or wrong? If you think they are correct, stop reading this column right now. Events will vindicate them. If you agree with me that they are fundamentally flawed and wrong, then you also agree they won’t work.
And, in the current global economic environment, the price for pursuing policies that don’t work is rather severe. Like a tightrope walker, if the United States makes a big mistake, it can send the entire world’s economy crashing down.
Already, we are facing tremendous global economic challenges. The fiscal cliff is the least of our problems. Economist James Fitzgibbon, head of the Highlander Fund, an extremely accurate predictor of the economic trends of recent years, writes of the disaster we face.
“We will be contracting in 2013 (Recession…Depression). I had originally thought a clear implosion was due Q2 2013, but I now have to consider a moving up in time.”
Fitzgibbon’s predictions are:
“[The coming recession] runs the risk of being substantially worse than what happened in 2008. This is a global bank melting, not just an American event. Our model suggests a few things at the moment:
“1. Risk assets are about to get clobbered in 2013 and a bear market bottom is due by Q4 2013, a bounce that is pathetic and a final crushing bottom in 2016.
“2. Real economic activity is about to slow precipitously and commence a serious global contraction.
“3. We are stuck in a banking deflation. Inflation and hyperinflation cannot get a foothold until new credit can be created and lent quicker than the repudiation and destruction of outstanding debts. So far, no such evidence.
“4. Storm Sandy will knock real GDP much lower than most originally forecast … 0 percent to 1 percent annualized. Q1 2013 will be seasonally higher, then collapse into mid-year and year-end 2013.
“5. The real deadly event is when the U.S. Treasury bond market peaks and flails, then reverses course. I am expecting that in 2013.
“6. Like Sandy beat up the northeast, we are now forming the perfect storm in banking, finance and economics.”
Cheerful. Can the Democrats survive this kind of a meltdown? Will their coalition tolerate this kind of economic performance? It’s not very likely. Events will catch up with Obama.
His miserable economic policies are about to cause a meltdown of historic proportions. After getting a grade of “incomplete” from the electorate, Obama is about to get a clear F.
And his party will have to pay the price in 2014 and 2016.