Strong emotions abound on both sides of the political divide that runs through our nation.
Whether you’re overjoyed that Obama won or considering the Republic toast… now is not the time to get swept away in extreme emotions because, frankly, neither response is accurate and will cost you a fortune.
I’ll explain why in a minute, but first let’s look at what REALLY happened because it’s critical to understanding what’s next…
How did the first president since FDR get re-elected with unemployment over 7.9% (real unemployment at over 10% without the post-2008 drop in labor force participation)?
The historic reality is that unseating an incumbent is hard… even when they’re not popular (just ask John Kerry).
But if there was ONE thing that got Obama re-elected, it was marketing.
Cynical and brutally effective marketing. Sadly, political consultants will pour over this case study for generations. Machiavelli would be proud, as would Saul Alinsky.
Specifically, hyper-targeting to Obama’s base and a dispiriting disinformation campaign aimed at disaffected white independents and conservatives.
Among the many ironies and brazen hypocrisies was Obama’s use of projection… while he accused Romney of not caring about 47% of America, his campaign literally gave the middle finger to about 49%.
That’s called winning the battle at the risk of losing the war… and it will make governing nearly impossible.
The Obama campaign was inspired by the Truman win over Dewey, and as then, the outlook going forward is not bright for Obama’s second term.
But he did win.
How? By using 2012 technology with social media, micro-targeting pitches to the massive list of followers, matched with unprecedented precision in the ground game.
The Republicans, by fate or foolish design, walked into the trap. The GOP is not known as the ‘Stupid Party’ for nothing.
What trap? The commonly held falsehood that the 2008 crash was all Bush’s fault was the first part. In 2006 the Democrats took over the Congress and Senate and shived the economy in the media. They talked down the economy, badgered Bush about ‘high’ unemployment when it was about 5% and squawked about the debt and deficit. Ironic, considering the current reality under Obama’s first term is worse on every measure. And yet if you ask most people they blame Bush for the economy almost as much as Obama does.
What the GOP needs to learn is that the Democrats never stop campaigning and build memes into the cultural narrative.
Oh, and the Democrat propagandists don’t burden themselves with the truth either – it’s spin city all the time.
For example… this spin won Obama the election, and it was years in the making.
The housing bubble is what ultimately took the markets down and that was primarily caused by the Democrat inspired Community Reinvestment Act and fueled by Federal pressure and encouragement to banks to ‘not be racist’ and lend to any and all applicants, regardless of ability to repay. Obama has his fingers in exacerbating this back in Chicago if you wish to do some homework on his legal practice.
So the economy collapsed in 08 and Bush wasn’t innocent, nor were the rest of the Bush-Era GOP, but the fact that the Democrats have eliminated their perhaps greater role entirely from the narrative is a PR victory of historic proportions.
Why? Because with Obamacare and the bad economy being the top issues for voters, the GOP managed to nominate the one guy who couldn’t fight credibly against the former, and could be painted as Richie Rich Wall Street baron on the latter.
The Democrats can count on a moderate Massachusetts Republican like Romney to default to gentleman’s rules while they go MMA Street rules… and without a shred of shame, they flat out lied about Romney from top to bottom.
If you don’t believe me, you got duped. From GM to Benghazi to the fraudulent Solyndra and countless other failures and scandals on top of Obama’s Democrat party tight connection to the 1%, Wall Street, and even Bain Capital, the list is literally too long to go into here.
The GOP either assumed America knew about these things or decided not to risk ‘going negative’ – and that cost them the election when Obama decided to wallow in negative. Nice guys do not win, just to be clear.
Not that Romney was a saint, he eviscerated his GOP competitors and the irony is that the GOP has a history of taking the gloves off against their own while playing the fool against the Democrats.
But that is a tale for another day.
This is what you need to understand, though, when interpreting the election results and their effect on the future.
The bottom line is that Obama ginned up his base with imaginary ‘War on Women’ and ‘47%’ memes while depressing about 10 million mostly white voters from wanting to vote at all. Considering Obama won by about 2 million votes, the idea that it was a minority tide that overwhelmed the Romney campaign is as dishonest as the rest of the 2012 cycle designed by David Axelrod.
So if you are worried that the nation is now perpetually an Obama and Democrat playground, fear not. And if you are an Obama supporter who feels you’ve finally vanquished the nasty GOP, you should curb your enthusiasm. Turnout was lower in 2012 than 2008 for Obama, too, and a majority of voters polled don’t trust big government, don’t like Obamacare, don’t think they’re better off, and they don’t trust either party at all, which is why they voted back the GOP congress to prevent either party from having the full reins of power.
What does all that mean to your pocketbook? First, ignore the public pronouncements from both parties right now. The markets tanked on the news of the election results and the election year bull rally in stocks is on life support.
Whether Obama chooses to be more bipartisan or a partisan brawler again remains to be seen, and there’s no telling whether the GOP will cave out of the defeat or come out swinging.
Just know that the country’s house is on fire and the grown ups are in a three martini quarrel and we’re on our own right now.
What is certain is that the myriad of intractable fiscal problems that got worse under Obama like the debt, the debt ceiling and the Bush Tax Rates, not to mention Sequestration, entitlement reform, and the severe job crushing effects of the Obamacare roll out will take the next several years to play out. The Bush wing of the GOP is at war with the Tea Party wing and the Democrats are likely to overreach toward a mandate they do not have out of hubris that comes with an ego the size of Obama’s after this 2nd historic, if likely Pyrrhic victory.
Politics is the art of the possible, and now we can see that a politician can swing from ‘Hope and Change’ to ‘Hate and Divide’ and still get re-elected with a crap economy, scandal and failure, and all it takes is superior marketing and ground game. Nixon is likely rolling on spin cycle in his grave.
The Democrats will rue setting the bar to a new low because the GOP will surely borrow the strategy at some time in the near future.
America the Republic will suffer as evidenced by over 10 million people choosing to abstain from their most precious civic right to vote… but that’s a story for another time.
The better candidate did NOT win. Romney may not have been my ideal candidate, but past is prologue. Obama’s shown no ability to govern nor lead on a bipartisan basis and the odds are long that he’ll magically manifest those skills now that he’s no longer concerned with reelection.
There’s a reason 40 newspapers switched their endorsement from Obama 08 to Romney – and it’s not because they loves them some Republicans.
Romney was right: we can’t afford another four years like the last, so let’s all pray the kids in DC figure out a way to get along if only out of necessity.
Now is the time to keep your eyes wide open and detach from the propaganda machine that is our media (at an all time low in public esteem, by the way).
Our Federal government is far to big and powerful for the public servants running it to behave like petulant children reenacting ‘Lord of the Flies,’ but that’s what we’ve got and I fear for a nation of Piggies.
Neither victory nor defeat solves our pressing problems and the same clowns that have us at the brink of a fiscal cliff (in both parties) are also the ones we’re supposed to trust to save us.
You can see the problem with that, right?
After all that, there is good news.
The markets are going to swing wildly and these will be times of great opportunity for massive gains – if you’re an investor or trader. Of particular interest are the currency markets and the fate of the Dollar as the Fed’s 3rd round of ‘Obama Election Fund’ quantitative easing plays out. If you didn’t see the special invitation to Scott Barkley’s FX trading room, I strongly recommend you take him up on the absolutely free chance to see his precision trading in action. He’s racked up 18 months with just ONE losing week. You can check it out here.
It’s time to get back to work.
We live in momentous times and America will prevail in spite of our all too human leaders and their political tug of war. Obama won’t save the world and he won’t end it either. Our focus now must be to shift from the antics of the campaign season and toward the opportunities and challenges at hand.
Stay tuned, the coming year is going to offer chances to win big and lose big, so keep your eyes wide open.
Until next time…
David K. Miller
Managing Editor, Absolute Wealth