Christian Fong

America: Still the Land of Opportunity

Pundits can talk about the demise of America, and opine about why we are no longer great.  Media elite can talk about the post-America geopolitics of the world.  But though it makes for good press, preying on our fears of decline and the loss of the American way, the numbers tell a different story. 

America is still the land of opportunity.  It is still where the world’s best and brightest come to improve the lives of themselves and their children.  The numbers don’t lie.  Where are they coming from?  Graph of the day…

Is the Fed ruining your Retirement?

For the past century, a politically independent central bank has proven, at worst, "the least bad thing" for long-term economic stability.  A reading of monetary policy history, in particular Friedman's work, gives an appreciation for both why and how it works.  We can thank the Fed for keeping borrowing rates predictable.  The low volatility leads to lower rates, as the imbedded option prices are lowered.  The lower rates then keep inflation at bay, even as the Fed pumps up the money supply like a weather balloon, right?  And low inflation keeps the stock market and broader economy from a downward spiral, right?  That's the traditional argument, anyhow. 

But this is where a pair of economic findings in the last few days step in. The first link started the discussion a couple of days ago, showing the link between inflation and the stock market since the beginning of 2008 (i.e. during the Recession).  The second link, from a blog posting this morning, broadened the study to the beginning of 2003 ...

5 Things we Learned from Iowa Caucuses

Five things I think I learned from yesterday's Iowa Caucus:

1) Iowa as Presidential filter.  Every four years we are reminded that Iowa does not consider its role as "kingmaker."  Once again, the message from all corners was that Iowa could support various candidates that had a unique message, 50-state viability, or great retail-politics dedication.  The intense face-to-face scrutiny we give the candidates as individuals exposes flaws that no camera or stadium event can.  Ignoring Huntsman (as he ignored Iowa), as of this morning, it looks like four candidates will move on.  Iowa does its job well, and deserves to keep it.

2) Media Rules, but Social Media rises:  The traditional media made the rules, through its debates that were masterfully scheduled like a fall prime-time television, reality-show series.  Both Santorum and Gingrich were the beneficiaries of strong debate performances, and Perry ("Oops") and Bachmann ("I'm a serious candidate!") had media/debate gaffes.  But there was little doubt that Ron Paul ruled the social media debate, in keeping with his youth-dominated base, and I think it propelled him to his strong finish.  Does media rule the process?  Yes. But the shift to social media is real, and Iowa showed that either can provide a winning media strategy.

3) Romney is not inevitable.  By Thanksgiving, I suspected Romney would "pop" in the late days, due to his 20% support base, the strong Romney vs Obama polling, and the sense that the up-and-down polling meant that others were being considered and rejected.  I was wrong.  Romney never did "pop", and his caucus support was just about the same in 2012 as in 2008.  I talked to many people who said, "I don't really know who Santorum is, but I might as well."  Really?  The Romney campaign will spin, but it is clear that Romney is having trouble connecting with GOP voters.  Going forward, a smaller field gives someone the opportunity to consolidate support. He's still the front-runner, and time will tell if it's a fatal weakness.

4) Negative politics still rules Iowa.  Gingrich stayed positive...it didn't work.  What works?  Millions of dollars of attack ads.  Forget the polls, the focus groups or the polite Sunday conversations.  Iowans have been trained to speak kindly and talk about sportsmanship and loyalty, but dig a little and one might find Iowa is more Roman than Greek: they prefer blood sport in the arena to polite discourse on Mars Hill.  (Santorum stayed positive, but did not face the attack ads...he will now.)  By the way, I lived for five years in New England...it isn't much different up in Yankee country!

5) Gingrich as McCain?  The parallels are impossible to ignore: Santorum as Huckabee, Gingrich as McCain, Romney as Romney.  Gingrich and McCain?  Both carry a bit of maverick unpredictability.  Both had campaigns left for dead, only to come back for decent 4th place caucus finishes.  Both had national viability, strong name ID and broad support, leading to a lower need for an Iowa win.  Plenty of reasons to reject this comparison: 1) McCain put in a minimum Iowa effort in 2008, while Gingrich worked hard in 2012, 2) Ron Paul is still very much in the mix and 3) McCain is about to endorse Romney.  Still, the similarities are hard to ignore.