What if Al Smith had won the presidency in 1928? The economic boom that was produced by the Federal Reserve’s expansionist policies in 1925-29 would have ended on schedule. He would have been blamed for the Great Depression in 1930-32. He would have run again in 1932. He would have lost.
Franklin Roosevelt would not have run for President in 1932. He probably would have lost a 1932 bid to be re-elected Governor of New York. (He had replaced Smith.) There would have been no New Deal. There would have been no Harry Truman.
In politics, there are times to lose. Republicans should have learned that in 1932. They should have looked back at 1928 and sighed, “if only Hoover had lost.” But politics is all about winning the next election, not the election after the next election.
The Federal Reserve is creating the conditions for the perfect storm. Under Bernanke’s reign of error, it has expanded the monetary base from $800 billion to $3.6 trillion. Today, it looks like the FED has the best of all worlds. It is counterfeiting $1 trillion a year in digital money. Interest rates are low. Despite this, the economy is barely growing. Unemployment is still over 7%. But no one in high places is blaming the FED for its policies of monetary hyperinflation.
Meanwhile, ObamaCare is fast becoming a visible disaster. Millions of Americans have received “Dear John” letters from their insurance companies. They are losing their coverage. They cannot find comparable policies. They cannot go to www.Healthcvare.gov to find what is available.
If, on February 15, federal judge Paul Friedman announces that the promised federal subsidies to people buying health insurance on Healthcare.gov or any other federal insurance exchange are illegal, because the ObamaCare law neglected to authorize them, and if the Supreme Court upholds his decision, the Democrats will face a perfect political storm.
There are times to win an election. There are times to lose. Voters don’t know in advance when it’s time to lose. They always think it’s time to win. They are wrong.
The Tea Party has its slogan: Repeal ObamaCare. In 2014 and 2016, it is going to win with this slogan. The election in Virgina for governor has shown the way. The Republican, a Tea Party guy, was trailing Terry McAuliffe by 12 points. Then he began hammering ObamaCare. He was out-spent 2 to 1. The Republican Establishment ignored him. Yet he lost by only two percentage points.
If he had started out with just one issue — repeal ObamaCare — he would have won. He now knows this. He has said as much. “Despite being outspent by an unprecedented $15 million, this race came down to the wire because of ObamaCare. That message will go out to the entire country tonight.” These were his parting words. Too little, too late. Close, but no cigar . . . this time.
Positioning himself as a Tea Party candidate looked risky when Senator Ted Cruz read Green Eggs and Ham in his filibuster against ObamaCare. It doesn’t look risky today. It won’t in 2014 and 2016.
The country club Republicans can still win a nomination during the last months of the reign of Ben Bernanke by running against a former Democrat. They will find that Janet Yellen’s reign will not be conducive to smooth sailing.
When the perfect storm created by the FED at last hits the world economy, and when the federal government’s deficits overwhelm the bond markets, the Tea Party’s ship will come in. Until then, it is good enough to get experience running for office, from dogcatcher to county commissioner. I call this the Dogcatcher strategy. I wrote about it 13 years ago. (Click the link.)