The Exercise of Vital Powers

Not only is the Dow at record highs, but the Nasdaq and S&P 500 have been on a tear since mid summer. Nasdaq is up 10% from where it was in July.

As for the assumption the market favors the GOP, I don’t think you’d see a rally if investors thought a Democrat controlled Congress would stall renewing the Bush Tax Cuts.

The Instapundit lead me to this story that I never recalled hearing but think need repeating. Often.

In 1998 when Kip Kinkel decided to take out his anger at the world on his fellow classmates, it wasn’t the Springfield SWAT team that ended the killing spree. It was one 17 year old Boy Scout, his brother and two friends who heard the sound of a rifle dry-fire and decided to tackle the shooter. Oh, and the 17 year old had been shot in the chest before he made his move.

In 2001, “Our first victory in the war on terror”, as our President calls it, was not done by our government. It was done by several airline passengers who decided that it was better to plow into a field in Pennsylvania than into an occupied office building in Washington or New York.

2003 brings us some local heros who restrained a knife welding assailant intent on killing their Spanish teacher.

In 2005 when FEMA couldn’t find its ass form its elbow, a kid from the ghetto found a bus, decided now was the time to learn to drive it, picked up a bus load of refugees, and managed to get to Houston’s Astrodome hours ahead of the Government convoy.

Its good to know when the excrement hits the turbine that Americans will still stand up and do whats right, in spite of our overtly paternalistic government, lousy educational system, and pundit class that teaches us to all be victims.

So I’ve been pondering the intersection of the Efficient Market Theory and the coming 2006 midterm elections and what a record high Dow means for the GOP. On the face of it, one would think a strong Dow would signal that the market expects the GOP to hold on to Congress. The other hypothesis is that the investing class is so fed up with the Bush/Hastert/Frist GOP that they look forward to a Pelosi/Reid takeover of Congress.

The latter is a pretty damning judgement of the GOP. So the question is, what other market signal might we use to predict what will happen in November? That lead to the question of which public company stands to lose the most if the Dems take charge. Lets look at three companies that have been demonized by the left over the years: Haliburton, RJR, and Altaria (Philip Morris).

Looking at the 3 month graphs for RAI and MO, I see a sharp drop on the 18th and 22nd of September respectively. Both of those drops were due to a judicial ruling setting up a class action suit over “light” cigarettes. MO has since made up half the ground it lost that day, and RAI has recovered a third of its drop.

Haliburton is a bit different. Wrapped up in the July GOP primary, I missed this bit of news about the Army cancelling HAL’s contract. It was trading as high as 37 when that news broke. It bottomed out at 26 on October 3rd (right as the Foley mess was hitting the GOP the hardest) and has regained some group to close at 28.7 on Friday.

So neither Tobacco nor Haliburton seem to present any leading indicators as to how the midterms will play out, and I keep looking.

Ok, If you want your ideas to be taken seriously don’t have your 4th grader draw the cover.

I attended the first Georgia Americans For Prosperity town-hall meeting last Tuesday. Congressman Lynn Westmoreland and Herman Cain were the guests of honor. AFP looks to be a good group promoting fiscal responsibility and tax relief in Georgia and nationwide. I look forward to their progress.

At the AFP event, Westmoreland was asked about the Foley Fiasco. It was pretty clear by his explanation that the folks in Washington and in the Media either have no idea the difference between email and IM or they are deliberately trying to confuse the “overtly friendly” emails Hastert’s office was told about with the explicit and disgusting IMs that forced Foley to resign.

Saturday was the Gwinnett GOP’s monthly breakfast. Congressman John Linder was added as a surprise guest to the program. Seems like orders went out to the caucus to motivate the troops, and Linder did as good of a job as can be done defending the GOP’s last six years in office. He too brought up Foleygate and by his comments, it didn’t seem to catch on. They still aren’t getting out the message that Hastert’s office knew about strange emails and not explicit IMs. Also trying to bring up the Stubbs scandal 23 years ago isn’t going to convince anyone that the GOP should be left in office.

Kathy Cox was the other speaker and she had some interesting statistics on Georgia’s SAT scores. Sure we are towards the bottom in ranking and aggregate score. But when you break out the numbers, Georgia has some of the best scores for African Americans among the states where over 50% of the students took the SAT. I need to go find the statistics before I can do the numbers justice.

Finally, tonight was the Georgia Public Policy Foundation’s 15th anniversary. Senator John McCain was the featured speaker. McCain’s speech was canned and he delivered it like a high school kid in his first public speaking class. It was very disappointing. However there were certain parts of the speech were you could tell he was more fired up. The best example of that was when he started talking about Property Rights, Kelo, and the growth of Government. He also made a fairly frank assessment of the GOP’s track record on decreasing the size of government and came close to admitting what I’ve been saying about the National GOP for awhile: They believe that government is good when they are the one who get to run the government.

McCain’s assessment of the North Korea situation seems pretty rational. Two party talks won’t work and will just increase Kim’s stature in the world. We need to pick up the phone and tell China that it is time for them to become a responsible super-power and work with us on resolving the NK situation. If NK isn’t brought under control, Japan, South Korea and even Taiwan will all begin their own nuclear programs in self defense. An asia-pacific nuclear arms race will benefit no one, and will hurt the Chinese the most.

Finally he was asked “What are the first three bills President McCain will send to the Congress?”. His response: Earmark reform, Social Security Reform, Medicare Reform.

I’m starting to warm to the idea of McCain as president. I’m still furious at him for McCain-Feingold. I do think he is more in the right place on torture than the Administration, although I admit I never followed that issue closely. We’ll have to see.

“Yes, the two-party system would be more appealing if we didn’t have these two parties.” - Instapundit

Link

I’ve been noticing a trend in the life-cycle of pundits. They tend to start off with something unique and interesting to say. Maybe they film a documentary (Moore, Spurlock), maybe they write a book (Goldberg, Coulter, Friedman), maybe they get a TV show (O’Reilly, Dobbs). They begin to gain a following and some notoriety. Their book is photographed in the hands of the President. Their followers begin to worship them. Then things begin to go bad.

They start to believe the hype about themselves. They have “a brand” and publishers and producers push them capitalize on it. Unfortunately, good intellectual work takes time and publishers don’t want to wait. So they start putting out crap that is designed to appeal to the baser nature of their followers.

Take Bernard Goldberg. In February of 2001 he released his book Bias: A CBS Insider Exposes How the Media Distort the News . It became a hit with those who felt there was a liberal bias in the media. His premise was the bias in the media was not deliberate. The bias existed because of the insular nature of the media. It was a new concept and it made more sense than a vast left-wing media conspiracy. Goldberg went on the talk-show circuit, FNC, etc. He sold a lot of books and spent 7 weeks at number 1 on the NYT bestseller list.

What is his latest book? 110 People Who Are Screwing Up America: (and Al Franken Is #37). Hardly the pinnacle of original thought and research.

So I’ve decided to classify this “Coulter-Syndrome” and the process of going from an original researcher and voice to a cheap partisan hack “Coulterize”.

*sigh*

I wanted to see Hastert and the leadership out, but it has to be for the right reasons. If he resigns over the Foley fiasco then there is little chance a small government minded Republican will replace him.

Of course, if the GOP loses the house that may change. But a loss right now will get blamed on the sex scandal and not on the fact the GOP majority hasn’t been fiscal or conservative in the past 6 years.