The American conundrum or just plain stupidity?
November 17, 2014

The American conundrum or just plain stupidity?

The American economy is doing better than  ever and every day we learn that a new record has been set: it is doing better than all other developed countries; October was the 49th month in a row with job gains, making it the best run since WWII; unemployment fell to 5.8% and labor participation rose. The number of bankruptcies dropped to its lowest since 2007; the deficit shrank, inflation is very low and GDP is growing at a 3, 5% rate. Gasoline prices have declined a dollar per gallon, which puts more money in the hands of the consumer. That is why consumer confidence has risen to its highest level since July 2007 and retail sales are climbing. The S&P 500 almost triplicated since 2009. Despite all that, the Democrats lost the midterm elections. How do we make sense of that?

There was a lot of talk about how the electorate was older and more white, how the democratic constituency didn’t  turn out to vote in the midterm elections, how the democratic party was not able to galvanize the electorate, how the Republicans outspent the Democrats. I will leave that analysis for the political scientists and strategists.  The way I see it, the Democrats lost because they distanced themselves from Obama rather than embracing his record.  Instead of defending the government’s policies, which are working despite the sabotage of the Republicans, they decided to separate themselves from the President. The Democratic candidate running for the Senate in Kentucky refused to divulge whether she voted for Obama. That is plain stupidity: nobody would hold that vote against her as he is the leader of her party. However, not admitting it didn’t looked right. At one point she looked like a contender but she ended up losing big.

It is true that the recovery hasn’t reached everybody and wages are lagging. It is true that inequality has increased but it is also true that those against the increase on minimum wage are the Republicans. When asked directly, the electorate in Republican states voted for an increase in the minimum wage: in Nebraska, it won by 30%, in Alaska by 37%, in Arkansas by 32%, in South Dakota by 18%.

Another interesting point is that at least 5 Senators who have strong views against abortion were elected. At the same time, in two states where the voters were given the chance to answer directly if they were in favor of personhood, which is a radical anti-abortion legislation, they vote against it.

The governors of Connecticut and Colorado- where there were massacres (Newtown and Aurora) in recent past- had to fight against the NRA lobby and won. Both governors, who are in favor of gun restriction and back ground checks, were reelected. There were other good victories also in Florida, Nebraska, and Arizona where radicals with policies against woman and gays and the government lost.

So although the Republicans won, there were also small victories, my favorite being that Scott Brown lost in New Hampshire. He now has the record of having lost twice to different women. Let’s celebrate.

I defend a subtle distinction in the midterm elections: the Republicans didn’t win, but rather the Democrats lost.  President Obama, talking to press right after the debacle, summarized the message that should have been the mantra of the democrats campaign:  “our country has made real progress, more Americans are working, unemployment had come down, manufacturing has grown, our deficit had shrunk, our dependency on foreign oil is down, as our gas prices, our graduation rates are up, our economy is outpacing most of the world, but we just got to keep adding until every American feel the gains of the economy”. I wonder why the Democrats didn’t want to put these facts on their ads.

The Republicans on the other hand, used the most penetrating message for Americans: their fear. Republicans won by exploiting Americans’ fear of Ebola and ISIS. The 1/3 of the electorate who went to the polls voted to keep terrorists out of the US homeland making judgments based on Republican messages and advertising that ISIS was on the verge of invading the US. They won exploiting Ebola; they won with the message that the USA would be the next West Africa- with hundreds of people dying from Ebola. These messages resembled the days when Republicans used to say- in regards to the deficit- that the USA would be the next Greece.  It doesn’t matter that less than 10 people so far were diagnosed with Ebola and are in good health, back to their normal life, except one that was misdiagnosed. Republicans spent months terrorizing the country and it worked. Americans are so, so gullible…. it doesn’t cease to amaze me.

Democrats should have seen the recent election in Brazil and learned something: although in Brazil a lot of people think that the country is going in the wrong direction- a feeling shared by Americans in regards to the USA- Dilma was reelected just by repeating that unemployment was the lowest in history and the minimum wage was the highest. It didn’t matter that there were no economic growth and inflation was high; she just focused on that one message and kept repeating it. The democrats could have done the same, just picking unemployment and economic growth for instance, and ran on it. Instead they let the Republicans run on Ebola and ISIS.


November 23, 2015
Much ado about nothing
October 27, 2015
Brazil, we can only pray (or hope)
August 18, 2015
Looking back, looking forward
June 30, 2015
Lack of good news
April 14, 2015
What if...
February 24, 2015
What to expect in 2015
October 27, 2014
What is next?
September 09, 2014
Lessons we should have learned
August 12, 2014
US and Brazil: 2014, what to expect next
June 26, 2014
Headwinds ahead but still optimistic
April 26, 2014
Roller Coaster
March 14, 2014
Brazil in perspective
February 07, 2014
Stay the course. Change the course.
January 17, 2014
Diversification. Or not.
November 25, 2013
Who buys a US$ 500 pillow?
October 02, 2013
September 03, 2013
What a mess...
July 31, 2013
Of Protests and Stocks
June 19, 2013
Betting in the future
April 30, 2013
Nowhere else to go
March 26, 2013
Cyprus: not enough to stop the US market
February 25, 2013
The Sequester
January 23, 2013
2013: what is ahead for investments
December 07, 2012
Brazil: uncertainty and mixed signals
November 05, 2012
It is not about the economy!
September 20, 2012
The Country is better off
July 05, 2012
The New Normal
May 30, 2012
Half empty, half full
April 30, 2012
How to restore prosperity
April 21, 2012
Brazil became poorer
February 27, 2012
Romney, Obama and the American Imbroglio
January 25, 2012
On storms and calmness, waiting for next round
December 22, 2011
Happy Holidays!
November 23, 2011
Impasse and Paralysis
October 24, 2011
The rally has legs. Or not
September 23, 2011
Preparing for the crisis
August 24, 2011
Kicking the can down the road: is there an end in sight?
July 24, 2011
Can the politicians be rational?
June 24, 2011
Global Economy: where are the world leaders bringing us?