Predictions for 2008:
Really, wild guesses and speculations:
(1)John McCain recovers to win the Republican nomination.
(2)Ron Paul does better than expected, and is one of the last three candidates left in the race. He then runs a third party campaign, drawing enough support from McCain, especially in the Mountain States, to throw the race to the Democratic nominee.
(3) The U.S. will enter a recession in the third quarter of 2008
(4) which will also be the bottom of the housing market in nominal (but not real) price terms.
(5) There will be a surprise Supreme Court vacancy.
Check back in December 2009 to see how I did.
1. I agree it is perfectly plausible for McCain to get the Republican nomination, and it is smart to point that out now. Good prediction!
2. Don't know enough to say what Ron Paul might do, but we have seen that he can steadily raise money and he certainly will have the ability to keep himself in the race, inside or outside the Republican party, for as long as he wants.
3. I do not think a recession is likely in the coming months, because I do not think the housing market or the credit crunch are having that big an effect on the overall economy. As Mickey Kaus pointed out in the last day or two, a deflation in house prices actually brings real buyers into the market who had been priced out. So I think this "crisis" is pretty quickly self-correcting. I also think the economy absorbs blows more easily and bounces back more quickly than it did even 20 years ago - this is the flip side (and silver lining) of the constant economic uncertainty about which people justifiably complain.
4. Who knows when house prices will hit bottom? David is brave to make this prediction, but timing predictions are especially hard. Robert Schiller is celebrated for accurately predicting the end of the dot-com boom, but he was at least a year or two off.
5. I'm going to go even further and suggest it will be Ruth Bader Ginsburg who leaves the Court in 2008. She seems to be chafing more than before at the Court's orientation.
>poll
I used to think McCain would lock up the Republican nomination, but I think I underestimated the red base hostility engendered by McCain's positions on immigration, campaign-finance reform, taxes, and a few other hot-button issues. Even with the recent surge, I still read a McCain victory as unlikely.
The Republican nomination is still Giuliani's to lose, with Romney and Thompson (I hope I hope) the only others with a realistic shot.
Given people's expectations, this is a fairly safe bet.
Actually, Paul does not even have to go to third party status, his supporters will write him in.
You might want to push the clock back on this one. Prices would have to come down quite a bit in that time to signal a bottom and further there is too much inventory to get through. If it were just "subprime" you might be good with that estimate but this year we will realized that there are a whole host of other bad mortgages out there (option arms, alt-A, jumbos, and other hybrid arms). Really too a good portion of prime loans are already "bad". Let’s add credit cards and auto loans to that deflationary pile.
Of course your prediction leaves open a long period at the bottom with flat prices (or as you suggest appreciation equaling inflation). I just don't know if they can get the money into the market like that to save housing prices in such time (nor would it be a good thing). People tend to hoard the money for other things like paying down debt in situations like this. Also the responses from the gov so far have all been in the wrong direction for a fast recovery. The things they are doing are to delay the inevitable and save some banks, not much else.
Uh, I think you meant to say that in the third quarter of 2008 the ministry of propaganda will revise it's bogus numbers to reveal that we had entered a recession in the third quarter of 2007.
For those interested in more honest aggregated economic data, check out John Williams' Shadow Stats.
So, because of unusual financing conditions, there was a huge increase in demand where more people mortgaged more expensive homes and multiple homes speculatively; more new homes were then built in response, causing what is now a glut of supply.
See, for example, New York Times Case-Shiller graph and blog summary of house ownership.
Without these financing conditions, housing prices will go down, and stay down, near their historic real levels. Foreclosures are currently and will further increase as millions of mortgages reset to higher rates many of which exceed the debtor's income (See chart from IMF). Financial portfolios that hold mortgage-backed securities, including pension plans, municipal bonds, and bank investments, and commercial loans, are then devalued (e.g. Florida Local Government Investment Pool; bank writedowns; municipal bond insurer; E-Trade, example of a 75% devaluation of mortgage-backed securities; "Asset-Backed Commercial Paper Shrinks for Fifth Month"). The cause of these devaluations are defaulted and potentially defaulting mortgages, and there are an even greater number of mortgages under novel investment schemes that have not yet reset (e.g. above reset dates and Bloomberg article.
In addition, an increasing number of millions of people have a negative net worth—a number increasing further because of decreasing housing prices—and the consumer spending that makes up 70% of the U.S. GDP is partly financed by home-equity loans. So, consumer spending decreases (e.g. AP article on low holiday spending).
Also, this is not confined to the United States. See, e.g., "Subprime virus infects one and all", "Company Bond Sales Fall in Europe, 1st Year Since '02", "Housing market concerns spark hopes of rate cuts", "Economists warn of UK ‘stickyflation’ next year", "U.S. subprime problems causing woes in Europe, too".
FWIW, if you look in in the VC archives, you will find that I did predict in Spring '05 that the bubble was in it's last few months, and I was right. But I was pretty confident of that prediction, I'm not at all confident predicting the nominal bottom a year out.
And you might as well predict that Hillary will get the nomination, and will choose Bill as her running mate. (She's from NY, he's from Arkansas. And the 22nd amendment only prohibits a person from being elected to the office of President for a third term, it says nothing about becoming vice president, or then taking office in succession.)
If the economy goes into a recession in 3Q 2008, we won't know it for some time.
Rasmussen did a poll with Ron Paul running a 3rd party campaign, according to them, he pulls more votes from the Democratic party.
Quite possibly, because Paul will be the only true anti-war candidate in the race.
As long as the situation in Iraq continues to improve, the Republican nominee will vow to stay the course. The Democratic nominee will make some noises about "bringing the troops home," but won't be foolish enough to promise a substantial drawdown when the surge is working. That leaves Paul as the only candidate for the substantial portion of the population that wants to get out immediately.
I'm fairly sure that the vice-president has to be eligible to be elected president (age, citizenship, etc.), which would preclude Bill.
I noticed the Rasmussen people did two polls: one Clinton vs Guiliani vs Bloomberg as an independent. Bloomberg got 11%. The other was Clinton vs Guiliani vs Paul as a Libertarian and Nader as a Green. In this 4 way race, Paul polled 8%, about 10X more than any LP candidate in the past. I'm sure if he ran as an independent, he'd get more votes than the 11% Bloomberg racked up. Bloomberg is not well known and his stances on the issues even less so. That implies 11% is a baseline protest vote. Add in the actual Paul supporters, and its a significant (though not winning) percentage.
The 12th amendment says: "no person constitutionally ineligible to the office of president shall be eligible to that of vice-president."
At that time, the eligibility requirements were 1) natural born citizen, 2) 35 years old, and 3) 14 year U.S. resident.
Certainly, at the time of the ratification of the 12th amendment, nothing precluded any former president from becoming vice president.
The 22nd amendment says: "No person shall be elected to the office of the President more than twice...(and the other stuff limiting an unelected president who has served more than two years from getting elected more than once.)
If Bill ran as Vice President, he wouldn't be elected president more than twice. He would have been elected president twice, and vice president once. So the 22nd amendment doesn't apply. I don't think there is any other way of reading the text, but you could make some extra-textual arguments that the ratifiers of the 22nd amendment didn't foresee something that absurd, so they didn't put the exact circumstance into the text of the document. Instead, we should interpret what is said according to its "spirit."
BTW, even if Bill ultimately could not qualify for the office of President, that shouldn't stop him from being vice president. He could still fulfill those constitutional duties. Whether he was eligible for the office of president should not be ripe for decision until something brought the succession into issue.
I guess it comes down to the meaning of "constitutionally ineligible" in the 12th Amendment. Is Bill Clinton constitutionally ineligible because he was elected twice, both times after the 22nd Amendment was enacted? Or is he still in some way "eligible" to be President even though the 22nd Amendment precludes him from running for President.
Oops. Looks like Chelsea isn't old enough yet.
I agree that you have stated the issue correctly. Keep in mind that nothing in the 22nd amendment prevents Clinton from running for President. It prevents him from being elected to the office of President.
The electors are the electoral college. As a Constitutional matter, someone could run for President and nothing would be wrong, unless the electoral college elected him. Conversely, its theoretically possible for every member of the electoral college to go rogue, and unanimously vote for Bill. In that event, the 22nd amendment would presumable void the election by the college.
As for the 22nd amendment, it could easily have said that no person is eligible for the office of president after serving two terms, etc... Instead, it said that no person could be elected to the office. There are other ways to become president than be elected, and these ways were well known, as the succession had happenned several times. In my opinion, the amendment should mean what it says. And it looks like it was poorly drafted. Likewise, the amendment gives Congress the power to determine who is next in line if the Vice President can't succeed to the office. I don't see any reason why Congress couldn't pass a law saying that the next in line should be the living ex-President who most recently served.
That said, I don't think my prediction has any more chance of coming true than David's. It would be political suicide. And, instead of this preposterous scenario, I kind of like the idea of Hillary getting revenge on Bill by appointing him to the Supremes instead. He couldn't turn it down, and the cloistered life of a justice would probably kill him in short order.
Ron Paul is the darling of Stormfront and the antiwar movement. The former likes his stances on "globalism" (defined on Ron Paul's site here), welfare statism, illegal immigrant amnesty, and hate crimes laws. Libertarians and conservatives who look at such issues through the fair-play lens and not the racial-class-warfare lens tend to disagree with him fiercely on other issues, particularly his pet issue of war policy. Likewise, many (probably most) of those drawn to his antiwar stance have a cranked-to-eleven allergy to his fiscal policy.
As Libertarian Party candidate, he got 0.47% of the popular vote, so the only way to go is up. But how far? Paul alienates almost everybody with his fiscal libertarian/antiwar combo - he's firmly grasped a third rail of each the left and right. I certainly don't see how he can get any Mountain state traction with his war stance.
If Paul goes third party, the blogosphere will not let people forget about his photo-op with Stormfront founder Don Black (LGF has the pic).
I figure it's an 18th century grammar thing: "constitutionally ineligible to the office of president" isn't complete. It should say "ineligible to be elected to the office", or "ineligible to serve in the office".
I've always wondered how the two years in XXV are reckoned. Suppose a 1-term former President is serving as Vice President. Suppose he assumes the office of President on a date after two years before the Electors will meet but before two years before Inauguration Day. Is he eligible to be elected?
If we accept Duffy's interpretation, and use the legal fiction I proposed, this immensely popular former President can keep getting elected Vice President and then immediately stepping down.
I wouldn't have thought it possible: FDR was an anomaly and a break with tradition dating to Washington. He got re-elected because he was seving during crises. Under most circumstances the people wouldn't want to see Presidential power so concentrated. But that didn't seem to have stopped George the Younger nor Hillary. Worst case would be a repeal of the Amendment XXII.
As for Ron Paul keeping Stormfront's money, he hasn't returned my money either. The man is obviously a whore. (LNC seems to be supporting Paul in NH, to the consternation of at least one candidate who is still a member of the Libertarian Party.)
It's actually a vocabulary thing. "Ineligible" in the 12th Amendment must be read as "unable to be elected," because that's what the word means. From Lat. eligo, "to choose, select," which is also the source of "elect."
An even bigger scandal, I believe, is that Paul's campaign did not tweak the campaign website to block referrals from Stormfront.org to prevent online donations originating from Stormfront, once it found out about those donations.
Anything that boosts Don Black's name recognition doesn't help the Ron Paul campaign.
Ron Paul is still a member of the Libertarian Party. (He's a Lifetime Member of the LP.)
Ron Paul also makes the quite-logical argument that Don Black's money has already been spent. So giving Don Black $500 (of someone else's money) is just giving a bad man $500 to do bad things. Much better that the money be spent on spreading word of the benefits of liberty.
He has also been quoted as saying that racists who give him money are wasting their money because he totally disagrees with racism, to him its a form of collectivism, and he is all about individual freedom, equality, liberty, etc... He has stated this principle many times.
Plus, he doesn't rely on corporate donors and PAC's a whole lot, and will take money from anyone anywhere anytime so he can operate on a more even level with the mainstream media approved top tier corporate-whore candidates. In fact, I do believe his online supporters are engineering another money bomb to honor the late great Dr. Martin Luther King, Jr., which may not register high among the extremely small percentage of RP supporters who are neo-nazi or Stormfront types.
This whole thing stinks of a smear, and since most people can't attack him or his record personally -and since most journalists haven't the foggiest clue about the federal reserve/economics or the difference between non-interventionism and isolationism, etc... they go after the fringe of his support base. Sad really. But quite predictable.
Weren't you also making that prediction in 2004 and maybe 2003 as well?
Nick
As to the eligibility thing, correct me if I'm wrong, but (in theory) couldn't a two-term president run for Congress, eventually become Speaker o' the House, and then succeed to the Presidency upon the deaths of the President and Veep? Doesn't that mean that he's eligible for the Presidency?
I don't buy the Latin argument, since words have meaning in English apart from their etymology.
As for the argument that someone could repeatedly run for Veep and repeateedly succeed to the Presidency upon the President's resignation: Yes, that's a consequence. But I fail to see how it speaks to the issue or implies that the argument is wrong.