It's all about the money.

In every presidential race since 1908, in which consistent, real (inflation-adjusted) annual disposable income growth was above 3.3%, the incumbent party holding the White House won every time. When income growth was below 3.3%, the incumbent party lost every time. Again, with redefinitions to the national income accounts in the last two decades, a consistent measure of disposable income as reported by the government has disappeared. Yet, even with official reporting, the current annual growth in real disposable income is at 2.2%, well below the traditional 3.3% limit.

Accordingly, odds are quite high that the numbers for 2008 will favor an incumbent party loss, i.e. a victory for the Democrats. Where I always endeavor to keep my political persuasions separate from my analyses, for purposes of full disclosure, my background is as a conservative Republican with a libertarian bent.

What follows or coincides politically with a hyperinflationary depression offers a wide variety of possibilities, but the political status quo likely would not continue. Times would be financially painful enough to encourage the development of a third party that could move the Republicans or Democrats to third-party status in the 2010 mid-term or 2012 presidential elections.


Interesting fact that is reported here as a consistent factor in every election. It tells me people can be seduced by sweet whispers in campaigns but wake up to the hangover of reality a few years later to realize things aren’t going so well.

I am reminded how Perot got 19% of the vote with some simple common sense charts. If Reps don’t get their act together and hang this disaster around the head of Obama and the entire left, there is risk/opportunity (depending how you look at it) of a third party in the next few years. It can happen as fast as a pointer stick, a few charts, and a little TV time.

“Billy Mays here for the new political party, OxyClean! Guaranteed to clean up government or your money back!”

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