Sunday, April 3, 2011

The 45th President

One of the correlations that was uncovered early on when socionomics was in its infancy is the correlation between the stock market and presidential election results. The stock market, in many ways, measures social mood fluctuations in real time, with bull markets resulting in an increasing positive social mood, and bear markets resulting in an increasing negative social mood.

Here's a chart of the DJIA from 1930 - 2011 with the election results added onto the chart.

There are a lot of observations that we make from the chart.

1 - At the lows of Supercycle wave (IV), Hoover was ousted in a landslide in 1932.
2 - Near the high of Cycle wave I (after four years of bull market), F. Roosevelt won a second term in a landslide in 1936.
3 - With Cycle wave III playing out, and the point of recognition reached in 1954, Eisenhower won a second term in a landslide in 1956.
4 - With Cycle wave III still playing out, Johnson wins a second term in a landslide in 1964.
5 - Nixon wins a second term in spite of a Cycle degree bear market in force. Nixon was fortunate that a positive social mood returned at the peak of Primary wave [D] when the election took place in 1972.
6 - Just two years later in 1974, at the low of Cycle wave IV and the fear of a depression pervasive in media and politics, Nixon resigned due to political pressure.
7 - In 1980, with a Primary degree bear market in force (Primary wave [2] of Cycle wave V) and a long recession, Carter was ousted in a landslide.
8 - With the return of a bull market, Cycle wave V of Supercycle wave (V), Reagan wins a second term in a landslide in 1984.
9 - Bush 41 is ousted in a landslide in spite of a bull market in the nominal DJIA in force in 1992. We were still in a Primary degree bear market in terms of the Value Line Index at the time.
10 - With the bull market still in force, Clinton wins a second term in a landslide in 1996.
11 - In 2004, Bush 43 wins a second term by a narrow margin. The stock market took a large dive in Cycle wave a from 2000 - 2002, and recovered much of the lost ground by the time voting took place in 2004.
12 - John McCain was defeated in a landslide in Nov 2008 as we were approaching the low of Primary wave [1] of Cycle wave c of Supercycle wave (a). Obama was elected by a large margin.

With this information on hand, we can deduce that bull markets result in landslide retentions and bear markets result in landslide oustings. This correlation stands the test of scrutiny when we look all the way back to the birth of the United States, and the correlation also holds in other nations as well. Social mood is a big part of the equation. In bull markets, voters want to "stay the course" as the leadership gets credit for continued progress and prosperity. In bear markets, voters blame the party and leaders in power for the hard times that are playing out as a result of the bear market, and thus adopt the mantra "throw the rascals out".

For example, in the 2008 presidential election, Bush 43 and the Republicans got the blame for the "Great Recession" and many Republicans were voted out of office. The result was Obama winning the presidency by a large margin and the Democrats getting a filibuster proof majority in the Senate and a large majority in the House.

In 2010, voters started to blame the Democrats for the "Great Recession". One would think that voters would remember how bad it was to have the GOP in charge in 2000 - 2008 and choose to keep the Democrats in power. Instead, many democrats were voted out of office and the GOP regained control of the House. Social mood was the reason for the outcome in the 2010 elections. All of this happened in spite of a Primary degree bear market rally still playing out.

If the voting patterns show one thing, it's the fact that people generally follow the herd when it comes to voting. People generally vote with their limbic systems (the part of the brain that induces herding) rather than their neocortex (the part of the brain that enables people to handle critical thinking).

With all of this in mind, it is possible to forecast future election outcomes through socionomics. Here is the forecast for future presidential elections:

In the 2012 election, Obama will win a second term by a narrow margin. The GOP will retake the Senate and increase their majority in the House. At that time, Intermediate wave (2) of Primary wave [3] of Cycle wave c will be playing out. Optimism should still be evident, but not at the levels achieved at the top of Primary wave [2].

In the 2016 election, voters will blame the Obama Administration and the Democratic Party for the "Great Deflation". At that point, Primary wave [3] will have fully played out, dropping the DJIA to 2185 and the S&P 500 to 218. Voters will be itching to vote the Democrats out of office as fast as they can at that time. All bets are off when we have 41% unemployment (U6) in the United States. We will be past the point of recognition and people will have realized that a major depression is in force.

This is how Sarah Palin gets elected as the 45th President of the United States. It won't happen because of the quality of her platform. Voters won't care if her platform is the right one or the wrong one for the country. Voters will elect her as an act of repudiation against the Obama Administration for having to suffer from the "Great Deflation". Sarah Palin will be the next President of the United States.

The Palin Administration Period would logically be associated with Primary wave [5] of Cycle wave c and it will start in 2017. In the next post, we'll examine that period in detail.

No comments:

Post a Comment