Tuesday, April 19, 2011

Drama in Wisconsin

There continues to be a lot of drama in Wisconsin, with enough signatures secured to recall four of the eight Republican state senators that voted for Gov. Scott Walker's anti-union legislation. The updated information is here.

Earlier, there were massive protests in the state in response to the anti-union legislation. Detailed information about the Wisconsin protests can be found here.

Protests are characteristic of bear markets of at least Cycle degree. Even though a Primary degree bear market rally had been unfolding for the last 2 years, protests still erupted in Wisconsin in response to the anti-union legislation as people fight for their livelihoods. As the days and weeks went by, protests increased in magnitude in Wisconsin and spread to Indiana, Ohio, Florida, Michigan, and even Idaho.

Then there is the issue of political polarization as well. Gov. Scott Walker stubbornly refused to negotiate even as Democratic state senators valiantly attempted to keep collective bargaining rights intact. When negotiation efforts failed, all 14 of the state Democrats fled to Illinois to stop the anti-union bill by denying a quorum. This speaks of increased polarization not just at the federal level, but at the state level as well, as the GOP accelerates farther to the right.

There is a lot of anger in Wisconsin, and it's going to be expressed somewhere. Expect the Republican state senators that are targeted for recall to get thrown out of office by voters. Expect Gov. Scott Walker to get thrown out of office in a recall election next year. There is something to be said about a mass recall that is unfolding, which has never happened in the entire history of the United States. By the time the actual recall elections in Wisconsin take place later this year, Primary wave [3] down will be underway, meaning that there will be a rapid increase of voter anger and an increased willingness to express that anger as social mood goes south.

In terms of the larger picture, we are seeing austerity measures being implemented at the state level in Wisconsin, Michigan, Indiana, Ohio, and Florida. When austerity measures were implemented in Greece and Ireland in May 2010, mass protests and demonstrations followed as people fought for their livelihoods. We have seen a repeat of that scenario in the United States at the state level in the last couple of months.

Considering that we are still in the early stages of a Grand Supercycle degree bear market, the drama in Wisconsin and elsewhere is likely just a teaser-trailer preview of what is yet to come as "The Great Deflation" continues to unfold in earnest. Expect the same type of austerity measures to be implemented at the federal level in 2017, which will be followed by social unrest, protests, demonstrations and labor strikes of unprecedented magnitude.

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