In response to:

Why the Obama Bubble Still Hasn’t Burst

verist Wrote: Oct 08, 2012 9:59 PM
2 things have always concerned me. First, in Presidential Elections the electorate votes their generation. Since 1860, the president elect has been younger than his predecessor, with 2 exceptions. 1, Harrison defeated Cleveland. He lost the popular vote, but won the Electoral College. 2, Reagan defeated Carter with 18% interest rates and "America Held Hostage". Second, 1936. FDR had a worse economy but the Depression started after 12 years of Republican rule. Some economists point out that the Stock Market bottomed out in July 1932 and the Depression was over by March 1933. However, full employment was slow to return and FDR's shifting policies made business cautious about hiring, much like today.
Ross83 Wrote: Oct 08, 2012 10:22 PM
The depression was largely caused by terrible Federal Reserve Policy. They raised the discount 12 times in the months prior to the crash. It seems they were confused by the difference between real and nominal interest rates, and to raise interest rates they contracted the money supply. Nominal rates hovered around 0 but the real rate was very high. The Hoover administration did indeed try very hard to pump cash into the system but they were blocked at every turn by the Democrats who saw an opening for Roosevelt. In the mean time people were out of work. Roosevelt's policies helped a little but not nearly as much as the hype. Unemployment did not go down a lot until the war when it was a total effort.
Ross83 Wrote: Oct 08, 2012 10:24 PM
and people were very willing to sacrifice all for a war that had to be won. But it did transfer a huge percentage of the country's wealth and assets to the government.

Can there be political bubbles like financial bubbles?

Financial bubbles, inflated by hopes and dreams, burst when reality negates any possibility that those hopes and dreams will be realized. At that point, sky high stock or bond or real estate prices come crashing down to earth.

Can the same thing happen in politics? Can a skilled politician, who has become popular with soaring rhetoric and promises, deflate when it starts becoming clear that he is not going to deliver?

Of course, I am thinking about our president.

Mitt Romney demonstrated in the first presidential debate that the considerable gap...