So, the big event has arrived, and rather than using it as pretext for political diatribe, I’ll invite you on a journey through my past.
I was a little shaver when the convention came to town, and it came amidst a torrent of troubles. The party’s incumbent was floundering. There was deep political unrest that threatened to upend the whole shindig. A good bit of it was race related. A handful of months earlier, the country’s leading civil rights activist had met with a violent end. It was all a hot mess, with the only certainty being that one way or another, the country was going to inaugurate a new president the next year, as the prevailing office holder, though eligible, had decided not to run.
But memory dims, so, many of the doings in and around the Republican National Convention of 1860 resides in my brain’s geriatric haze. I do recall, though that while it took several ballots, the delegates eventually settled on an obscure Illinois favorite son named Abraham Lincoln.
One other fact prevails, which I will never tire of sharing with anyone willing to listen. That convention was catered by a company called David Berg, Inc. – primarily a purveyor of kosher hot dogs. A couple of generations later, Mr. Berg sold the enterprise to my maternal grandfather and his brothers, who held it, fought over it — until 1992, when their progeny sold it to the much larger and presumably more civilized Vienna Beef Products. My branch of the family had been swindled out of its share in the 1950s, so I had no (hot) dog in that fight.
Longtime local and family legend has it, though, that a) Abe himself sampled the fare; and b) it was during the convention that the longstanding, solemn rule that prohibits the application of ketchup as a hot dog condiment – at any rate in the Chicagoland area — was established.
(But I often confuse this affair with one held 20 years later, in the same venue, where they continued to serve Berg Dogs and debated Race and Reconstruction. Another incumbent was bailing, and my old commander/cousin Ulys was spoiling for a comeback. It was not to be. After 40 ballots, they selected an obscure congressman from Ohio, who became one of my heroes).
Sharp-eyed readers will have noticed that I tried to slip a fast one in there. The setup is, for the obtuse, intended to evoke images not of 1860, but rather of 1968. And the parallels are striking. Race was front and center both years. But the differences are illuminating as a point of contrast if nothing else. It was a Dem, rather than a GOP event. The murdered civil rights activist was not John Brown – but rather Martin Luther King, Jr. The nominating process was geared towards replacing not the inept James Buchanan, but rather that ol’ polecat Lyndon B. Johnson, who, like Buchanan and perhaps wisely, had determined that he’d had enough of the job.
And now, we wind the clock forward to 2024. And another political extravaganza in the Windy City. Here, too, comparisons are enlightening. The party’s incumbent/erstwhile presumptive nominee has again withdrawn from the proceedings – if not by choice at any rate in advance of the national gathering.
Its selection for a replacement, as was the case in 1860 (John C. Breckenridge) and 1968 (Hubert H. Humphrey), is the sitting vice president. Notably, in each previous instance, the Chosen One lost in the general election, and, in the case of Breckenridge, shortly thereafter renounced his citizenship, and accepted a post as a general in an army that soon declared war on his country of origin.
Now, I’m not here to suggest that should Kamala lose, she plans to take up arms against the United States, but she and her cohorts are certain to be beyond miffed at the tidings, and, likely, we will all bear the brunt of her/their womanly ire.
What we get if she wins is only now coming into focus. We’re gonna make food affordable by establishing price controls. We’re gonna pay people for having children, pay them not to have children, build them houses, and pay them to buy the new dwellings. And, of course, we will do it all by increasing taxes on those who won’t notice.
I’m sorry, my sweets, but this is simply bad economics. If the government further inserts itself into our affairs by fixing prices and profits, subsidizing both the construction and acquisition of residential dwellings, enters our reproductive bedrooms, hires and pays our babysitters for us – all on our own dime – we end up with both fewer options and fewer resources with which to attack our challenges.
It was ever thus. So sayeth this century-and-a-half convention goer/product of the Chicago School of economics.
The proposed capping of food industry profits is particularly galling. Not too many financial masters of the universe have issued from that quarter in ages. K wants to ensure this remains the case, by limiting their upside. Among other problems, though, I have with this is a lack of understanding as to her plans for the downside. What if their input costs rise, their selling prices drop, reducing both their output and their ability to retain the service of their workforces (hardly a herd of sheiks themselves)? She got any programs to ensure their continued viability? For faltering food companies and farms causing unemployment and empty store shelves? If so, I ain’t heard of them.
And if she loses, the White House will take over the Federal Reserve and, through tariffs, the purchase foreign-made goods will be rendered incrementally less affordable.
Here’s hoping that they at least carve out Chinese-produced pharmaceuticals, because without full access to reasonably priced Xanax and Ibuprofen, well, let’s just say you might not see or hear much from me.
But the markets don’t seem to give a care. Last week brought about a rally robust enough to bring tears to the eyes of all flesh-and-blood well-wishers. Each and all the Mag 7, as led of course, by our fearless, bloodless leader: the pre-earnings NVDA and extending to back benchers NFLX and TSLA regained the full measure of their vigor.
Outpacing them all is glittering Gold, which closed at an all-time high on Friday – as part of a move that came at the expense of the Almighty Dollar, which – NGL — has experienced better rolling months:
The general theme here is thus to shed dollars in favor of other assets with presumably more favorable fortunes. There are worse trends to endure, but the eschewing of the Dead Prez – including Lincoln but explicitly non-inclusive of Buchanan or Johnson, is not costless. Makes my huffing of Xanax/Ibuprofen a more expensive enterprise for one thing – and that’s before any new Orange Tariff regime comes into play.
Part of the dumping of the Benjaminz is owing to expectations of lower interest rates across the foreseeable horizon. This is probably a good bet.
If we somehow manage to survive the DNC, we may obtain incremental insight on Friday through the auspices of Jackson Hole. I retain my hunch that the Fed will make a big, dovish policy statement during those proceedings. However, those paid to make these prognostications believe that the fully priced-in rate cuts will commence a few weeks later – at the September FOMC summit.
Well, maybe they won’t cut rates at J-Hole, but they could, instead, do something at the long end of the curve. At the end of the day, it matters little. The Fed will almost surely lower rates ere the quarter ends, goosing the economy into the final stretch of the election season.
It all makes me rather serene about short-term market risks. But these here conventions are dangerous affairs. We all know what happened to Lincoln, and it was the same deal, in quicker fashion, for 1880 winner – the magnificent if forgotten James Garfield. In 1968, RFK got taken out before the first balloon had dropped inside the International Amphitheater. And one cannot help but note the verisimilitude associated with his son/namesake hovering outside the proceedings.
David Berg, though, is no more. It survived and thrived during World War shortages largely because my granddad played cards with the Swifts and the Armors. They didn’t have government-imposed caps on their profits back then and did pretty well. But they couldn’t endure the squabbles that carried forward into two subsequent generations of family infighting.
To my knowledge, Vienna is not catering this week’s festivities, as the host organization frowns on the consumption of their products. However, if you’re planning on attending and decide to choke down a dog, please, as a matter of basic risk management, hold the ketchup, because if you can’t do this, I fear I am unable to help you in any way.
TIMSHEL