Howard Dean was in Boston yesterday and delivered his message in his typically and consistently humorless and confrontational style. Howard promised to continue his hard hitting and sometimes controversial attacks on the GOP. The Republicans of course are hopeful that Gov. Dean is true to his word. Every time Howard Dean makes irrelevant comments about how white the GOP is or how Christian or how much he hates them he draws attention from the issues that if exploited properly can return a Democrat to the white house in 2008.
Those issues should be as plain as the nose on Howard's face. Oil prices and interest rates are the twins of success for any Democratic hopeful. If made a part of a constant theme on the stump, hammering away at the negative economic impact on the average American, over the next several years any Democratic candidate (even John Kerry) can be formidable if not unbeatable in the next national election.
Interest rates and oil prices are the two items that cut across all lines of voter classes. Soccer moms with SUV's, Northeastern and Midwestern independents and elderly with oil heat, truckers and traveling salesmen, any manufacturers using petrochemicals, and anyone else who consumes energy are going to be enraged by $3 a gallon gasoline and $3 a gallon home heating oil. With oil passing $60 dollars a barrel this week it is entirely possible that these prices are around the corner. Howard Dean would due well to begin the chant that it is the policies of the oil men in the white house that have made this situation a reality.
Despite the fact that President Bush has little control over Alan Greenspan and his cohorts at the Federal Reserve, the blame for rising rates will be placed at his doorstep. Despite having raised rates 8 times over the past year or so it appears as though the Fed is still insistent upon maintaining a rising rate policy that if continued could conceivably invert the short term yield curve against longer term rates. This event has historically indicated the onset of a recession.
Even if monetary policy does not bring about recession there is certain to be near term repercussions from rising rates. Mortgages will become more expensive cooling the housing market and the existing interest only variable rate mortgages will rise steeply in monthly costs and will likely force marginal owners into foreclosure. This Sunday's Boston Globe reported a rise of 28% already this year in foreclosures in the Boston area.
A corresponding rise in the cost of consumer credit card debt is likely to bring about an increase in personal bankruptcies and with the new laws in this area favoring the credit card companies it will be hard for the Republicans to escape this voter wrath.
The question of course remains whether or not the Democratic party can find a consistent strategy and stay on message. Up to this point Governor Dean has been unsuccessful.
