Negativity sells, so brace yourselves for a torrent of pre-election rhetoric designed to convince voters that things are sure to get even worse.
The demagoguery is bi-partisan.
While the Republicans have scared voters about inflation, huge tax hikes and an economic collapse, the Democrats are no slouches, either — and they're about to haul out the ultimate pre-election boogeyman: Warning voters that their Social Security is about to be cut.
The late House Speaker, Tip O'Neill, said it best: Social Security is the third rail — you touch it and you die. Nevertheless, some Republicans have dared to address the issue, and it could hurt them.
Rep. Paul Ryan (R-Wis.), is a conservative favorite, brimming with outside-the-box ideas to help revive the economy. While Ryan's colleagues love him, only 13 GOP House members have dared to endorse his agenda, which includes partial privatization (and some potential benefit cuts) for Social Security.
House Minority Leader John Boehner (R-Ohio) made the mistake earlier this summer of stating the obvious — that eventually Social Security will have to be reformed. But Boehner and Ryan generated disapproval from many of their colleagues, who worry that Democrats are poised to pounce on the issue.
Most Republicans question why they should declare now — before the election — that Social Security should be reformed. Most politicians want cover, so they prefer to wait until the Deficit Commission issues its report in early December; Social Security reform almost certainly will be a key recommendation.
But the cat is out of the bag, which means people like my Mom will be scared this fall over charges that her Social Security will be cut.
This isn't the only issue that will be demagogued this fall.
The right wing blogosphere is ablaze with paranoid rantings about what might happen in a lame duck session of Congress — immigration reform (with amnesty), cap and trade, the card check bill for organized labor and, of course, massive tax hikes.
Except there's one problem — all of these provisions would require 60 votes to pass in the Senate, and there's no chance that could happen.
I keep thinking how these reckless comments disturb people like my Mom.
For the past few years she heard radio talk show hosts warn about impending hyper-inflation, but now there's a risk of deflation. She heard that deficits would drive interest rates higher, yet the exact opposite has happened. She heard that the economy was tanking, and like millions of Americans, her confidence wavered — and the economy indeed has softened.
The pervasive negativity and distortions — spewed by both parties to advance their causes — often has a corrosive impact. It can be a self-fulfilling prophecy, and now the electorate is plenty scared — even though the worst recession in 80 years lasted only a few quarters.
There are plenty of positive stories — the stock market looks decent, the Gulf oil well has been capped, most businesses are highly profitable and flush with cash, etc. — but good news doesn't sell, especially as an election approaches.
Greg Valliere is Chief Political Strategist at the , a Washington-based firm that advises institutional investors on how government policies affect the markets. Greg has covered Washington for over 30 years, starting his career as an intern at The Washington Post, then co-founding The Washington Forum in 1974 to bridge Wall Street and Washington. He has held several positions, including Director of Research, for Washington-based firms, including the Schwab Washington Research Group. Greg is an exclusive commentator for CNBC-TV, where he appears regularly on most of the network’s programs.