TJP

Pundits and Republicans, alike, are betting that “enthusiasm” wins elections. But, does it? It is my belief that there is little, if any, correlation between Democrats voting and their enthusiasm. Most Democrats know beyond doubt that Republicans obstructed their mandate, and hence will not reward obstructionists by not voting.

Moreover, Democrats knew that the process of change would not be easy; that those that want to maintain the status quo would resort to political trickery.

So, on November 3^rd when the Democrats perform far better than pundits expected, what will they say? That the methodologies used to sample voters failed to include potential cell phone voters? Clearly, pundits will have plenty to say, they are never silent.

What is important, however, is the path forward for Democrats for the next two years, and it should not include the false choice of bipartisanship.

Mr. Obama has to recalibrate is approach to governing and frankly change his financial team. Furthermore, he has to recognize the importance of monetary policy in creating a healthy economy and reducing unemployment. Thus, he has to ensure, with Democratic allies in Congress, that the Federal Reserve expeditiously performs its duty of creating full employment while controlling inflation.

Additionally, the Democrats have to realize, or at least consider, that many banks withheld credit for political reasons. Thus, as in a chess game counter moves by Democrats should be forthcoming, such as limit on credit cards interest rates, bank fees, repeal of interest payment on reserves, and so on.

More importantly, automatic mechanism should be set up for those instances when the banking system capriciously withhold credit for political purposes, creating liquidity problems for the economy. In these instances, the government should  immediately become the lender of last resort.

This can be accomplished by creating an emergency federally sponsored credit agency that could directly provide liquidity when the banking system cannot, or is influenced by selfish political motives.

Federally sponsored credit agencies are financial intermediaries established by the federal government to supply credit for certain economic purposes, in this case for reducing unemployment.

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