Do not choose to be wrong for the sake of being different.
Lord Samuel
Aren't They Cute?
So are their kids... Well, maybe not their first one. I've been told that he's a piece of work. But sometimes in life you get second chances (in this case, a half dozen).
First Round of French Presidential Elections:
Incumbent Sarkozy Makes the Runoff As An Underdog
Make no mistake: this Franco-American wants second-place center-right incumbent Nicolas Sarkozy to win the runoff in 2 weeks against today's first-round winner, socialist Francois Hollande, running an Obama-like campaign. Sarkozy lost by about 3 points. At least in American politics, Sarkozy's net disapproval rating (with an approval around 40%) for an incumbent would mean that he's done--especially with a first-round apponent with an almost mirror-image net approval rating and a general dissatisfaction with the economic malaise in France. Sarkozy faces the same problem any responsible incumbent would: he has to be hard-headed and push for fiscal discipline and a globally competitive developed economy. France, like many European countries, is paying a stiff price for an unsustainable safety net and mediocre economic growth; for better or worse, their best chances for improved economic growth rests on market-oriented solutions. Hollande's policies, like Obama's, would strangle economic growth and, at best, continue a sticky high unemployment problem.
In theory, the far right, with its 20% share of the vote, and another 8% or so for a centrist candidate, with Sarkozy's first round of 25-27% would overcome Hollande and his Communist allies. Still, I don't like Sarkozy's chances here; his attempts to reach out to the right have not been successful; how can he close a gap against Hollande which has persisted for months? What would I do if I was in Sarkozy's position? (Keep in mind I couldn't get elected dog catcher. In fact, I'm sure if I did run, my opponents would discover that I supported Romney, and they would then run ads with the pictures of kennels perched on animal control vehicles!)
First, I think that he needs to drive up Hollande's unfavorables. He should point at Hollande as a disingenuous politician as usual whom will say whatever he thinks the public wants to hear to get himself elected. If I was Sarkozy, I would point out Obama made similar type promises, and four years later the US has the lowest labor participation rate in 3 decades--lower than when he took office in the midst of a recession. Sarkozy needs to make the case that Hollande's policies will make the picture of economic growth and jobs even worse. He needs to link Hollande and the Socialists directly to the government policies that are hurting the French economy, and more of the same will mean more of the same misery. There are no easy answers, but Hollande's policies will bring France ever closer to its day of reckoning.
Second, I think he needs to appear chastened by the election results, admit that he's made some mistakes and has learned from them, and promise that he'll be a better President if given another opportunity.
Third, I think he has to play the incumbent/experience advantage to the hilt: he has got to play up the uncertainty of a Hollande presidency. Sarkozy needs to drive home the point that the French people know him; whatever his weaknesses, they know where he stands, how he stands up under difficult times. Who is Hollande? What has he ever done that establishes that he has the right stuff to be President? Keep in mind these are dangerous times in Europe. Sarkozy has a good relationship with European leaders. This is not the time to gamble with the future of France and the European Union at stake...
Joe Kennedy Wants To Constrain Oil Speculation;
I Want to Repeal the Onion Futures Act
During the Eisenhower Administration, a couple of onion traders manipulated the market in the Chicago area; they had purchased millions of pounds of onions while selling onion contracts at then good prices for unions (a hedge against price drops). Onion futures dropped sharply, in part due to futures traders misreading the reconditioned spoiling onion inventory of the two Chicago traders as new onion shipments. The Chicago traders later released their inventory on the market while taking delivery in Chicago on the purchase of onion contracts at the end of the onion season. Onions flooded Chicago markets, sold at nominal prices, while there were shortages in other areas of the country. The traders obviously lost money on local onion sales, but made millions off the contracts while some onion growers (whom obviously failed to hedge their own risks: in fact, some bought futures at the top of the market) went out of business. Farmers blamed the speculators (but new Wisconsin onion farmers contributed to the supply of onions, and some of the farmers just happened to be on the wrong side of the future contracts, hoping to leverage gains from expected onion price increases). This led an ambitious Michigan GOP Congressman named Gerald Ford on behalf of local growers to push the Onion Futures Act, banning futures trading in onions, subsequently signed into law by President Eisenhower.
There has been some controversy about whether the Onion Futures Act stabilized prices during the 1960's (it's possible any reduced velocity in a few years after the ban reflected coincidental factors (e.g., favorable weather conditions), but what is clear is that when we look at prices before futures trading and over the long run after the ban, prices have been more volatile.) The preponderance of evidence shows that pricing is less volatile with futures trading. Specific to onions themselves, we have this following excerpt from a Fortune article:
And yet even with no traders to blame, the volatility in onion prices makes the swings in oil and corn look tame, reinforcing academics' belief that futures trading diminishes extreme price swings. Since 2006, oil prices have risen 100%, and corn is up 300%. But onion prices soared 400% between October 2006 and April 2007, when weather reduced crops, according to the U.S. Department of Agriculture, only to crash 96% by March 2008 on overproduction and then rebound 300% by this past April. The volatility has been so extreme that the son of one of the original onion growers who lobbied Congress for the trading ban now thinks the onion market would operate more smoothly if a futures contract were in place.
MJ Perry in Carpe Diem has a couple of instructive charts in his post on this topic, separately comparing oil and corn volatility against onions; onion prices have been conspicuously more volatile.
It's time to repeal an anachronism from the Eisenhower Administration; treating onions as a special case among commodities is indefensible. Even if one had questions about the futures market at an earlier time (say, with only a handful of traders), those concerns are obsolete in today's markets.
Let us go out with The Beatles' "Glass Onion":
Political Humor
Given today's blog post topic of onions, we naturally get today's perspective on Election 2012 from The Onion:
Musical Interlude: My Favorite Groups
The Rolling Stones, "(I Can't Get No) Satisfaction". What can I say? The signature hit song of the greatest rock band ever. Rolling Stone Magazine rates it as the #2 song of all time. (Yeah, I know what you're wondering: Bob Dylan's "Like a Rolling Stone." Big surprise coming from a magazine named Rolling Stone. No, I don't think Dylan was writing about Mick Jagger.)
