Back in the day, the euro was worth about $1.20.  Now, it’s poised to be worth $1.41.  Federal Reserve Chairman Ben Bernanke announced that since the first and second rounds of qualitative easing have failed, a third round is in order:

“The comments from Bernanke and Fitch amount to a double whammy for the dollar and a boost for the euro and riskier assets. It’s all positive for risk,” said Brian Dolan, chief strategist at Forex.com in Bedminster, New Jersey.

The Fed ended its most recent asset-purchase program in June. Traders said that another round of easing would flood the financial system with more money and encourage investors to reach for higher-yielding currencies and assets.

There’s something to be said for “If at first you don’t succeed, try, try again”, but the reality is that inflating the dollar away does not help our struggling economy.  Senior citizens and others with savings will lose the purchasing power of their limited assets.  Families on tight budgets will be hurt even more, as the price of gasoline will invariably rise.  (Approximately 49% of our petroleum is imported – or rather, in 2008, approximately 49% of our petroleum was imported, a number which has surely risen as offshore drilling has been shut down in the Gulf.)  Higher gas prices mean less spending – which we’ve already seen after QEI and QEII.

I facetiously asked what this will do to the price of Champagne (answer: increase it about 20%), but this will do all sorts of bad things to the price of all goods.  Gasoline goes up, so everything will go up: energy is part of the cost of production.  Imported goods will cost more, which means less money for retailers.  We all weep crocodile tears for those whose Veuve Cliquot habit will be a bit more expensive, but that means fewer jobs for family-owned liquor stores, fewer college kids who can make a few dollars and get some experience working as cashiers.  We get a lot of produce and commodities from overseas (ex. avocados, coffee), which will go up in price – more than they already have.

Thanks, Bernanke. We really need this right now.

There are several ways to look at the result in CA-36.

First of all there is the station wagon full of nuns theory. The sudden death of Hahn’s mother drawing positive attention to people who had not paid attention to the race. There is just no way you can poll or do anything about that.

Second of all there is Stacy’s take:

Look, if Hahn wins by less than 10 points, that’s a huge GOP victory in this heavily Democrat-leaning district. If the margin is less than 5 points . . . Well, that’s hard to imagine. If Huey should somehow win, it will be nothing short of a miracle.

There is something to that, but like the 1984 election when a Democratic pundit said: “You spot me 50 electoral votes and I can win this thing” you don’t get congressional seats on moral victories.

However I think the best way to look at it is Massachusetts 2010.

Any student of military history knows that to win a war, you want to tie down your foes with a demonstration to keep them from reinforcing the primary theater of battle. For the investment of an Ad by Turn Right USA the democrats in the district were sent into a panic. They spent a fortune on a seat in a blue state and a district where the president won by 30 points. As long as Democrats are playing defense on their own turf,they can’t make inroads in states where the GOP ran wild in 2010 to re-take the house.

One final thought: Democrats not only spent a fortune but they used panic tactics, and unlike in Massachusetts, you had allies crossing lines, from hacking to death threats to compromising an actual American Hero. These were lines that were not crossed in the Bay state. Hahn and her allies were unmasked and yet the district voted for her anyway. Like Hal Chase at his trial by the National league it call came out, and he still won. Quote Bill James:

He was free, then. It had all been brought out into the open , and he had gotten by with it. This seems to have had a liberating effect of Chase’s activities…

Chase went on to help throw the world series in 1919. Why would we expect Hahn or any of her cronies to show any more restraint in their governance or in their tactics after they got away with it during a national election?

In a republic you get the government you deserve. The people of California in general and CA-36 in particular have made their choices and they deserve all they will get from them.

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