The S&P 500’s bear market of 1973-74 is gaining in historical curiosity, so let’s use it as one book-end in culling insight from 1973-1982, which was the worst economic era between the Great Depression and today’s Debt Unwind Crisis.
Jan 1973-Aug 1982 = Economic Instability = 4 Presidents in 9 years [c’mon, name em]
Aug 1982-Aug 2008 = Economic Stability = 4 Presidents in 26 years [c’mon, name em]
First hypothesis: No Political Stability Without Economic Stability.

The Economically Unstable Era of Jan 1973-Aug 1982 featured, economically:
2 Doses of energy shortages & price spikes: 73-74 & 1979
3 Separate Recessions: 73-75 & 79-80 & 81-82
Double-digit price inflation
Double digit salary/wage inflation
Double-digit interest rates w/mortgages hitting 19% for prime borrowers
Double-digit unemployment, on and off
Destruction of the manufacturing base in the Rust Belt
Mass migration of blue-collar workers (& voters) to, and the Rise of, the SunBelt
A bout of stagflation
Bailout of Chrysler Motor Corp.
Mini ‘Bear Market’ from Jan 1973 to Dec 1974
Was part of a 16-yr Macro ‘Bear Market’ from 1966 to Aug1982

Today’s evolving laundry list of economic challenges from March 2008, thru 2009 and far beyond, will be equally Breathtaking in its Scope & Scale & Diversity, but sadly, neither identical nor similar in sequencing. Sorry, no textbook provided.

Forecast for 2008-2012:
Expect Obama or McCain to be a 1-termer as the nation’s impatient and ‘quick-gratification addicted’ voters, many of whom also function as if financially illiterate, lurch from one political Savior-Figure to another and yet to another. These voters suffer an inability to distinguish – in advance – between promising or doomed economic policies and philosophies.
Expect fierce campaigning to commence a mere 11 months from now for the 2010 mid-terms, and for Congress to behave as a herd of 535 cats with an ‘agenda’.
Expect America’s economically battered voters to lose tolerance for political travails that are normally ‘over-looked’ or ‘tolerated’ during better economic times when voters are swigging down the spiked punch. For example, Clinton’s Lewinsky scandal in 1998 during the stock & tech bubble; the ’slow-mo’ exposure of Bush’s WMD deception in 2004-06 during the housing & credit bubble; and Reagan’s Iran-Contra weapons scandal in the late 80s during the 80’s boom. Compare all three to Nixon & Watergate in 1973-74 and Nixon’s struggle with failed wage & price controls, inflation, job loss, and gas lines and rationing, during the onset of the 9-year Economic Crisis of 73-82.

Insight: No Political Stability Without Economic Stability.