08/07/2008 05:12 am ET | Updated May 25, 2011


Our national politics and economics have come to be defined by the inflation and violent pricking of bubble after bubble. There is a rhythm to our endless economic and political adulation and repudiation. I can not say I have solved the riddle, I can say it is high time we paid some real attention to it. There was a Bill Clinton bubble, there was a GW Bush bubble, an Iraq War bubble, a Global War on Terror (GWOT) bubble, a NASDAQ bubble, a housing bubble and now a commodity and Barack Obama Bubble.# There was a US invincibility bubble, a US Dollar bubble, a deficits don't matter bubble. I have barely scratched the surface. The inflation and pop list could be pages long. Not to worry, I will spare you the full treatment.

What do I mean by bubble? I am referring to a phenomenon usually associated with asset prices wherein a self reinforcing cycle develops. Allocations of wealth and attention create sustained upward pressure "based" on the desirability, profitability and forward price trajectory of an asset or class of assets. Prices rise attracting more money and confidence, this pushes prices up further. People, pundits, papers and passions settle into a sense of euphoric confidence in the true and scientific basis for their expectation driven inflation. The asset or asset class is seen as different and immune from the normal pressures, economic fundamentals or gravitational pulls that have wrecked havoc in past bubbles. In the depth of the euphoria, anyone silly enough to question the bubble wisdom is doomed to be attacked as foolish, evil or both. So, here I go.

Having limped out of disastrous Bush, Iraq and housing bubbles we are heading -- with great excitement -- into a commodity price and Obama bubble. We seem determined to find salvation and absolute good in the investment class and politician de jour. Massive inflation defines public perception of Obama. The pages of this Huffington Post have hosted violent and intense defenses against any and all who dare question. Affronts against the change messiah -- real and imagined- result in floods of defense e-mails, rabid and foaming attacks. This has nothing to do with Obama as a man, politician, intellect or leader. It is the bubble dynamic that has pumped massive air into this candidate at the present time. The process is frighteningly similar -- if from a different group -- to the inflation of Bush from President Select into master of world destiny and great leader of attack weary and reluctant super-power. It is the same logic that drove the housing and consumer debt bubbles to heights of amplitude and pressure that created carnage in an explosive and ongoing pop.

Why? When did we become a nation so unhinged from careful study and skeptical analysis? Why is hero worship and magic bullet status required for social legitimacy, investor dollars and political support? Every asset class or politician benefited by this process is also, eventually eviscerated by it. We are racing from bubble to bubble. Each cathartic attack on yesterday's sacred cow gives way to new and equally delusional euphoria about the new super investment, magically transformational politician.

What would happen if we asked what roles these bubbles played in perpetuating and deepening the political and economic problems that are making us so desperate for change and distraction? We had better do so soon. Our prestige, currency, macro economy, housing stock, political system, health care system, infrastructure and energy policy are crying out for a serious hard nosed overhaul. Bubbles don't fix problems; they explode in a hail of damage and disappointment.

# The proof of the Obama bubble should be obvious from the many angry emails and comments defending Obama -- who I am neither attacking, nor blaming in this article. There is nothing wrong with tech stocks, oil, agricultural commodities, housing or the candidates, as such. The point is to investigate a growing, powerful and unhealthy trend in American economic and political life.