Government by Consent

A binomial organizational technology that always conserves the stakes in the guise of change, like a two-party system (A therefore B, B therefore A ad infinitum), achieves a false legitimacy with the appearance of pluralistic mechanics.

The third-party element that emerged in the Massachusettes senate election will be interpreted as being either pro-Republican or anti-Democrat. That will conserve the stakes (the bivariate technology).

Both parties want to conserve the benefit of what the demand for health care, for example, provides--inelasticity, or the relative inability to consent to one's fate.

Consent is the Constitutional legitimacy at the cornerstone of our republican form of government. It is, however, intentionally organized into a bivariate, dummy variable that is really no choice at all. The freedom to self-determine is reduced to a function of autocratic compliance, just exactly what our Constitution is very strictly intended to prevent.

Independents are providing the pluralism necessary to add the value of consent back to the front of the equation of power so that, representation plus consent equals power, rather than, representation equals power of consent.

The misattributed value of consent results in a retributive value, and a gamma risk associated with it, that signals a probable resistance to binomial distributions both politically and economically.

Mr. Brown's election does not indicate less gamma risk to an accumulated benefit (like the current bubble-value of equities), it signals more. It indicates a trend that demands support for more fundamental valuations--a recovery ironically feared to pull equity markets off current levels.

However, equities have prepared for the recovery phase of the business cycle. Mergers and acquisitions will mitigate the negative effect of a more fundamental valuation, which is what China is looking for to strengthen the dollar.

Positive equity value will follow another deflationary dip (another opportunity to merge and acquire) signaled, for example, by China's resolve to control bubbles with less liquidity. Commodities will deflate, a recovery will occur and there will be less pressure for a gamma-risk distribution that either deconsolidates power, or retributes accumulated value, politically or economically.

China's autocratic, deflationary, monetary hardening defends the dollar investment.

China needs to support the recovery of American consumers. While monetary hardening deflates the commodities bubble it also supports the Fed's policy of monetary easing that, without growth, resists a stronger dollar (more buying power) and adds speculative-demand support to commodities at the same time, resisting the effort to support American consumers and their dollars. China must be reasonably sure the American economy will recover the service sector, protecting it from the probability of increased alpha risk to its industrial base and gamma risk to its political base that naturally defaults to the consent of the governed whether oligarchs like it or not.

The probability the Fed's continued monetary easing will result in non-service sector investment is virtually none. The investment will not be used to push employment costs in the U.S. with China being reasonably sure the gamma-risk distribution--the recovery--will have a fundamentally minimal alpha effect.

Surplus capital made available for investment by cheap Chinese labor markets is not likely to be used to achieve a competitive advantage except by technological means that resists full employment (which is why analysts portend a tech bubble). This will generally support the bubble effect on U.S. equities and the probability for a protracted "jobless recovery" despite the emergence of populist, gamma-risk variables like "consent of the governed."