Social Mood Conference | Socionomics Foundation
By Euan Wilson, originally published in the November 2011 Socionomist

The socionomic model has often noted the dramatic effect social mood has on the public’s attitude toward sitting leaders. For example, the November 1999 Elliott Wave Theorist featured a short story on elections in a report titled “Socionomics in a Nutshell.” It showed that rising social mood tends to lead to presidential reelections while falling social mood leads to oustings. Robert Prechter, Peter Kendall and others have proposed other aspects of the mood/election relationship, such as the observation that rising mood favors traditional candidates while falling mood tends to smile upon perceived agents of change.

The charges that Obama was born outside the United States and therefore is ineligible to hold the presidency fit right in. The same charge was leveled at the Republican presidential candidate during the same election: John McCain was born in the Panama Canal Zone when his father served there as a Navy officer. The public always looks for justification to support its feelings; during extreme mood phases, voters embrace increasingly farfetched rationales.

Obama Birth Certificate

Figure 1

Barack Obama’s presidency has so far endured two major social mood phases: the strong bear phase that he inherited and a powerful bull phase (see Figure 1). The “Birther” charges dogged him during his candidacy and early presidency, as stocks plunged. But during the subsequent two-year rally, those same charges faded—and then melted away.

It turns out that Obama is not the first sitting president to face charges of ineligibility. James Fallows of The Atlantic noted that such an expression has happened once before: to President Hoover, another big-bear-market president (see Figure 2). In 1931, John Hamill released his book, The Strange Career of Mr. Hoover Under Two Flags. Among other accusations, Hamill asserted that Hoover had given up his U.S. citizenship as early as 1900 in order to gain an edge in an overseas business deal.

Herbert Hoover's Bear Market Career

Figure 2

Hoover’s eligibility question did not get legs, despite the continued plunge in social mood. But mood did do a number on Hoover’s reelection bid (and legacy). First, he was the people’s overwhelming choice for president: He entered the office with a 58% landslide victory in the popular vote as the Roaring Twenties came to a head. Then he was tossed from office just four years later in a near-mirror-image landslide defeat of 57%. The reason for this emphatic dismissal? Social mood had plunged, as displayed by the Dow, which had shed 89% of its value.

Having dodged the Birther charges, presumably for good, the question now is how President Obama will fare from here. What are his chances for reelection? The direction of social mood, as reflected by the stock market, will set the odds.■



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Most economists, historians and sociologists presume that events determine society’s mood. But socionomics hypothesizes the opposite: that social mood regulates the character of social events. The events of history—such as investment booms and busts, political events, macroeconomic trends and even peace and war—are the products of a naturally occurring pattern of social-mood fluctuation. Such events, therefore, are not randomly distributed, as is commonly believed, but are in fact probabilistically predictable. Socionomics also posits that the stock market is the best available meter of a society’s aggregate mood, that news is irrelevant to social mood, and that financial and economic decision-making are fundamentally different in that financial decisions are motivated by the herding impulse while economic choices are guided by supply and demand. For more information about socionomic theory, see (1) the text, The Wave Principle of Human Social Behavior © 1999, by Robert Prechter; (2) the introductory documentary History's Hidden Engine; (3) the video Toward a New Science of Social Prediction, Prechter’s 2004 speech before the London School of Economics in which he presents evidence to support his socionomic hypothesis; and (4) the Socionomics Institute’s website, www.socionomics.net. At no time will the Socionomics Institute make specific recommendations about a course of action for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended.

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