« Economics Meets Politics | Main | Rush to Judgement »

March 06, 2009


Feed You can follow this conversation by subscribing to the comment feed for this post.

Remember how "left" Bo was apologizing for being? It's very hard to be left leaning and compromising when you are watching your life's work being taken away. "Taken Away?" you might question. Well here's my take on it and it is as Bo is pointing out. Remember the famous political motto of the Democrats: "It's the economy, stupid!"? Well never in our history did the people follow that motto more closely than in this election: tired of war that took too long to win, tired of deficits and scared by a banking failure threatening their future, Americans in the center "leaned" left and voted in Obama to fix the economy. Obama alone was what they wanted. Pelosi and Reid were already ranked below GWB in popularity. The center didn't "turn" left they just "leaned" left and bet on a bright lawyer name Obama, being compared to Lincoln, to "fix the economy" Despite warnings by "Joe the plumber" of income redistribution. Despite warnigs of far left lifetime associations with extremists. Despite solid middle of the road people like Joe Lieberman and John McCain arguing against it the middle "leaned" left. And what has happened?
Shown step by step by Bo in this piece Obama has emptied the coffers of America's future in less than 60 days and driven America's collective savings 20% further down. America's business leaders are now seen as the bad guys not the foundation of the free enterprise system. Bankers, most of whom are small businessmen and women, are seen as the enemy. Bankers who, stimulated by Clinton's prodding, took a chance on loans to the little guy to buy a house. The little guy got ahead of himself and can't make the payments. Unions, who Biden is now rewarding in closed door meetings, refused to change their thinking as technology created new ways to build automobiles. Environmental zealots pushed domestic restrictions on oil and natural gas drilling beyond reasonable limits in favor of alternative technologies that are not yet economically competative. Oil and gas prices skyrocketed and took away the spending power of the little guy who commutes to work. Bankers (according to 60 Minutes) then rushed into the oil derivatives market, drove oil to $150/barrel, and lost more billions on top of the billions they were losing in bad mortgages packed as a good investment.
As Bo describes: the market sensed the coming of the Obama solution. Beginning with the defeat of Hillary, followed by the loss of McCain's lead the market tanked 35%. And , since taking office Obama has let us all see how we were tricked into voting for a "lean" left but have elected a "left turn". The market has dropped another 20%. So the wealth of America --historically stored in real estate (homes) and mutual funds (stock)-- has evaporated. Most people ready to retire have lost 50% of their nest egg. Their dream house is down another 30%. Those of us in business who traditionally have funded our way through recessions by borrowing from banks against our reserve cash stored in stock funds are now talking to banks who are afraid to lend and are forced to liquidate our depressed stocks at unprecedented prices. This creates more pressure on the market as we raise cash and it creates a shorter safety line forcing us to cut back further to stretch it out.
So, elected to fix the economy and promising to bring a breath of fresh air to America Obama gives us a Pelosi and Reid constructed "stimulus" packages consisting of a new "moral" American system of justice. He gives us Clinton political spin men to handle the press creating squabbles with the radio guys. He gives us lobbyists and tax cheats for his cabinet. And he simply ignores his promise for no "pork" by putting them all in one bill and calling it the "stimulus" we need.
Earlier this week as my financial advisor was trying to convince me not to sell off the rest of my stocks in reserve for my company so I could preserve it in cash I said: "Can you tell me one thing that you can think of that could happen right now that would trigger a 25% market rally?" His answer was "no". And that my friends is where we are.
President Obama: "It's the economy---Sir" Get off the social agenda and fix it, please. Or veto the bill,take out the pork and at least give us a market rally.

The comments to this entry are closed.