The Obama administration has launched itself with a monumental thud. After announcing programs of “stimulus” and credit reconstruction totaling nearly two trillion dollars (with potential exposure ranging up to 10.7 trillion dollars), Obamanomics was greeted with a terrible electoral defeat in the only vote that really matters. Far from sparking a market rally, the “Obama Rally” continued, slicing another 4-5 % off of the Dow and S&P averages. Difficult to spend two trillion dollars to improve the economy and be greeted not even with a yawn but rather with panicked flight from the market.
Why? Like his false claim that all scientists support the Global Warming theory, the Big O claimed in his choreographed press conference (which had the spontenaity and diversity of a North Korean Rally) that all economists supported his program. Big news to the hundreds of economists purchasing a full page ad in the Wall Street Journal opposing the “Stimulus” program and to Jim Rogers, the market guru, who has most often correctly predicted the current economy.
The Obama “Stimulus” Program is the ultimate “Obama-Speak”. More than half the program can stimulate only government — consisting of grants and bizarre make-work projects, which produce dependency but never lasting meaningful jobs. Most of the remaining half — the “tax cuts” in “Obama Speak” consist of one-time checks, largely to those who pay no income taxes at all. This is a very poor way of even distributing welfare to one’s followers.
Meanwhile, the sheer size of the boondoggle threatens the greatest economic asset of the United States — its currency and the value of its pledge of full faith and credit. It has clearly produced panic in the securities and financial markets. It threatens long run inflation. It guarantees our children a treacherous economic road.
We might have hoped for more. Although O himself has absolutely no economic or business background, he flashed often Warren Buffet, Paul Volker, and others, adults who know better. We would have expected with their guidance (and with his earlier rhetoric) a program genuinely designed to produce meaningful business stability and growth, while restoring confidence to the capital markets. We could have experienced real reform of the SEC and restoration of business confidence through a prosecution of the criminals, even if they were Democratic contributors like Bernie Madoff. Instead, the nation has watched a coordinated pillage and sack of the national cupboard to produce a Cadillac welfare and patronage program very destructive to business confidence.
Investors are heading for the exits for obvious reasons. Like Kirchner and the Peronists in Argentina and Mugabe in Zimbabwe, O has chosen to raid the National Treasury and debase its credit to reward his followers. We have seen it before elsewhere. And while words do matter, there comes a time when words are not enough no matter how clever or duplicitous. In the real world, where the rubber meets the road, O has marked himself as a terribly tragic joke upon the United States, whose actions in a few weeks have produced incalculable damage to our nation’s financial health. He has turned “a crisis into a catastrophe.”