SHOULD our President wish to write another autobiography, I suggest this title. Given what I studied of Obama prior to the election, I am not surprised by what he thinks and how he acts. However, I am from time to time very surprised by what he says (so calculated and measured as he is). Consider this, uttered just yesterday:
What I’m looking at is not the day-to-day gyrations of the stock market but the long-term ability for the United States and the entire world’s economy to regain its footing. And you know, the stock market is sort of like a tracking poll in politics. It bobs up and down day to day, and if you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong.
One could hardly call a 30% slide in the major equities indicies since he started revealing his policies “day-to-day gyrations”! Were I in or nearing retirement age, looking to withdraw investments, I would be horrified by what I see. If in fact the markets were “gyrating”, I would concur with our President; you can’t look day to day for long-term estimations. But the temerity to suggest this profound slide is anything less than a real situation – the nerve!
He’s a politician, so I understand he’s going to spin things. He’s not going to take ownership for what is decidedly a reflection of the sentiments of investors on his policies and those of the Congress. But he could at the very least call a spade a spade, admit the markets are way down and that he is concerned enough to share in the pain of those affected. Brushing aside what people know is a real problem is tantamount to extreme arrogance – and in the position of President, quite moronic.
So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year’s fourth quarter.
What is new is the unveiling of Mr. Obama’s agenda and his approach to governance. Every new President has a finite stock of capital — financial and political — to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his “stimulus” spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.
His Treasury has been making a similar mistake with its financial bailout plans. The banking system needs to work through its losses, and one necessary use of public capital is to assist in burning down those bad assets as fast as possible. Yet most of Team Obama’s ministrations so far have gone toward triage and life support, rather than repair and recovery.
The President is not a stupid man, but his actions are moronic. Moronic is generous. If I don’t believe them so, I am then forced to look at other explanations – the many conspiracy theories floating around. There are reasonable estimations that he is doing this in order to collapse markets and transfer assets from the private sector to the public. That is, nationalize on a sweeping scale – convert the U.S. economy to a European Socialist model (or beyond).
As I said, calling his policies moronic is charitable.
Note: cross-posted at TIFI.net