Posted by
Andrews on Tuesday, December 02, 2008 12:26:02 PM
Well, it looks like I was not alone in
thinking that the panic selling on the market was not a sound decision, but was creating great conditions for picking up bargain stocks. Last I checked the Dow was up 225 or so.
Actually, what makes this all the more amusing is that the press may have set the stage to defeat their favored candidate.
The press has been trying to talk us into a recession for 8 years now. Starting with Bush's inauguration, the press began blaming him for the sluggish economy he inherited form Clinton, accusing him of starting a recession somehow in the first ten minutes of his presidency.
Then came September 11, 2001 and the press, for a few minutes, anyway, decided they would be patriotic and shut their mouths. But it wasn't long before they were exaggerating the damage the attacks would do, and blaming Bush for "ill considered tax cuts", exacerbating the harm done by the attacks. And it only got worse with our "quagmire" in Afghanistan. (Recall the press was calling Afghanistan a quagmire before we invaded Iraq, at which time Afghanistan became "the bestest war ever" and where we should have sent all our troops.) And with Iraq, again, the talk started of how the "gajillion dollars a second" we were spending on "the war for oil" or "Bush's War" was going to bankrupt us and send us into a recession.
But they really pulled out all the stops as election time approached. Ignoring the role of the Democrats in the financial problems we faced, and pushing the absolutely bizarre line the John McCain was a clone of Bush, they started telling us how absolutely dreadful our economy was. I was half expecting Hillary Clinton to tell us she had spoken to Eleanor Roosevelt's ghost and she had said FDR was glad he only got stuck with the Great Depression instead of our economy. They just could not find enough bad things to say about our condition.
And, not surprisingly, their constant talking down of the economy made things worse. Yes, there were underlying problems, but thanks to the massive expansion of private investment, itself a sign of how well we did during the Bush years, and the growth of internet trading accounts, allowing small investors to fret at a moment's notice and panic sell without talking to a broker who might calm them down, the press' negative talk started the sudden plunge of the stock market. And it is clear that much of it was pure panic. Companies which were uninvolved in the holding of mortgages and which were over capitalized and thus unconcerned with the liquidity crunch still dropped precipitously. The market was simply driven by fear.
Yet, the one amusing outcome that may result from this press-inspired crisis is that Obama may be a one term president. After all, Obama is hardly anyone's first choice to restore an economically damaged market. Even if he should try to salvage some Bush advisors, those men are "moderate" Republicans, people who endorsed inflating our way out of trouble, so they will do almost as much harm as Obama's more liberal advisors.
So, Obama is facing a bad market, which he has no way to cure, along with truly extensive campaign promises which require a lot more tax revenue than he can squeeze out of the soft economy. Whether he chooses to try to fix the economy and forgo his promises, or squeezes out every last dime to finance his social programs and let the economy be damned, it is doubtful Obama will make many friends in his four years. Nor is he likely to succeed in either approach. He doesn't know how to fix the economy, and the weak economy will never support the sort of spending he desires, and if he tries, the market will weaken even more and produce still less revenue as he progresses.
All of which has to brighten the hearts of a few of my readers. After all, if we must have a partisan press which talks down the economy, at least we can derive some joy from the way that same press has managed to set the stage for the defeat of their Chicago Messiah.