Tuesday, March 03, 2009

Obama's Goal is to Rollback Reagan Revolution in Economics and National Security

Poll: Do you want Obama to succeed?

Throughout the presidential campaign of last year it was suggested that if Obama won, he would govern as a centrist and usher in a new era of bipartisan filled with hope and change.

But in his first weeks in office his actions have made it clear that all those words were just a pleasant sounding smoke screen to lull the American people into a false sense that they could trust this unknown, inexperienced man whose only prior claim to fame was running for president while serving in the U.S. Senate.

As Obama's famous pastor Rev. Wright used to say "America's chickens are coming home to roost."

The Stock Market continues it's slide as Wall Street sees Congress pass monstrous spending bills that have more to do with liberal payback than economic stimulus. Couple that with Obama's budget blueprint which lays out an economic plan that is anti-growth and punishes success. It's no wonder Wall Street investors have no confidence in Obama's economic team.

And as we learned yesterday, rumors of an Obama deal to trade away missile defense for some vague promise of Russian help with Iran sends shivers down the spine of our reliable allies like Poland and the Czech Republic who Obama appears ready to toss under the bus in hopes of some flashy deal with the Russians that won't be worth as much as the paper it's printed on.

Match that with an Obama defense budget which promises to shrink in the coming years. This comes from Democrats who said our military was dangerously overstretched. Now they will be overstretched and underfunded.

The two major planks in the Reagan Revolution: economic freedom and a strong national security are being undermined by Obama in less than two months in office. Liberals may be ecstatic, but more sober minded Americans must ask themselves this question: Do we want Obama to succeed in dismantling the peace and prosperity machine that created the economic growth of the last 25 years and won the Cold War without firing a shot?

Only a liberal would want to fix something that isn't broken.

Have Your Say




Opinion Makers Continue to Doubt Obama Economic Plan

"The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy."

The Obama Economy
As the Dow keeps dropping, the President is running out of people to blame.
The Wall Street Journal
MARCH 3, 2009

As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama's policies have become part of the economy's problem.

Americans have welcomed the Obama era in the same spirit of hope the President campaigned on. But after five weeks in office, it's become clear that Mr. Obama's policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence -- and thus a longer period of recession or subpar growth.
...
PhotobucketSo 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.
...
Listening to Mr. Obama and his chief of staff, Rahm Emanuel, on the weekend, we couldn't help but wonder if they appreciate any of this. They seem preoccupied with going to the barricades against Republicans who wield little power, or picking a fight with Rush Limbaugh, as if this is the kind of economic leadership Americans want.Perhaps they're reading the polls and figure they have two or three years before voters stop blaming Republicans and Mr. Bush for the economy. Even if that's right in the long run, in the meantime their assault on business and investors is delaying a recovery and ensuring that the expansion will be weaker than it should be when it finally does arrive.
The budget reveals the liberal Obama
By Clive Crook
Financial Times
March 1 2009

...I feel I owe Republicans an apology.

As you recall, in the debate over the fiscal stimulus, Republicans accused the president of presenting a measure they could not support, disguising this with an empty show of co-operation. Bipartisanship, they said, is more than inviting your opponents round for coffee and a chat. I did not buy it: I accused them, in effect, of brainless rejectionism and a refusal to compromise, and congratulated the president for trying to come to terms with the other side.

This budget says the Republicans had Mr Obama right all along. The draft contains no trace of compromise. It makes no gesture, however small, however costless to its larger agenda, of a bipartisan approach to the great questions it addresses. It is a liberal’s dream of a new New Deal.
...
For the moment, though, this budget reveals Mr Obama with new clarity. He is no Tony Blair, ideologically rootless, as I had previously suspected. He is a conviction politician: a bold progressive liberal. Yet his outreach to Republicans is no sham; his civility, I think, is not a front. He respects people who disagree with him, is capable of liking them, and is always willing to listen – but then stays true to his beliefs. This is a rare and devastating combination.

Capital On Strike
INVESTOR'S BUSINESS DAILY
March 2, 2009

... In the three months since the election, the broadest measure of the stock market's value, the Wilshire 5000 Index, has plunged more than 30%, slicing over $3 trillion from Americans' wealth. Investors have walked away from investing, while businesses shut down factories and offices and slash jobs.

This is both highly significant and dangerous. Capital, bluntly put, has gone on strike. Those who own wealth are pushing it to the sidelines, as a young and inexperienced president tries to jam through the most sweeping economic changes in over 70 years.

The prospect of these changes becoming law has already radically altered our nation's economy. Entrepreneurs and CEOs who once created new products, new services, jobs and trillions in wealth for America's workers and retirees now find themselves vilified and punished for their success.

ABC News reported this week that many upper-income taxpayers already are planning to cut back on work and investments to stay under $250,000 in income — the point where Obama's punitive taxes kick in. No one wins from this, yet Obama seems oblivious.
...
As our stock markets melt under a barrage of new taxes on incomes, estates, capital gains, dividends and energy, it's good to recall that more than 100 million people own stocks or mutual funds. And that the stock market is the main wealth- and growth-creating mechanism in our capitalist society.

But when taxes go up, regulations proliferate and the rule of law and private property protections are weakened, the economy will invariably suffer. This is a universal lesson of economic history, one we ignore at our peril. And yes, this is what's happening now.
...
His stimulus package is little more than a down payment on a socialist economy. It raises taxes on the successful, brings back the welfare state, hands out favors and cash to friends of one political party, while imposing government control over the entire free market in ways that just a year ago would have seemed unimaginable.

And this contribution from Sigmundringeck one of Flopping Aces favorite commenters. He's a Chinese investor living in Asia and offers valuable perspective from that viewpoint:
...The only other thing that might presage a market recovery is if Obama gets it right, and he is nowhere going near that path now.

The WSJ, IBD and FT have many op-ed pieces blasting Obama, now a critical consensus is developing, and I think we will see even more of these critical media pieces as all those in finance who were dumb enough to support him start to change their minds and lose faith in him. I can bet you even Buffet is starting to get troubled by Obama.

I read last night on Bloomberg that Obama was actually advising people to buy stocks as they were good value now, and their earnings ratios were good or some blah like that.

This is incredible. He intends to raise all sorts of taxes and capital gains taxes, energy taxes, effectively 20%, then tells you to buy stocks. He thinks he is gonna make the market go up when he is actually crashing it. He is going to take money away from companies, punish investment, punish growth and profits and give it all to leftwing programs that don’t help the economy and he tells you to buy stocks because I am going to make the markets go up.

He is out of his mind.

When Obama tells America to buy stocks you are heading for some violent downmove, for sure.

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