Category Archives: Economy

Such A Deal

It is unsettling that Alexandra Ocasio-Cortez, the freshman congresswoman from New York, would come up with the “Green New Deal”. Although, considering some of the other idiotic pronouncements coming out of her mouth, it is not surprising. What is surprising is that all the declared Presidential candidates for the Democrat nomination so far (Gillibrand, Harris, Booker and Pete Bittingieg….. who?) plus Dear Bernie, who has not yet announced, have embraced this idiotic and destructive plan. (I had to look up who Mr. Bittingieg is and discovered he is the mayor of South Bend, IN, a position that makes him more than qualified to run the US.

Rex Murphy, a commentator for the National Post in his brilliant 2/12/19 piece has dubbed AOC (I’m not going to write out that name again) “the Thomas Jefferson of the infantile progressive left.” She has taken over this lofty role despite being in Congress only 38 days. Quite an achievement but certifies the Democrats wholesale stampede to the far left.

As I pointed out in my 12/20/16 post “Doubling Down on a Losing Hand”, when the Democrats lose a presidential election their reflex is to lurch hard left. A 12/19/16 WSJ piece by Dan Henninger pointed out that after Humphries lost to Nixon they went hard left and ran McGovern who got a whopping 17 electoral votes in the next election. In Reagan’s second election in ’84 the Dems reverted to form and nominated Mondale who managed 13 electoral votes. So here we go again. Every one of the Democrats who have entered the race so far are borderline socialists. Maybe it’s because of the success of Bernie Sanders in the contest with Hillary. It’s hard to believe all these supposedly educated politicians don’t understand the ramifications of this absurd Green New Deal.

On the other hand perhaps it’s because they anticipate that the kids coming out of high school and college these days have been so indoctrinated in the blather of global warming and have no understanding of how the economy actually works. Yeah, I know, it’s called Climate Change now because it polls better but it is still based on the same idea…the planet is getting warmer. Global warming is a harder sell when we are in the middle of a historic cold wave, especially this late in the season.

The charismatic Ms. AOC has laid out the specifics of her Green Wet Dream, er, New Deal because she in her vast wisdom knows exactly how much time we have before the planet burns up. Twelve years. Her prescription to save the planet is for the US that produces 20% of the world’s C02 to go to zero C02 by 2030. This would require elimination of all internal combustion engines….. cars, trucks, tractors, bulldozers, etc. Airplane travel has to be eliminated as much as possible. (Congressional junkets, and attendance at climate change conferences excepted, of course.) Eliminating all fossil fuel would require the closure of all coal and natural gas electrical generating plants. Heating all buildings and homes and powering all vehicles with electricity would require a lot of wind- and solar power-generated electricity. Good luck with that fantasy.

Of course, this massive transformation of society would put countless millions of Americans out of work. Not to worry, AOC’s Green New Deal guarantees everyone a living wage, plus free medical care and free education, plus a guaranteed retirement. This total destruction of the American economy will be gleefully cheered by China until they realize that their biggest market just disappeared.

The Climate Change/ Global Warming movement has never been about the planet getting warmer because there is nothing we can do about it even if it is happening. The movement is an excuse to slide the country into socialism, to give the bureaucrats more control over the everyday lives of the citizens.

My real concern is not about the ignorant ranting of AOC but the fact that so many of her Democrat colleagues are endorsing this suicidal plan. I have come to the conclusion that a test should be required before a person can run for office comprised of four sections: Economics, science, history and government. My first question on the science section would be, “describe photosynthesis and why it is important”. If they can’t answer that one they would be disqualified immediately because that would mean they have no clue of the carbon cycle and how important C02 is to the survival of all living organisms.

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Filed under Democrats, Economy, Environmentalism, Politics

Fred’s Tossin’ and Turnin’

Next month marks the 65th anniversary of the publishing of Friedrich Hayek’s classic The Road to Serfdom. He wrote it as World War II drew to a close to warn Europeans of the dangers of socialism. At the time, the leading intellectuals in England and elsewhere strongly favored pushing their societies toward the warm fuzzy embrace of socialist utopia. Hayek pointed out that for socialism to function, the government must become more and more coercive. (Think of the IRS and the heavy fines meted out by government agencies to bring citizens to heel.)

Eventually, Hayek observed, this power over the individual falls into the hands of a despot with disastrous results. His prime example of this phenomenon was Germany. They had embraced the National Socialist Party, granting it absolute control over German society. When Hitler took over, the NSP morphed into the Nazi Party and Germany became a military dictatorship. (“Nazi” by the way, is Bavarian slang, which roughly translates into “dummy” or “dunce”.)

Hayek rightly made no distinction between the terms “fascist” or “communist” as is so common today in intellectual discourse from the left and right. For the average citizen the realities of living under either one is identical with the loss of individual freedoms such as speech, assembly, property and the likelihood of getting a fair trial when you piss off some bureaucrat.

It would be hard to deny that the current Obama Administration and Democrat controlled Congress is pushing us rapidly into the direction of socialism. Indeed, “Newsweek” magazine on its Feb. 26th cover proudly proclaimed “We’re All Socialists Now”. They accept that the era of bigger government is coming and that we should embrace it. Ol’ Friedrich is turning in his grave.

Hayek was an economist first and often did intellectual warfare with John M. Keynes during the Great Depression. Keynes believed in an activist and expansive government and favored fiscal stimulus (big government spending). Hayek believed in free markets, limited government, stable monetary policy, low taxes and appropriate regulation. (Ebenstein, National Review, 2/23/09). The politicians of the day followed Keynes’ prescriptions and the depression lasted from 1929 until after WWII. In short, it did not work out well.

Hayek was a “monetarist” meaning he favored actions by the Federal Reserve to create stability in the money supply and interest rates to direct the economy independent of political influence. “Fiscal policy” is the responsibility of Congress.

In past blogs I have asserted that the current mess precipitated by the housing bubble was caused by “easy money” for far too long and the interference by Congress in the housing market with the Community Reinvestment Act. To understand how this worked out let’s look at what the Fed under Greenspan (Fed. Chairman ’87-2006) did and see the results on the economy of his ministrations.

Between 1998 and 2000 Greenspan gradually ratcheted up interest rates to 6.5% causing a recession in 2001. (Note: This is the Federal Funds Rate as opposed to the Prime Rate, which is generally 3% higher.) He began lowering rates until they hit 4% just before 9/11. Immediately after 9/11 he dropped them to 1% and kept them there until 2004. Hayek argued that, “…if interest rates are too low they will attract resources to areas of the economy not otherwise attractive to investment.” Like real estate? Housing prices were skyrocketing and the mania was in high gear. Sensing trouble, Greenspan then jacked up rates to 5.25% by 2006. Adjustable rate mortgages started kicking in and that pinprick caused the bubble to burst. Many economists now call this whole mess “The Greenspan Bubble”.

From this it should be clear that the Democrat strategy to blame the economic crisis on Bush, while effective, is totally bogus. The politically independent Fed gets the lion’s share of the blame for this debacle, with honorable mention to House Democrats who pushed to get unqualified buyers into houses and then resisted all efforts to rein in Fanny and Freddie.

The 2006 elections brought in a Democrat controlled Congress and the 2008 Presidential election gave us the thinly qualified Obama. Rewriting history and elevating FDR to sainthood have resurrected Keynesian theory.

Money in incomprehensible numbers is getting tossed out the door in frantic spending to try to stem the tide of recession. At the same time the Fed cut the interest rates to essentially zero. And, yesterday while House Democrats were looking for the addresses of the AIG employees who got bonuses so they could string them up on the nearest light pole, the Fed quietly created $1.5 trillion dollars out of thin air. They’re gonna print it, folks! Did I hear someone say “smoke screen”?

In the most blatant display of hypocrisy I’ve ever witnessed, politicians called for the heads of AIG executives for receiving bonuses that were agreed to in the very “stimulus” legislation they had just passed!! Of course, they had an excuse: none of them had actually read the damn thing. Latest news on this is that Geitner, Obama’s Treasury Secretary, now admits that he insisted the “Dodd Amendment” authorizing the bonuses be added to the stimulus bill. Dodd had only the day before denied he knew anything about the amendment carrying his name. Today they passed a bill to tax these 71 individuals to get the bonuses back. It’s probably unconstitutional. How can anyone have any confidence in these clowns?

But, I digress. Feel better though having gotten that out of my system.

OK, what does all this mean? It seems the latest move by the Fed coupled with the massive spending by the Obama Team will likely jolt the economy into a mild recovery. Most likely we will dip back into recession when the cap and trade taxes, individual tax hikes and card check kick in. In any case, almost everyone expects that the next ice burg in our path will be unprecedented inflation. In a year or two the US dollar might look a lot like the Zimbabwe currency.

Fred, climb out of the grave. We need ya, man.

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Filed under Economy, Keynesian theory, Obama, Politics

Where’s the Bottom?

Another very bad day on Wall Street… the Dow down 427 points, closing below 8000. More bad news out of the banking industry, the Big Three execs in Washington begging for cash to stay alive and Paulson zigging and zagging over what to do with his $700 billion. Not the kind of news to send folks out to the auto mall to purchase a new set of wheels or give the broker a call to pick up a stock or two. Everyone is waiting for the next shoe to drop. Actually it reminds me of that recent TV ad where it’s raining shoes. (Funny. I can’t recall what they are selling.)
Frankly, I think Paulson would like to punt the whole $700 billion TARP thing down the road to the next administration and let Obama’s new Treasury Secretary figure it out. That way he could sneak out of town and not take the blame when it doesn’t work. The whole thing smells like they have no clue.
The Big Three automakers were operating on a flimsy business model before they got whacked by the duel tsunamis of the spike in gas prices to over $4.00 per gallon and then the credit meltdown. Decades of increasing concessions to the UAW and the accumulated deadwood of their own management and distribution network (they have way too many dealers) placed them at a big disadvantage to the foreign manufacturers. They have huge liabilities for their retirement and health care programs and they must pay nearly full wages to tens of thousands of laid off workers. The sum of all this means that their cost of producing a car is some $1600 to $2000 more per car than their Japanese competitors. Their loaded cost per worker hour is $72 vs. $42 for Toyota. Some business model.
In addition, Congress has placed some formidable obstacles in the way. As pointed out in an excellent piece in the Wall Street Journal today, Congress imposed the CAFÉ fleet-mileage standards that forced the Big Three to produce low mileage cars at a loss to sell their profitable and popular SUVs. Bowing to the green lobby, Congress will not allow the automakers to include in their CAFÉ calculations the autos they make abroad. This simple change alone, says the WSJ, would likely save Chrysler from bankruptcy. Nor will the greenies consider allowing the car companies to sell in the US their highly efficient, small diesel cars so common in Europe. Anyone who has rented a car in Europe has likely driven one of these little beauties. Quiet, peppy and non-polluting, they get great mileage. The environmentalists won’t permit the increase in the supply of diesel either. That’s why it costs more than gasoline. Never used to, and now it’s killing the trucking industry.
So, with all this against the auto industry does it seem like a great idea to throw $25 billion more at them? I think not. It’s only the beginning. Unless the Big Three can restructure their labor and distribution costs they are never going to be viable. And, unless Congress acquires some common sense about the penalties they impose with their mileage standards, even restructuring may not do the job.
Unfortunately, it looks like the incoming Obama Administration may make it worse. Bush refused to grant California a waver to impose a 23% reduction on greenhouse gas emissions from autos by 2012 and a 30% reduction by 2030.
That would have required the automakers to produce special cars for the California market. A killer. Obama promises to reverse the Bush policy. If he’s going to do that, sending the auto guys any amount of money is pissing it down a rat hole.
I believe, however, that Detroit will get the money, if only because the politicians are afraid to let them fail. Besides, the Democrats owe Michigan and Ohio. Bush will go along because he won’t want the demise of the US auto industry to happen on his watch. He’ll think, “Let the Democrats deal with it after January 20th.” Thus, the problem will be postponed and until the auto industry gets sorted out and banking stabilized, guessing where the bottom is can only be a WAG (Wild Assed Guess).

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Filed under Auto Industry, Economy, Obama, Politics, TARP

What happened?

Yeah, quite a stunning day if you watched your stocks plummet.

Here’s my short theory on how this happened. Keep in mind that I am not an economist.

1). Congress has actively encouraged banks to give mortgages to the marginally qualified (and even to those not qualified based on usual credit scoring). Remember the term “Red lining”? Banks were sued for not granting loans in large enough numbers to people living in certain areas of the city.

2). Easy money by the Fed was a standard policy for way too long which encourages excesses in the markets (real estate in particular in this case). Recall the recent escalation of home values.

3). Congressional oversight of Freddie and Fanny was way too lax. F & F were generous with their campaign contributions and got a lot of slack…. too much. The WSJ and others (including McCain) were complaining about this for years. Zillions of dollars of the mortgages from #1 above were pawned off on F & F which everyone figured was safe as can be cause they are ostensibly backed by the US gov’t.

4). Following the Enron mess Congress in their enthusiasm to do something passed new accounting laws called Sarbanes-Oxley. This imposed a new rule called “mark to market” on how assets are valued.

5). The wizards on Wall Street figured out how to package the shaky mortgages into bond-like instruments that could be resold to banks and other institutions. And, like all manias everybody figured the dance would go on forever. But, the music stopped. When the bubble burst, the new mark to market rule made the mortgage assets worth essentially zero and put otherwise profitable and substantial businesses in (and this is a technical term) deep shit. Banks have strict capital ratios to maintain to be recognized as solvent in the eyes of the FDIC. Holding assets that become instantly worthless does not look good on the balance sheet.

Of course, in a big mess there is plenty of blame to go around. However, the guys who are escaping blame thus far are the guys who should get the lion’s share….. Congress. They have been essentially tossing money at this thing from the beginning (prob 700 or so billion) and now want to throw another 700 billion or more at the wall and see if that sticks. I am not at all convinced that the “bailout” is the right answer. However, in the final weeks of the election cycle it is clear that the politicians have made it their goal to use this situation as an opportunity to get elected or re-elected. And especially the Democrats who repeatedly blocked reforms of F & F and continue to encourage loans to the unqualified. Not good. Kind of like fiddling while Rome burns.

Unfortunately, I think Obama will get elected and prolong the misery. His many proposals mirror those of FDR who, if you analyze history honestly, prolonged the depression. (You can look this up). Obie thinks FDR was just great. McCain has not been swift on this crisis either.

Not fun.

More bailout discussion can be enjoyed (with a handful of Prozac) by reading Thomas Sowell’s article on There’s also an interesting (although arguably incorrect in some aspects) article comparing the US economy to the Titanic.

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Filed under Economy, Obama, Politics

This an’ That

Nancy Pelosi decided to send Congress home on a five-week vacation rather than allow a vote on a bill to allow drilling offshore. She feared the House might pass the bill. She was also mindful of the 70%+ of Americans who now want drilling and instructed her Democrat colleagues to tell their constituents they actually favored drilling. Cynical? Or, just politics as usual? Both me thinks.

The Democrats find themselves in a box. After years of opposing looking for oil in likely places and to stay in the good graces of the environmental movement (and keep the cash flowing), they are now facing an electorate pissed off at $4.00 per gallon gasoline. Pelosi and her associates have been spinning a lot of BS to attempt to confuse the issue.
· Drilling won’t give us any oil for ten years.
· The oil companies have plenty of leases to drill on and they are not drilling on them.
· The GOP favors the big bad oil companies and won’t consider alternative fuels or technologies.
· And, the most laughable of all: Nancy wants to “save the planet”.

First of all, I am grateful that God has granted the power to Nancy to save the planet. But, before she tackles the global warming problem, I wish she would use these considerable powers to get rid of Iran’s nukes. They pose a more immediate threat to civilization than global warming, which, if it exists at all, is not likely to trouble us much until the end of the century.

The other Democrat excuses don’t hold much water. If the leases currently held by oil companies had oil, does any sane person believe that at $120-140 per barrel they would not be drilling like crazy? The ten-year excuse is simply smoke. Numerous reports indicate several deposits could come on line quickly. More importantly, some of the speculation in the market would diminish with the prospect of new supplies becoming available. (Note: I believe that the current fallback in oil prices reflects the oil producing countries pulling back from buying oil futures and bidding up prices. I suspect they fear killing the goose that lays the golden egg if prices stay at $140pb.)

Nowhere in the anti-drilling propaganda is there any mention of the $700 billion dollars sent annually to purchase oil from countries unfriendly to the US. “The largest wealth transfer in history” as many have described it. Not a word from Nancy. On second thought, perhaps she should concern herself with saving the US economy before devoting herself to saving the planet. Just a thought.

T. Boone Pickens, famous oilman, has been running expensive ads touting wind power. No one has questioned how big an investment T. Bone has in wind power and if his public relations campaign may be self serving. Studies I have read recently suggest that it would take an investment of several trillion dollars over the next decade to achieve even 20% of the USA’s electricity needs via wind and solar. And, the wind does not always blow, nor does the sun always shine. Backup conventional sources of electricity will need to be in place to cover shortfalls. So, why not just build nuclear plants? No carbon gases and it’s the least expensive solution. It would take solar panels covering roughly the area of New Mexico to generate the power produced from one 4000kw nuclear facility. Nah. Greens don’t like nuclear. Too risky.

Obama has been slipping in the polls since his triumphal visit to Europe and the collective pants-wetting of the MSM. Cooler heads dissected his lofty rhetoric and found a lack of substance in his speeches. Some objected to his presumptive attitude of having already won the Presidency. (Is that the Presidential Seal on the podium there Obie?) Back home he continued to tack to the middle on some issues, a not unusual approach by left-leaning candidates. However, his flip-flopping on critical issues leaves many Americans wondering what he really stands for and what he would actually do as President. This uncertainty, I think, explains his lack of success against what can only be described as a weak and confused McCain campaign. About the only thing of which we can be certain: Taxes under Mr. Obama will go up….. a lot.

I listened to BHO’s Michigan speech on energy. Of course, he proposed massive government spending to help displaced Michigan autoworkers. No surprise there. He’s got to carry Michigan to get elected. His big proposal is to take away ALL of the profits of oil companies and give every family a $1000 gift to offset high energy prices. Demonizing the oil companies has been a traditional approach of the anti-drilling Democrats. Exxon did report record profits for the quarter. However, if you actually look at the numbers you will see that they paid $10.5 billion in taxes and their profits were only 9%. Does Obama suggest we confiscate the entire profit margin of every company that makes a 9% profit? For the record… that would cover just about every major corporation in the US, most of which make substantially more than that. Insanity or socialism? Hmm… same thing.

Obama’s only mention of nuclear was to say we needed to investigate ways to make it safe and to safely store the waste. IOW, forget about it during his administration. More insanity. He did also mention encouraging fuel-efficient cars through subsidies. If inexpensive fuel-efficient cars are available, people will buy them. But first, they will have to run the old gas-guzzler that sits in the driveway into the ground since it is now worthless as a trade in. He also mentioned keeping your tires inflated as an important piece of his plan. Key the laugh track.

“Bush Lied, Thousands Died”: An update. Recently the US quietly shipped 550 tons (I say tons) of yellow cake uranium found in Iraq to Canada. Much has been made of the lack of WMDs in Iraq. If Saddam had no aspirations for nuclear weapons, why the yellow cake? This piece of news was widely ignored, as were previous discoveries of artillery shells filled with chemical weapons. No one seemed particularly concerned that Saddam had previously gassed 5000 Kurds or used chemical weapons on the Iranians during the Iran-Iraq War. Never understood how liberals could claim he didn’t have them when he had previously used them. Nor do I understand the claim the Iraq war was “all about oil”. If we invaded Iraq for the oil, how come it’s now at $130 bucks a barrel? Oh, I get it. We went after Iraq’s oil so there would be a shortage and therefore high prices and Dick Cheney and his pals would all get rich. Gee, sometimes I’m so dumb.

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Filed under Congress, Drilling, Economy, Environmentalism, Global Warming, Obama, Wind Power

Another Perfect Storm

The fall of 1991 saw the confluence of two massive storm systems off the NE coast: a classic nor’easter and Hurricane Grace arriving from the south. It created what meteorologists called “The Perfect Storm”. Sebastian Younger wrote a book in 1997 using that title and in 2000 a very successful movie of the same name was released. It seems to me that another “perfect storm” is developing on the economic front that could be every bit as devastating and affect more than the east coast of North America.

The first of these “storms” is the so-called “sub-prime” problem. Loose credit and easy mortgages fueled a massive expansion in the US housing market. Some Wall Street wizard figured out that these shaky mortgages could be repackaged as bonds and sold Worldwide to banks eager for high yield. Like the dot COM bubble of recent memory and the tulip mania of the 17th century, the sub prime market unraveled like a poorly knit sweater. Banks lost billions and the Fed responded by throwing money into the system and dropping interest rates as a recession loomed.

At the same time another storm arrived on the scene in the form of rapidly increasing oil prices. With expanding demand in the fast growing economies of China, India and other emerging economies and questionable supplies, prices have skyrocketed. Exacerbating this problem was the dramatic decline of the US dollar and the concurrent speculation in oil futures. (Countless billions have flowed into oil futures with supplies tight and political unrest in many oil-producing countries.)

The confluence of these two storms is likely to give us the ugly twins reminiscent of the Carter Administration: recession and inflation. Those of you old enough to remember those days of 12.4% inflation and 21.5% interest rates may also recall that in that miserable period we also had an oil shortage and gas lines around the block.

Let’s look at these two storms and see what is likely to evolve as a result of the actions of our politicians in this election year. As they say, “Opinions are like assholes: Everybody has one.” Here’s mine.

Storm #1, the sub-prime thing: With actions by the Fed to infuse massive amounts into the system and bailouts, including capital from offshore, this storm would blow itself out. Sure, there would be misery along the way and were it not for Storm #2, would not plague us overmuch.

Storm #2, the oil crisis: This is basically an issue of supply and demand with speculation adding fuel (no pun) to the fire. I agree with Charles Krauthammer that a psychological tipping point for Americans was reached when gasoline prices reached $4.00 per gallon. At the tipping point people start to change their behavior. The evidence coming in suggests people are driving less, using mass transport more and buying fuel-efficient cars. While this is a good trend, it’s not enough to seriously impact demand. Many people remain stuck with long commutes and no mass transit alternative and the Suburban or Escalade in the driveway is now worth less in trade-in than the payments due.

What do the political wizards have in mind in response to the crisis? And, it is a crisis. The cost of oil threatens airlines and trucking companies with ruin and the inflationary pressure will ripple through the economy forcing the Fed to increase interest rates just as we teeter on recession. Well, first you send George Bush off to Saudi Arabia hat in hand to beg them to pump more oil. They must have laughed in his face. They know the US sits on more oil than the Saudis could ever hope for. (They have about 55 billion barrels). The Democrats in Congress have just refused to allow anyone to drill for it for the last 30 years. ANWR is estimated at 10.4 billion barrels. The 85% of restricted continental shelf guess is 87 bb and the 97% of restricted Federal lands? Who knows? Although they do estimate the oil shales of Utah, Colorado and Wyoming hold about 1 trillion barrels of recoverable oil. This, of course, does not include the zillions of cubic feet of natural gas. We don’t have a supply problem. We have a political problem. The Democrats are afraid of the environmentalists and to be fair, some Republicans too. That means drilling is off the table for the near term. Since McCain is against drilling too, a Republican revolt remains unlikely.

Two years ago Congress decided they would get a “twofer” by mandating the use of ethanol. They could please the environmentalists and the farmers at the same time. The law of unintended consequences reared its ugly head and we saw the price of gas go up along with skyrocketing food prices worldwide.

Recently Congress decided that in the midst of the oil crisis it would be an excellent time to introduce a global warming bill called the Warner-Libermann cap and trade program. This 3.2 trillion dollar behemoth was estimated to raise gas prices to $6 to $8 per gallon and represent the largest tax increase in history. Fortunately, cooler heads prevailed and it got trashed… this time. Expect this turkey to be resurrected in the coming veto proof Democrat Congress. This sop to the global warming zealots comes despite recent reports that global temperatures have not increased since 1998, and 2007 recorded a 1.4-degree decline. Go figure.

In another typical move by Congress they herded the heads of the US oil companies to Washington and grilled them about their “excess profits”. For the record, oil companies average 8.3% profit compared with tobacco and beverage companies’ 19.1%, pharmaceutical and media at 18.4% and technology companies at maybe 40%. Of course, untroubled by facts, the Democrats immediately proposed a windfall tax on these profits. They are seemingly ignorant of history. This was tried during the aforementioned Carter Administration. The result? Domestic production fell some 5% and imports increased by 10%. Gas prices went up by 60% and overall inflation hit 12.4%. This too fell to the threat of a Bush veto, but next time around…?

Still more recently 97 Senators voted to stop putting oil in the Strategic Petroleum Reserve, so they know it’s a supply problem. Strangely, 71 voted shortly thereafter not to approve drilling in ANWR. (I still think some Republican Congressman should introduce a bill to rename the place the “National Artic Wasteland”. I like the acronym too… NAW.)

With Congress likely to seed the clouds of this two headed storm and make it worse, it seems the US is determined to select as the Captain of the ship someone as oblivious to the fury of Mother Nature as George Clooney’s character in the movie. Mr. Obama has promised to raise numerous taxes, the equivalent of steering the ship into the heart of the storm. Just increasing the capital gains and dividend taxes as he has promised will shed another 2000 points off the Dow according to John Rutledge, a wise economist. Americans–especially middle class Americans–have already seen their wealth greatly diminished by the deflation of the US dollar (down 33% against the Euro), the decline in the value of their IRAs and 401Ks due to the drop in the stock market of nearly 2000 points and the loss in equity in their homes and SUVs. Obama’s supposed concern for the middle class is a sad joke. His other promises add up to damaging domestic corporations and driving them off shore with a concurrent loss of jobs. So much for punishing the wealthy and helping the middle class.

OK. I’m pessimistic, but if I were holding a ticket for this cruise I would strap on a life jacket and cinch up my jock. It’s going to be a rough voyage.


Filed under Economy, Oil