Monday, June 1, 2009

The Political Smog Enveloping Capitalism

If the Obama administration did a sudden 180 in terms of anti constitutional behavior, Capitalist Pig Bob (CPB) would stand in shoulder to shoulder support. Yet CPB thinks there's less than a 10% chance this administration takes corrective action necessary for organic free-market forces of capitalism to sprout.
The looming problem is the paradoxical short-term bullish stock market reaction to the gargantuan budget deficit dripping and dropping with three trillion dollar plus force while bullying nearly every private business sector. Even seasoned capitalists are in jeopardy of being hoodwinked and silenced in this political smog. Caution, as the synthetic sweetness of this spending spree could eventually envelope and choke-off free-market capitalism.

Supply side economists, like Steven Moore of the Wall Street Journal argue that government spending without tax cuts could spell economic disaster in due course, I agree.
An unprecedented economic low could likely take hold as housing prices continue to fall, interest rates remain stuck at Japan, employment is merely smoothed by more mediocre govt jobs at 10%+, and the Administration's forecast for 2009 GDP growth of 3.5% falls liberally short. Peter Orszag stated "unemployment would peak at 8.1%" a little over two months ago. His forecast turned out to be wrong as the rate today stands at 9.4%.

Even if the employment scenario improves on the surface, we are more concerned with quality of jobs over quantity. A larger govt bureaucracy and dead-end type jobs will not provide a healthy environment for free-market forces to stabilize and battle back to a healthy normal, rather a manipulated new abnormal. It is difficult not to argue the spending smog created by this Administration is a short-term head fake toward a long-term un-American paradigm, caution...

Recently, computer generated mathematical modeling forecasts with the best minds on Wall Street inputting data failed badly in predicting real estate prices. We cannot afford our public sector servants being wrong with their GDP growth forecasts in 2009 considering the mammoth stimulus packages, no way no how.

The govt is the lender of last resort and some feel the banking ball and chain Hank Paulson handed to Obama's team may have been taken advantage of. Ex V.P. Dick Cheney reiterated some of these feelings on The Kudlow Report just last week. Cheney sounded concerned with the violent direction political policy has swung under Obama. In fact, he sounded somberly concerned for the future of free-market capitalism.

CPB adores free-market capitalism, where bomms, and busts, peaks and toughs, success and failure, fear and greed evolve as a result of the other, not as a result of Big Brother pooling public with private sector funds. Just like the separation of church from state, separation of govt/public interests from private interests is paramount, yet President Obama and his Administration continue show no respect.
The confusion this Administration is creating on the back of the real estate and credit crisis is rooted in their belief govt knows best, and that's dangerous. Their rhetoric and pending legislation is explicit in the theory private sectors are unable to right themselves: whether health care, energy, and the list goes on.

CPB understands it's the risk taking American pioneers who created the States and in turn created the federal government. Why the federal govt insists on printing and diluting trillions of greenbacks through the private sector is troubling.

The current crisis was born in the halls of Congress more so than any private sector. Whether repeal of Glass-Steagall in 1999, or a result of the latest 2009 Obama three trillion dollar budget deficit, every private sector is being dumbed down by stricter regulations/controls and higher taxes.
Even though the ultimate price is still a mystery, the path this administration has chosen is unparalleled. If you believe in the fiscal conservative wisdoms of President Ronald Reagan, or economist Milton Friedman, the hovering spending smog is cause for great concern. Only 4 months into a 4 year term, this political freak show will go on, and the Psychology of the Call team promises to monitor it for you.


Anonymous said...

So much for global warming, it's the political spending smog we must worry about more, good point!

Anonymous said...

Smog dog bog, obama will deliver us to the promised land, wasn't his mom jewish?
Avi B

Anonymous said...

The budget deficit poses sig risks, but I believe Barack will back off from the spending in '11. He wants to win a 2nd term, did you forget? I see him pulling back the reigns at $2T, and then passing pro-capitalistic type bills to win in 2011.
S. Cohen

Anonymous said...

Obama is a winner, yet I read your negative take on him. Your pragmatic style makes it easier to accept. I am a bull and feel everything he has done is working. Your point about the smoothing of jobs is good though. I do not want to see my grandchildren working for the govt. I also am against Cap and Trade and Employee Free Choice Act, neither have passed and hopefully will not.
Dave from Seattle

Anonymous said...

I hate Obama, yet I like the fact the market rebounded. You take very hard stances, be careful.
JJ from Detroit

Anonymous said...

If unemployment goes through 10% by August, then shopping season comes? The govt printed all this money, what next? Open border with Mexico? legalizing everything evil?
Kansas City Joe