A quick review of the broad stock market performance from Election Day, November 4, to March 6 shows a decline of 31% on the DOW and a 32% decline on the S&P. The markets are an indicator of future results not just a reflection of the current day news stories. You hear the national media outlets quote a decline of 20% since inauguration but the true reflection of Mr. Obama’s policies on the economy should be reviewed from Election Day.
After absorbing all of the bad news of September the market fell to 8,176 on 10/27/08 and then climbed to 9,625 on 11/4/08 an increase of 18%. So the markets open on election day with optimism. The instant it was assured Mr. Obama would be the new president the markets started to fall.
As I said previously everytime the new administration comes out with a new policy proposal the markets sell off. Fortunately the US economy is historically robust and will survive even Mr. Obama and his wrong headed policies. The question is how strong a recovery we will experience. If we keep on the track we are now on, the recovery will be weak. If the new administration will take note of what not only the US market is telling it, but what the world markets are telling them we will have a robust recovery.
We already have some bad law to absorb with the latest stimulus plan. The make work pay credit is a terrible idea. What this credit does is refund social security taxes on the first $6,452 of wages for what the administration claims will be 95% of all taxpayers. What this means is that we are going to take funding from a program that most would agree is already almost bankrupt. Not only that, we are doing this as the largest demographic in our country, the baby boomers, are approaching retirement age.
If that was not bad enough I do not see anywhere in the legislation where the 95% of Americans who will now be paying less into the social security system will have a corresponding reduction in their benefits. How does Mr. Obama propose to pay for this? There is no direct source of funds to social security for the reduced funding. However, he does propose to offset the reduction in revenue by implementing a cap and trade system. This stealth tax will more than off set the cost to taxpayers. We will see everything we buy go up in price. Our utility bills will most likely increase more than the $400 credit the legislation gives us.
This provision of the bill alone should have been enough to cause it to fail. Mr. Obama claims that there will be no off budget items, yet I have not seen this disclosed anywhere. Nor have I seen any one show a calculation of how much the cap and trade will cost hard working American families who are already stretched to meet their monthly obligations.
This administration is employing smoke and mirrors with great skill. We must look behind the curtain. The policies being proposed will create more poor people and make everyone poorer. The unemployment rates will sky rocket and we will have more people dependent on the government. Could that be Mr. Obama’s desired end result?
March 10, 2009 at 10:41 pm |
Brookes Wicker… this blast from your past…. has a different point of view…
HMMM… If my long term memory serves me correctly, let’s see last august…. … the first bank bailout – intended to help folks with mortgages – started with the Bush administration? Correct?
and while I’m at it… our family has seen in the last eight years a net loss of family income from wages of almost 1/4 which means one of us lost almost 50% of salary, benefits, and retirement…
This current economy is a REALLY hard problem that is going to take BOTH sides to step up and do the right thing!
You can uninvite me to be your friend!!!! Ha Ha
March 11, 2009 at 12:24 am |
Jacqui
Thanks for your response. I do enjoy hearing different points of view.
I started the blog to save me time from responding to my clients inquires. In the past I did all of this via e-mail and ended up sending the same thing over and over. Now I can post to one spot and anyone who has an interest can read and comment.
You are correct that the bank bailout, which I also opposed, was started under the Bush administration. I am not railing about Obama per say but about his policies which I believe will cause great harm to our economy. We will survive these policies but we will have a weaker economy, and a world economy, as a result.
I do not happen to believe there is any such thing as a company that is too big to fail. Take GM for instance. What would happen if they go bankrupt? Does anyone really believe that no one is going to manufacture cars in the largest market in the world? Most of the people currently working for GM will continue to build cars and most likely in the same location just at a reasonable wage. GM would be a stronger and more competitive company as a result.
Just like the auto companies, Citi and Bank of America should not be given a dime more of taxpayer money.
I do not know your family situation so I can not comment on the past 8 years. But the country as a whole prospered during that period despite the out of control spending of our government, the war, and the terrorist attack.
I agree we need to do the right thing, which is stop spending money that does not belong to the government but belongs to the taxpayers who earned it.
Please do continue to read and comment. Not all of what I say has such a political slant. Most is related to good financial common sense.