As I watched the election coverage last night I thought of the scene from History of the World Part 1 where Comicus changes course in his routine by saying "politics, politics, politics."I doubt that too many people who were honest with themselves were surprised by the outcome. By the same token I would not call this any sort of validation of the Republican party so much as evidence for little to no patience for leadership that fell dramatically short of what was promised.
WRT leadership falling dramatically short in the case of jobs I don't think the Whitehouse understood the magnitude of the problem (same as the Bush Whitehouse) and with regard to Obamacare, thus far, I think it was tragically poor execution of what from 30,000 feet is the right idea. When I say "from 30,000 feet" I mean that health insurance is a mess as is the manner that many people access healthcare and this should be "fixed" somehow. I don't think too many people on either side of the aisle would have disagreed with that before Obamacare. Last night was the first time I had heard that McDonalds got a waiver of some sort on the health insurance requirements for employees. If true, how does that not raise a red flag for the President?
The other thought I had as the result was coming through was Frank Costanza screaming "you want it, you got it!" I would be shocked if things improved such that the national mood changed between now and the next election. If that is correct then the Democrats could win it right back in 2012 although I can't envision a scenario where Obama wins a second term.The housing market seems like it will be a mess for many more years. The economy seems unlikely to generate the natural demand that could create enough GDP growth to meaningfully improve the jobs situation, I doubt that today exists a political will for brutal choices that did not exist yesterday and we are still going to learn a little bit more today about what next desperate steps the Fed is going to take.
We still have a long way to go.
20 comments:
All that's left to do is go to Staples and press the "that was easy" button.
"that was easy button." well done!
We need a couple of Anatolian Sheepdogs guarding the chicken coop , but it's always either the wolves or the foxes guarding the chicken coop. Place your vote. Same outcome.
This country is desperate for true leaders - politics and business. Shared pain and pragmatic approaches seem lost in the thought process for society. Maybe it's because so many are from the suburbs instead of family farms? I don't know.
Seems the only way to make it in anymore is enter the world of financial engineering or reality TV. Quick riches for bad behavior.
RW,
thanks for the link on perm.portfolio.
Jeff from milan, italy
Roger, you are dead-on right with your commentary. Unlike you, I can envision several scenarios where Obama gets re-elected in 2012. The 2012 elections hinge on how Obama and the new congress (Democrat Senate and Republican House) interact; vetoes are, no doubt, coming. If Obama learned from Clinton, he will play ball with the Republicans, as opposed to stiffing them as he has done to this point, and some of the blame (or credit) for the situation in 2012 will correctly be the Republicans. Then, it depends on who the Republicans nominate (for example, the Republicans in my state, CO, blew generational opportunities to pick up a senate seat and governor seat by nominating candidates that are too far to the right [looks like the senate race [[Buck vs Bennet]] is going to recount] or that had too much negative baggage [governor candidate Maes got only 11% of the vote]). My state's Republican party is definitely in the lower 50% when it comes to smarts! For the good of the country, hope the national Republican party does not follow their example.
i guess embedded in my comment is an assumption that Obama will not follow Clinton's lead...
The benefit of a National Health Service is that everyone pays for it, regardless of how much they use it. If you're just out of college and working in a low-paying job, you're subsidising your parents'/grandparents' health care costs. If you're fit and earning good money you're subsidising more. If you're retired and/or on a low income, your health care costs are being mostly paid by higher earners.
This of course goes with the caveat that young = healthy and old = more medical care needed.
What tips this 'fairness' is when you have unwell people come into the country just for health care and then just leave, without them or their family paying into the system.
As regards to results in 2012 - surely no one can predict, with much certainty, what's going to happen between now and then? What if oil goes down to $40-50 dollars per barrel over a sustained period, other commodities also halve in value, all troops are pulled out of Afghanistan, Gitmo is closed, joblessness goes below 8%, the Yuan rises by 30% against the buck and everyone gets a free unicorn for Christmas?
Ok the Yuan rising by that much is going a bit far but you get my point.
i like the free unicorn bit
tell me more of this free unicorn i shall be receiving XD
You can have the unicorn, I'd just as soon get a Ralphie Leg Lamp.
Assumptions about the electoral future of the current occupant of the White House are just that, assumptions.
Vis-a-vis an investing blog such as this, it will be interesting to see what impact the Party of Tea (formerly known as the GOP) will have on investing. Gee, we've had a nice go-up past year or so in both bonds and stocks under Obama. (I know, I know. But if BO can be blamed for the lousy economy, maybe he can take credit for the market moves, eh.) Now, if those markets weaken, it will be difficult for the Tea folks to avoid some of the blame, seems to me. Isn't that how it works? Mega ditto for the real economy.
So let's see if the Tea-types can actually govern, can actually help the economy.
BillM
Last night we saw the end of the Republican party and the beginning of a Plutocracy, a party that is bought and paid for by corporate / secret money.
It was a test to see how crazy their candidates could be and how far the ads could go.
I've added some assets from the defense sector and moved some more offshore. Decided not to sell any more long bonds for the time being too.
As I've commented elsewhere, Panem et circenses, “Bread and circuses:” There are too few citizens devoted to civic duty and too many devoted to being fed and entertained.
The witch hunts will begin as soon as the new congress is in session: There will be no solutions but plenty of scapegoats. It will take a lot of red meat to prevent folks from noticing the deficit climbing ever faster w/ nothing but more tax cuts and insignificant spending cuts on the table. Anyone who makes a serious attempt to cut something significant like the defense budget or the entitlement trusts will be drowned in a tea barrel before they can even squeal.
If Obama were as politically astute and tough as some say he is he'd insist on Paygo: Every bill must have full funding built into it over its life/10 years or it's vetoed; that would flush the deficit hawks right out of the Bushes to be potted for dove stew. But I doubt he has the stones.
I'd make popcorn and watch a show like that though; the rest of the circus, not so much. [shrug]
After that post, I need a beer. LOL
The Repubs probably thought they weathered the Tea Party storm (even used them to pick up seats) and now it is back to business as usual. I think they will be sorely mistaken, especially if the economy doesn't improve drastically.
As for me, I grew up a Democrat in the heart of a union town (Flint, Michigan), but after working in the government, I am libertarian. If we can't reduce their spending and power, the next best thing is stalemate. The politicians and leaders at the top are unscrupulous beings who sell to the highest bidder while the government workers themselves, while intelligent, are so wrapped up in red tape and bureaucracy that they become apathetic, which leads to waste and inefficiency.
At some point the market or world events will correct our malinvestment and spending problems if the politicians won't be proactive, but it won't be fun.
Only 2 things will get our country out of this enormous debt trap...1)tremendous growth on the level of 6-8%. That just ain't gonna happen! 2)depression-like conditions for the vast majority of the population. Politicians will never let that happen.
Investment solution: Invest elswhere
Call me Polyanna, but I am a bit more optimistic about the near-to-mid-term future than the general tone above. Now that both the Dem and Repub parties have skin in the game, and there is a general realization that spending and taxation (equates to size of gov't) must be brought under control, all the politicians in Washington have an incentive to see things get better and, hopefully, will honestly work to provide an environment where things can improve (economic growth). After all, they all want to get re-elected. In Obama's case, one term would be just too obvious as Carter/Bush I-like, and history would likely record his presidency as a failure.
My optimism is tempered, however, by a serious doubt that the improvements will be sufficient to pull us out of the current mess without significant pain.
JCarr
My current plan is to corner the market on green ink.
When QE XXII is rolled out, I will be so rich that Warren Buffet will be working for me...
Well it is happy hour but i felt compelled to say something anyway.
You all do not get it.
It is like the old analogy about blind people feeling a elephant and describing their findings and everyone describing something different.
Everyone is getting a small piece of the puzzle and no one is describing the big picture.
@RW,
I've added some assets from the defense sector and moved some more offshore.
Can you expand here a bit?
I assume the defense sector increase is due to more Republican influence?
More importantly, I'm interested in the "moving assets offshore".
What exactly do you mean? More foreign and emerging market exposure, or literally removing money from U.S. domiciled financial institutions to other nation's financial and banking institutions. What is the reasoning?
I'd be curious on your take on this piece from David Merkel of Aleph Blog:
http://alephblog.com/2010/11/02/time-to-grow-up/
What is the END GAME here?
I'm still a fairly young guy (36 years old) and I'd like to be optimistic about the next 10-20 years, but when I look out at this wave coming in terms of Boomer's entitlements, Social Security and Medicare, and the pension promises at the state, municipal, and corporate level, I ASK "HOW IS THIS EVEN REMOTELY POSSIBLE".
I look at the promises made and just think to myself "HOW?" How does any of it get paid in anything close to today's real purchasing power.
Maybe I am missing something but to me this makes the housing situation look like a triviality in comparison.
http://www.jugglingdynamite.com/blog/_archives/2010/11/2/4670345.html
Kyle Bass and Rogoff interviews. Very relevant to my previous comments/questions.
Bass says we have to make very difficult decisions NOW in order to avoid APOCALYPTIC ones later
I agree that nothing here explains the big picture
SEG
It is simple. The democrats have been trying to reform banking = remove speculation.
Obama was stuck getting anything through Democratic and GOP senators because wall street owns the senate.
The speculators on wall street just spent $1 billion to take down Obama.
Those congressmen that fought wall street found massively funded canadidates in thier districuts.
Americans are dumb beyond belief.
MikeC, I meant both: I have fairly extensive investments in other countries but I've also had a Swiss bank account for decades and another account elsewhere. The reasoning is simple: I can make transactions I couldn't make here and all of my assets are not within a single government's reach. Harry Browne's original work influenced me in several ways you see.
As to the litany of obligations you cite, you are indeed missing something: When examining future liability numbers it is a fundamental error to neglect the asset side of the ledger and the productivity side of future operations. The asset side of America is at least an order of magnitude greater than the liability side and productivity growth could reduce the national debt to trivial levels in less than a decade if we could only break this damnable political log jam and get out of the liquidity trap.
All due respect to those who wish to balance the national budget (Merkel's post was excellent otherwise btw) but nations must look and invest further ahead than each fiscal year; much further if they wish to prosper. Needless to say I expect nothing like that from this congress.
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