Obama: Bad Start for "Hope," "Change," and "Audacity" - By Joe Duarte
President Obama, in his radio address, tried to salvage his less than striking victory on getting the House of Representatives to pass his economic stimulus package over the weekend. But the reality of how difficult it will be for the president to accomplish anything in Washington has clearly begun to set in, sending financial markets into what could be another down leg, and a possible test of the November lows.
It has been said that "those who ignore the past are destined to relive it." And the words "I won" recently uttered by president Barack Obama suggest that for all of the hype and so called evidence of his ability to outthink his opposition and circumstances, he may be another in a long line of elected and non-elected leaders who falls into the trap of believing his own publicity and overestimating his mandate.
Mr. Obama was just as likely elected because he wasn't George Bush as for the fact that he is Barack Obama, as the population of the U.S. had clearly had enough of Mr. Bush, Mr. Cheney, and their cast of cronies. Mr. McCain was too close to Bush in the eyes of too many voters, and Mrs. Clinton, well, she had Mr. Clinton with her, which aside from her own scariness, made her even more scary. So we had Obama, and he was elected, with fingers crossed.
Yet, in his first week plus as president, he has clearly failed to meet expectations, proving to be as partisan as anybody before him, and bringing about as partisan a response, or more so than his predecessor, who would occasionally get a Democrat or two to vote for his proposals. Furthermore, the world has huge expectations of Mr. Obama, and the fact that even in this very early stage of his office, he has failed to meet them, is not going to help matters any. The global opposition to America, Iran, Russia, and others are likely to take anything less than a huge hands down success on anything that Obama does as an opportunity to advance their ability to project their own power, regionally and internationally.
Let us make this perfectly clear. Obama had to hit a Grand Slam on the stimulus package, and he didn't. Instead he got a bases empty double, and if he keeps this up he's going to be left stranded on second base, because as the Senate argues about whether sexually transmitted diseases and contraceptives are economic stimulus, and Mr. Obama wails on Wall Street for getting bonuses, the streets of world capitals are full of striking workers, the foreclosure rate in the U.S. is skyrocketing, and cities like New York are cutting services, laying off workers, and raising taxes. Each day that passes more corporations are jettisoning workers, and decreasing their expectations for the future. And the seeds of doubt, already planted, could sprout into trees within weeks.
As Peggy Noonan puts it: "It looks like a win but feels like a loss," in fact "President Obama could have made big history here. Instead he just got a win. It's a missed opportunity." Noonan asked "do you know anyone, Democrat or Republican, dancing in the street over this?" And answered clearly "You don't. Because most everyone knows it isn't a good bill, and knows that its failure to receive a single Republican vote, not one, suggests the old battle lines are hardening. Back to the Crips versus the Bloods. Not very inspiring."
And there is more. According to Noonan, here's how Obama let a Grand Slam slip through his fingers:
* "House Republicans had conceded that dramatic action was needed and had grown utterly supportive of the idea of federal jobs creation on a large scale."
* "All that was needed was a sober, seriously focused piece of legislation that honestly tried to meet the need, one that everyone could tinker with a little and claim as their own."
* Instead, the Democrats crafted the bill "privately," and made it to suit their own interests and agenda.
* This led to "a inal bill was privately agreed by most and publicly conceded by many to be a big, messy, largely off-point and philosophically chaotic piece of legislation."
* And finally, and perhaps most important: "The final bill was privately agreed by most and publicly conceded by many to be a big, messy, largely off-point and philosophically chaotic piece of legislation."
* "The Congressional Budget Office says only 25% of the money will even go out in the first year."
* The Wall Street Journal "in its analysis, argues that only 12 cents of every dollar is for something that could plausibly be called stimulus."
Noonan says that there is a condition known as Goldman Sachs Head (GSH) where you get the feelign "the party's never over," where "You take private planes to ask for bailout money" while "you entertain customers at high-end spas" your speech "writers prep your testimony" as "you take and give huge bonuses as the company tanks." GSH "is Bernie Madoff complaining he's feeling cooped up in the penthouse. It is the delusion that the old days continue and the old ways prevail and you, Prince of the Abundance, can just keep rolling along. Here is how you know if someone has GSH: He has everything but a watch. He doesn't know what time it is."
Noonan, who we agree with on this, thinks that GSH is not exclusive to Wall Street, but is also prevalent in Washington where "pork," "payoffs," "eccentric base-pleasing," and "group-greasing forays into birth control" can be disguised "as stimulus" and made to pass the House of Representatives.
Sure getting bonuses while your company sinks is ludicrous, and Obama was right in saying it. Yet, it seems a little thin when Congress is giving itself a raise every couple of years, and the president spent $175 million on his inauguration. Yet, somehow Mr. Obama, Ms. Pelosi and company seem to think that when they spend money on their stuff, it's o.k. even thuogh it's just as ludicrous, and in many ways worse then the bonuses on Wall Street. After all, they are public servants, while Wall Street is Wall Street, a money making unscrupulous place that is full of carneys in suits.
What we're getting at is that none of this makes sense to anyone who actually works for a living and actually pays taxes, unlike our new Treasury Secretary, Mr. Geitner, who is now in charge of spending our tax dollars.
In fact, as Noonan puts it, this lack of connection to reality is "what the stimulus bill was about—not knowing what time it is, not knowing the old pork-barrel, group-greasing ways are over, done, embarrassing. When you create a bill like that, it doesn't mean you're a pro, it doesn't mean you're a tough, no-nonsense pol. It means you're a slob."
As Noonan writes: "That's how the Democratic establishment in the House looks, not like people who are responding to a crisis, or even like people who are ignoring a crisis, but people who are using a crisis. Our hopeful, compelling new president shouldn't have gone with this bill. He made news this week by going to the House to meet with Republicans. He could have made history by listening to them." Instead, he's on second base, stranded, in the ninth inning, with two outs, and a one armed, over the hill pitcher coming to bat because no one on the bench who can actually hit the ball wants to play in this game.
Conclusion
Obama's first real move was tepid at first. The only thing he's shown so far is that he's a cool dude who "won" an election and can speak well about what needs to be done, while giving the impression that he can do something about what needs doing.
Unlike his predecessor, who could not speak well, Mr. Obama has hope behind him, for a little longer. This is a hope that he clung on to win. This is a hope that many believe in. And, it is a hope that will turn into cynicism and spite if he doesn't deliver, and deliver something believable soon, because even ten days into his term, he is running out of time.
The problem with having power is that it blinds you to circumstances. Like a tennis player who has an open court before him, but misses the shot because he has too many choices, those in control fail to seize the moment and do the right thing, giving in to the elixir of power and the thought that it will last forever. Mr. Obama and Ms. Pelosi have that look, much like the highly criticized President Bush before their assention to complete control.
And that suggests that there will be trouble ahead. So far, all we've seen is that Mr. Obama is just as partisan in his own way, as Mr. Bush and his gang were before him.
The markets have figured this out, and the selling has begun, all over the world, in all asset classes, as the dash for cash has begun. It could turn around at any time, given the fact that this bear is very long in the tooth. But, there is little sign that any bounce could last at this point. As investors, this is yet another opportunity to consider the short side of the market, either as portfolio protection, or as a trading strategy for experienced, well financed, and nimble traders.
Trade the correct trend, every time.
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