The Dow is down 275 points this morning, below 9900 and falling like a safe dropped from a helicopter. It just touched beneath the absolute low hit in the “flash crash” of May 6th. Consumer confidence plunged from 62.7 to 52.9 in one month. Recent polling shows that over 62% of Americans think the nation is on “the wrong track.” Exactly what is this market, supposedly a leading indicator of economic activity, trying to tell us?
The market is telegraphing that there is no confidence in the present government trajectory toward tax increases, more borrowing, and higher deficits. It also dislikes the dead hand of government in the management of financial institutions, automakers, and health care. It deplores the idea of saddling the economy with cap & trade costs, and realizes that “stimulus” spending largely directed toward the public sector is totally non-productive. Investors and businesses have seen this movie before – when the very similar activist policies of FDR failed to cure the Great Depression which lasted well into his 3rd term.
Vice president Joe Biden has said that we “need to spend money to keep from going bankrupt.” Nancy Pelosi has stated about the Health Care Bill that “we have to pass the bill so we can see what’s in it.” Christopher Dodd comments on his financial reform legislation: “No one will know until this is actually in place how it works”. Of course no one can forget candidate Obama’s comments on cap & trade: “electricity rates will necessarily skyrocket,” and on taxes: “it is better for everyone when we spread the wealth around.”
Peter Orszag, the OMB director responsible for planning budget deficits beyond contemplation and cooking the books to make Health Care appear feasible is bailing out. President Obama just got slapped around by the leaders of the G-20 when he floated a trial balloon involving more massive “stimulus” spending. These heads of state are belatedly awakening to the fact that Keynesian economic theories eventually crash, but Obama, Summers, Geithner, and Biden have yet to catch on. Unfortunately, they never will because they are so completely wed to big government along with massive spending, taxing and regulation schemes. Of course, buying votes from SEIU and UAW members is the prime benefit to the administration of the mix.
This administration is stealing from our grandchildren and spending our national future down the drain. The red ink must be staunched, entitlement spending reformed, Health Care repealed, and government cut back. Obama will never consider it, so the only way to begin a reversal is to elect a Congress that will refuse to fund these massive programs.
The next time you see a baby, stop and wonder how he or she will think of our generation in about 50 years. Then promise that baby that you will vote now to stop this insanity before it is too late. No American has the right to live in the present off the future earnings of another.