Tuesday, November 25, 2008

Expectations and False Hope

Recently, some authors and commentators have stated that many people voted for Obama not really knowing what he would offer -- that they really could not define clear logic for their selection. It has been my experience with people I interact with; e.g., my friends and family members in various parts of the country (not here in Utah) that most people do not study the issues or the candidates to any depth. They make their determinations on face value and opinions they gather primarily through the MSM. With that being said, McCain was a poor option.

McCain was and is an uninspiring politician. Obama painted him effectively as Bush III. The bulk of the conservative and Republican talking heads were unconvincing in their efforts to paint McCain as a viable option.

Obama was someone other than a Clinton. He was not Gore or Kerry -- two individuals that make McCain look like a genius. Obaba is well-spoken when giving a speech. He is young but somewhat of a novice. He has little experience. For some, this is endearing.

When your experience is limited to being a community organizer, a short-time state politician and a Senator with only a few years experience (most of that time was spent running for President), your really do not have a great list of friends capable of running federal departments. He'll be picking party stalwarts and ex-Clinton insiders. His roll-a-dex is rather light for highly-qualified senior managers. Not change anticipated in this area.

The George Bush White House and the Nancy Pelosi and Harry Reid Congress should go down in history as some of the worst ever. They presided, as did to a certain extent Reagan, GHW Bush and Clinton, over the largest increase in government ever, coupled with the largest debt ever -- namely foreign. A debt over 10 trillion and increasing daily.

Obama will do his best to instigate some of his own government expansion from climate control measures and cap and trade to socialized medicine to labor reorganization. However, this financial crisis is going to tie his hands.

Yesterday, Obama made a promise to use a massive stimulus program to "jolt" back on track an economy. He also mentioned -- now this will shock those who voted for CHANGE and HOPE -- that a looming huge budget deficit will require cutting programs and reconsidering priorities.

His team members are going to need every bit of the time allocated by the Presidential Transition Act to get their hands around the issues confronting the nation -- if at all possible.

Each day, there is something new. It is a Citibank rescue one day and then the Fed spending hundreds of billions more on a suite of rescue packages: buying up to a $100 billion of debt issued by government-sponsored mortgage enterprises, buying up to $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae, and launching a $200 billion facility to support consumer finance, including student, auto, and credit card loans and loans backed by the federal Small Business Administration.

I am not counting on realized any personal investments I have. I consider all gains to be gone, now that includes principal, never to be recouped. Why should I assume that things will turn around -- that the markets will rebound to 2007 levels, say within ten years? There is nothing to back up dollar. There is nothing backing up any bailout -- the false assumption that the government will have the money to make good on its promises.

The government will go broke. How can an entity that is going broke provide a stimulus package that could be $700 billion over two years? Where does this money come from? Why does anyone think the consumer is going to use it to jump-start the economy again? Is the average consumer going to go out a buy stuff? Some maybe. However, a consumer who has lost all hope of a decent retirement and knows there will be no social security, should put that money in a savings account that pays 1 percent annually. More likely, he/she will pay down debt...which is not a bad move either...hopefully never to return to it.

There are serious flaws to the economic underlying system. Until they are rectified, the political promises and desperate bureaucratic actions will be band-aids.

Sadly, Obama is going to preside over a desperate situation. The Obama fans are going to be sadly disappointed. The hope and change he promised is looking like it will come up a short to his admirers. Perhaps his is not the messiah.

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