TheFundamentals

Interesting combination of factors which resulted in a novice politician being elected president and being supported by an almost veto proof congress led by the most liberal long standing representatives and senators in his party. A real problem for him in two or three years. Why you ask? Well, lets look at what happened and why. First, the folk were fed up with Bush and Iraq and deficits and poorly performing government activities; mostly because so much money is wasted and government spending just keeps growing rapidly. Next, the preeminent democratic candidate is not well liked by many in her party. Plus most folk are still fed up with her husband and his oxygen inhaling excesses. So, the republicans are out of favor and the top democrat is out of favor and along comes a kid who is young, glib and runs a better campaign than anyone else. Boom, he’s elected along with even more of the folks in congress and they read the election as an opportunity to spend, spend, spend. Some call it payback. Now, in 2001 we had a similar situation with the roles reversed. Sick of Bill, economy tanking and then boom, the planes hit. So, that president spends a ton of dough on crap, cuts taxes so that the boom can be artificially extended and an overhyped fed chairman supports the whole mess with dirt cheap money. It’s déjà vu all over again in 2008/9 only there are more zeros after the wasteful spending and the social programs are written in California and the northeast corridor rather than Texas and South Carolina. Where does it end? Who knows? Can the democrats spend their way into correction avoidance? Big question. No one will take the medicine and rebuild on a stronger foundation. No one will ask the unions to back off; terminate bloated government bureaucracies; lower business taxes where jobs are created and raise taxes on the overpaid top ten percent. No one grasps that without true wealth creation – extraction, growing, manufacturing there can be no service economy. And we continue to plaster the walls of foreign banks and institutions worldwide with US paper. No fundamental change again; just temporary fixes in an attempt to avoid a complete collapse of the so called service economy.

Time to think about TheFundamentals.