The Big Bluff

In poker, a player will do his/her best to observe certain occurrences on the part of their playing opponents to determine if that opponent unconsciously or subconsciously signals some indicator about their hand. For example, one might observe that a player makes a certain body movement or touches a particular part of their face or makes a facial expression that is consistently coincident with either a strong, weak or neutral hand. These moves are described as “tells’ meaning simply that the move or action tells something about the players hand that cannot otherwise be determined. Of course, the wily player might actually fake some tells to set up their opponent to expect something that is not there when the size of the pot and the strength of the hand is in their favor. We, of course, are dealing in the world of politicians, bureaucrats and folk with a great propensity toward fiscal promiscuity. Consequently we don’t have to worry about excessive wiliness.

Bush II inherited an economic slowdown and a lackadaisical approach to dealing with muslamic terrorist threats from the Clinton administration. He never said a word about inheriting either. He dealt with the hand he was dealt. In the former case, he cut taxes and didn’t cut spending. Result: massive deficits and record debt run up. In the latter case, he invaded Iraq and Afghanistan endearing himself to the military/industrial complex and spent hundreds of billions of more dollars that the country did not have producing pretty good temporary economic results and spectacular, not so temporary, record debt levels that continue to rise as you read this essay. Like it or not it is what it was. Huge government spending; huge deficits; very low interest rates to fund a record setting bubble in housing prices; huge debt and some temporary good economic results but it could not last; it did not last; and it all came tumbling down shortly before his successor took office.

Which leads us to Obama. Almost 17 months in office now. Pretty early to really tell just how much of a mess he will end up leaving his successor but it is not looking good and it could well be the mother of all inheritances. Two major differences so far between Obama and Bush II. One, Obama and his gang cannot blame Bush II enough for the mess they inherited. We will come back to that message in a minute and what they are saying to us each time they play the blame game. Two, they are not cutting taxes; they are just spending at triple the debt producing pace of Bush II even though revenues are way down. Bush II averaged $50 billion in increased debt per month during his 96 months in office. In the sixteen full months Obama has been in office, the debt has increased at the rate of $150 billion per month! Not good. But what the heck, they’re Keynesians.

Now, back to Obama blaming Bush which Bush did not do to Clinton. What is the significance of a leader and his sycophantic minions who constantly blame the other guy for the mess they’re in? What can we conclude from this action? What does this move “tell” us? Well, it “tells” us they do not have a strong hand. It “tells” us that they are bluffing; they are faking; they are hoping that no one catches on and no one calls them on their hand. It “tells” us a lot about them and their skill and their understanding of the game they are involved in. It “tells” us they are amateurs and that they are pretending they can pull it off. They need a reminder that they are in a game with some very wily players. Watch out.

How much do you want to bet on this gang? Before you answer, know this. You’ve already got a lot of money in the pot. Do you want to protect it and try to pull it off? Or is it time to fold and go back to TheFundamentals? Live within your means. Pay off your debt. Save some for a rainy day.  Think about it.  You get to vote your answer on Novermber 2, 2010.  In the meantime, the young president wants to put $50 billion more of your money in the pot to keep record levels of government employees employed.  Might be a good time to let your congress person know that we need to sit out this hand.