Obama is Bluffing; Outcome Unpredictable

Let’s look at the cards Obama holds or has been dealt in the last months:

• A big loss at the polls in the midterm election

• A really bad and persistent level of un and underemployment

• Record levels of deficits, much of which has been promoted as stimulus programs to get the economy going. They have failed completely

• Record levels of debt added to an already overwhelming burden on the economy

• A housing correction he inherited that has worsened on his watch

• An Illinois/Chicago politicians tin ear/eye to recognizing the destruction of American business’ competitiveness because of his legislation and programs

• We really need to repeat the previous point. It is incalculable to measure the damage that Obama is doing to America because of his Illinois/Chicago training

• He is now threatening; scaring grandma and feigns self assurance (more Chicago tactics)

• Many states are moving aggressively to balance their budgets and promote wealth creation/ jobs growth. None of this behavior is evident in Washington DC

• External disciplines are building in the form of rating agencies; bond market vigilantes; foreign debt buyers and a large portion of American voters/taxpayers

All Obama has on his side is a sycophantic media: PBS, NPR, NBC, CBS and ABC. This media gang will not face the reality of the above situation. They will not question the man they voted for. But many Americans are carefully watching the destruction of his presidency and are quite prepared to take away the senate and the presidency from his party next year.

Obama is trying to bluff the republicans with this hand. If he succeeds he will be a one term president with a Hoover style legacy. He knows that.

He knows that he needs a drastic sacrifice and frugality program. He just doesn’t have the training or the cojones to lead the process. He knows it deep in his soul (some question this statement and say he follows his ideology.) But he thinks the republicans will blink. They well might; too many of them have spent way too much time in Washington and too little time in America. He watched Richard Daley in Chicago give in to unions; fold on any discipline with the police and teachers; sell off city assets for a fraction of their value to balance the books; let the debt and off the books liabilities build and build and build and still claim preeminence. This is Obama’s thinking; his training. Avoid serious problems; kick the can down the road; never face and correct real systemic problems; stay above the fray. He believes that this approach will work for our country or, at least, for him. He doesn’t realize that our foreign competitors see these weaknesses clearly and bear no resemblance to the weak competition of the Illinois opposition party. Foreign competitors develop strategies to win commercially; win economically; and win in the long term. They build wealth creating economies; America builds its mythology. Obama does not grasp any of what we have just written/said!!!

The republican “leaders” are politicians. They are not leaders. It is a big problem when the opposition thinks and acts like politicians. They vacillate; the hold meetings; they react; they point fingers; they blame the other side. They cannot form a corrective strategy and stick with it. This is the behavior of the politician; not of a leader.

America has chosen a path of spending, borrowing and currency devaluation to implement a political entitlement agenda. It has prioritized a societal, cultural, environmental and political agenda and placed it well ahead of wealth creation, economic growth and good jobs for its citizens. It packages this agenda in mythology and outright deceptions. It pretends it is something it is not. This process is self destructive.

We are on a certain road to failure. TheFundamentals characterizes this road as deficits = debt = destruction. We have also used these pages for years now to describe and analyze the problem and offer sensible and doable solutions. There is no solution besides sacrifice and frugality.

It appears that we cannot grasp the severity of the problem and, therefore, are either unable or unwilling to implement the sensible and doable solutions. If such is the case, we are better off accelerating the financial crisis which will impose its own solutions. The sooner; the better. Obama clearly is the right person to get us there sooner.