Reading through this thread, I have seen a great many misconceptions about what Obama has done, about the state of our economy is, and what Obama can do about this mess. First, I would like to ackowledge that I know that Obama has LIMITED powers despite his role as our president (he can't control exchange rates, debt that effectively, etc.) However, he has not done enough. What is enough? Theres an inherent conflict of interest in being a president. There are two choices which may or may not correlate.
1.Please the people.
2.Do the right thing (may be painful short-term)
The latter statement is what America needs. Obama, however, seeks for show and not to do anything game-changing in our economy. Basically, he will kick the can down the road. If he were doing his best, bedget cuts are necessary. Major cuts.
Before we go into that, lets look at what Obama is proposing. His main ideas revolve around taxations for the rich, food stamps for the poor, gay rights, universal healthcare, and several other major themes. His belief is that the rich live too well while the poor suffer. The poor should pay for the rich right? Wrong. What he is doing is driving out talent while encouraging being lazy. If you live a good life doing nothing, why do something to pay for your neighbors who do nothing? Result is a failure. Good people leave, bad people come in. Even if good people did not leave, obviously, they will go to farther lengths to avoid taxes. History has shown that strict government policies often fail. Black markets for currencies form when goverments go for exchange-rate pegs. People immigrating from countries with poor demographic trends. General distrust in bad governments. What Obama is doing is cutting up the furniture to make a fire. OF course you have fuel, but how long will it last?
Gay rights, however, are good. I have nothing against them and they do not bother me. This universl health care, however, does bother me greatly. Of course a government health care system is good. After all it can care for those with no money and who are in dire need of health care. The funny thing is that his warps incentives. People, in general, will create inefficiencies in this "socialist" system. Government systems are badly managed, social security, China's SOEs, Russia's economy, and much more. People have an incentive for the business to do well as they make $$ while governments have little to no incentive to do well as doing well results in the same pay as not doing well. Besides, patients will choose more expensive medicines as the cost factor is taken out of equation. This is clearly a socialist system and a horrible one at that.
Now, I have been talking about socialism quite a bit. so, what is it? Socialism is the transition phase to communism. However, usually socialism and communism are used interchangeably. Communism focuses on the idea of 1 class. There is no "rivate property" and supposedly everyone would work for common good. In reality, work incentive is taken away and nobody works hard resulting in a stagnant economy.
Clearly, Obama may seem to have some nice goals, saving the poor, evening out society, these things cannot be done. Doing so will ruin the American Dream and doing so would cause people to loose belief in their government and for people to loose faith in their reward for their contribution to society.
Now, What can Obama do? Deflation is clearly not an option as deflation hurts the economy and freezes trade. Likely, inflation will be a common theme going foreward.
So, the stock market is a "manifestation" of our economy. right? No. Stock market prices are priced with variables. Simply imagin this.
y=ax
Y= price of stock market
a= investor/speculator expectations/mood
x= economic situation
Clearly, this is a crude idea of the situation but it is handy to understand. For those who doubt my reasoning, I have had 3 Years of market experience with REAL money. I have traded commodites, stocks, derivatives, and bonds. I have watched currencies. I do admit to not knowing everything, but who does? Back to the point, often prices don't follow fundamentals. Dot-com bubble anyone? 1929? Does the U.S. economy suddenly slow out 25% in 2 days? 1978? 2008? Clearly, the market has several otehr variables that we do nto know or see. AS a general rule, markets are capricious.
Ok, now to the problem about our debt. Our debt ATM is about 15 trillion dollars. Thats 15,000,000,000,000 dollars. We should be going thorough a period of deleveraging to reduce leverage. Spending more is horrible.
Clearly, OBama is an ok president. He seems to have little spine to deal with public problems and I dislike his ways of making the U.S. economy worse. He may have good intentions, but will these intentions be good for the United States? Thats up to you to decide.
-fiss
