- Last night I watched President Obama deliver the State of the Union Speech and probably the only good thing about the speech is that it was his last one
- It will probably go down in history as the most clueless State of the Union Address ever
- All he talked about was how great the economy is – how he created all these jobs
- He even had the chutzpah to take credit for reducing the budget deficit!
- President Obama will have doubled the national debt during his presidency
- He added more debt than every president from George Washington to George Bush, combined, yet he’s taking credit for reducing the deficit
- At least when George Bush gave his final State of the Union Address he acknowledged problems brewing in the economy
- He acknowledged concerns being addressed by the American people and validated them
- He talked about the stimulus plan he had, which I did not agree with, but at least he knew the economy was in some trouble
- Although he acknowledged that economic growth was slowing and that housing was down, he didn’t come close to preparing Americans for what was about to unfold by the middle of the year
- In fact, when the President delivered that State of the Union Address, the economy was already in recession, although the government had not acknowledged it yet
- He had no idea how precarious the state of the economy was, we were on the precipice of a big cliff and he was still optimistic, long term, but cautious given the slowdown in the economy and he wanted to come up with some kind of stimulus to mitigate the slowdown
- He did not foresee or warn about the severity of the problem, but at least he acknowledged some problem
- In contrast, rather than at least acknowledging weakness in the economy, President Obama claims victory over the Great Recession, that he restored economic health and vitality
- The few problems in the economy are beyond his control because the economy is changing
- What we do need is more government money for education, to train people for this new economy, we need a higher minimum wage, we need higher taxes on the rich, but other than that everything is great
- President Obama’s State of the Union Address is on the order of magnitude more clueless that George W. Bush’s last SOTU on the eve of the Great Recession
- We are now on the eve of a collapse even greater, yet President Obama is saying everything is awesome
- What President Obama did is to lecture the American people as to why they have nothing to be concerned about – basically saying that anyone who says that the economy is in decline is peddling fiction.
- Obviously the people who don’t recognize the decline in our economy are in denial, or have a political agenda
- What the President said is, “If you think the economy is headed in the wrong direction, if you think America is in decline, you’re wrong, it’s just that the economy is changing
- Remember, you voted for me and I promised change
- It’s changing because it’s getting worse, that’s the change
- President Obama points to technology as the problem in the economy – a transition that only makes you feel like you’re falling behind even though you’re not
- The technological revolution did not begin with the election of President Obama
- It has been no more transformative, even less so, than the industrial revolution
- Machines put a lot more people out of work than computers but we saw an expanding labor force, but women left the labor force, because their husbands started making more money
- Real wages were rising
- The industrial revolution took place in a free market economy
- The technological revolution is taking place in a government controlled economy
- The reason so many people are suffering is not because so many technology is changing
- What’s changing is the size of government
- We used to be a free market and now we’re not
- The reason for so much poverty and decline, and that the President is unwilling to admit, is that the government is responsible
- He now says that “a rising standard of living is within our reach”
- It used to be in our grasp. We had a rising standard of living for generations until the government screwed it up
- When the President was lecturing Americans about how great the economy is, but we just don’t know it…
- Yes we have created a lot of jobs – the problem is that we would have created much better jobs and far more of them, had we not had the Obama Administration
- One of the other things Obama does not mention is that a lot of the people who have jobs don’t want them, because they had to come out of retirement to survive
- A lot of the other jobs are part-time and low-paying jobs that people have to settle for
- We needed a lot of part time jobs to replace the full-time jobs that President Obama’s policies destroyed
- I’m thinking about all the people watching him listen to his speech – the average American whose wages have fallen; they used to own a house and now they are renting and the rent has gone up every year the President has been in office
- Maybe they had a full time job when Obama took office, but now they have to work two part-time jobs
- Or maybe it’s a college grad who has a big school loan debt and can’t get a job and is still living with his or her parents
- Think about the parents who are still supporting their kids, who may have debt, themselves
- The one thing they don’t have is savings
- People are living not just paycheck to paycheck but credit card to credit card
- Obama didn’t mention anything about the record number of people on food stamps, on disability, the collapse in the labor force, all these things happened during his Presidency, yet he does not accept responsibility for any problems
- His only unfinished business is to raise the minimum wage and increase taxes on the rich
- He also went after Wall Street for being reckless and causing the financial crisis, and they were, but it was the Fed and Congress, who were reckless with monetary policy allowed the condition in the first place
- Washington created monetary incentives, regulatory incentives, tax incentives and the environment that fostered Wall Street’s reckless activities
- A free market reigns in that kind of behavior. There’s a natural check and balance when people are motivated by the opposing forces of fear and greed
- When the government removes the fear with subsidies and bailouts and Greenspan puts or Bernanke puts, a moral hazard is created
- President Obama also claimed that the biggest threat to the planet is climate change
- First there’s little we can do about climate change, even if it is the threat the President thinks it is
- The climate has been changing for millions of years and I doubt that there is much we can do to influence Mother Nature
- The real threat to America is not coming from nature, it’s coming from government
- The socialist policies of Obama and his cronies are the real threat, and we can actually do something about that
- The President also talked about how the American economy is the “envy of the world”
- Maybe the world is jealous that we can borrow so much money and never seem to have to pay it back
- Or they may be jealous of the fact that we can consume so much and produce so little
- Most countries can not get away with running huge trade deficits year after year
- This will come to an end, and rather than being the envy of the world we may be the laughing stock of the world
- This economy is going to implode
- That’s why I said that this could go down in history as one of the most clueless State of the Union Addresses
- Obama has not fixed anything; he took what was broken and made it worse, with help from the Federal Reserve
- Obamacare took a health care system that was a disaster and made it much more of a disaster
- Look at the cost of insurance before Obama was elected and look at the cost now
- Not only the cost, but the quality; you pay more and you get less
- That’s his success?
- He claims student loans as a success – student loans have gone off the chart
- Is it a success that students have more debt than ever before, and at the same time have fewer employment opportunities?
- Obama explains away problems by saying that the economy is “changing”
- We are on the verge of a massive collapse because so many people around the world actually believe the Obama administration’s spin
- They actually think that the U.S. economy has been recovering
- Why don’t they listen to Alan Greenspan? He’s the one former Fed official who says we’re in a lot of trouble – he is not trying to sugar coat the situation, like Bernanke and Yellen are
- Obama, Bernanke and Yellen have a vested interest in saying everything is great, because this is their monetary policy, they own this “recovery”, which means they own this recession
- Alan Greenspan inflated the housing bubble and does not want to claim responsibility for the housing market crisis, but he is distancing himself from the next crisis that Ben Bernanke and Janet Yellen are causing, so he’s speaking more candidly
- Everybody is still hanging on to the idea that the economy is sound, despite the fact that there is now overwhelming evidence that that is not the case
- We see awful economic data everywhere but in the Non-Farm Payrolls. Those are lagging indicators and the there are so many adjustments and assumptions in there that this number is not as reliable as all the other indicators that are flashing, “recession, recession, recession”
- In addition to the economic indicators, the Russell 2000 is in a bear market, the transports are in a bear market, many stocks are in a bear market
- The major indexes, the NASDAQ and the S&P are in correction territory
- History shows that people will stay in denial for a long time. It takes overwhelming evidence to change people’s direction
- When the NASDAQ bubble burst in early 2000, people were in denial for a whole year. It wasn’t until 2001 that the Dow started to go down and we went into recession
- In 1998-99, I was saying that when the internet bubble burst we would have a recession because I realized how much economic activity was related to the wealth effect of the bubble
- Wall Street was oblivious to the NASDAQ bubble bursting; they were in denial because they had a vested interest in maintaining their bullish outlook – all of a sudden the markets collapsed and we went into recession
- The same denial happened with the real estate market – when the sub-prime bubble burst, several companies went bankrupt, yet some of the sub-prime debt retained their triple-A ratings
- Even after the collapse, none of the debt was downgraded, because Wall Street thought the problem ws contained within the sub-prime market
- This is happening once again – there is overwhelming evidence that the economy is sick, the market is sick, people are ignoring it, but before long, they will not be able to do it anymore, especially since it is an election year
- It would be a bad tactic for Democrats to deny what the voters are feeling
- The Republicans should tap in to the voters’ anxiety about the future – this is what Donald Trump is doing; he is not just popular with Republicans, he is also popular with a lot of Democrats
- The Republicans should tap into voter frustration. The Democrats admonish the electorate for not “feeling” the spin with a slap in the face, Patton-style, that is not going to be a winning strategy for the Democrats
- Democrats are going to have to come up with a stimulus plan between now and the election and the Fed is going to be on board
- She already admitted that if we are in a recession in 2016, the Fed will lower rates and re-start the asset purchase program because ‘it worked so well in the past”
- Even if we are back in recession by 2016, Janet Yellen is not going to admit that QE didn’t work
- That is what is going to yank the bottom out of the dollar, and then it will get worse for Americans because they will have to deal with a rising cost of living
- When the speculators who have been betting on this recovery have to reverse their bets at once all these low prices are going to become high prices and this economy will kick into a whole new gear of misery for the average American
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