Guest Post: Nero's Fiddle And Obama's Golfclubs

Submitted by Peter Tchir of TF Market Advisor

Nero's Fiddle And Obama's Golfclubs

I'm not sure what was going through Nero's mind at the time, but for posterity he is known as the leader who played a fiddle while the city he was responsible for crumbled all around him.  I have no clue what Obama's legacy will be, but his decision to remain on spring break with his family while the world is in crisis seems questionable.  Yes, I know its hard to cancel even a 'working' vacation with the kids, but in these turbulent times, we need more than pictures of him working in his 'mobile command centers'.  Maybe being awarded the Nobel Peace Prize based on some campaign promises has skewed his view of what he needs to do?  Maybe he defines success as the level of the S&P 500 so all is good in the world?  The reality is that the world is experiencing more problems than at any time in recent memory.

MENA alone deserves full and undivided attention.  We are now at war with Libya.  We have chosen to fight on behalf of the rebels - whoever they are.  We have issued a letter on behalf of Israel in response to the bombing in Jerusalem yesterday.  I'm not sure what group that is willing to bomb innocent people is going to be particularly intimidated by a letter, but guess someone felt that made sense.  Somehow we seem to be able to avoid Bahrain, no war, no letters, just a little wink-wink that its different there.  Yemen?  I think everyone is still trying to find it on a map and any reason we should care.  To me, it seems that we are reacting and are not proactive, and our policy is at best unclear across the region, and at worst hypocritical. 

Then there is our own economic situation.  In spite of QE2, tax cuts, etc., the data is starting to show signs that the spurt in growth is over.  Housing remains a mess.  Jobs aren't getting worse, but do not seem to be matching the expectations that were hyped late last year.  Inflation is starting to rear its ugly head.  If you believe CPI is an accurate reflection of what the average person spends money on, then we have no inflation.  If you believe the average person is having to spend more for less, then there is inflation.  If you believe company after company that is warning of margin pressure, then there is inflation.  CPI seriously misrepresents inflation.  It is accurate in what it calculates, but its basket of goods, does not reflect what we spend money on.  Housing is way too big of a portion, and basics are too little.  They also seem quick to give benefits to improvements in products (cars and tech) but slow on the other side (have you noticed restaurant portions getting much smaller).  The situation in Wisconsin seems relatively small, and at times almost comical, yet its real.  It might be the first of many attempts to cut back on expenditures.  That has to be done carefully as it will hurt the American consumer.  The demonstrations and rallies were peaceful and non violent, but my guess is they always start that way.  If what is going on in Wisconsin is reflective of the undercurrent of emotion in the country, the president needs to be addressing it.  This is the one thing he is supposed to be excellent at anyways!  There are rumors of an oil slick in the gulf.  Is it real?  Is it just silt?  In an era where we can know what Charlie Sheen had for breakfast before he knows what he's having, its hard to believe that 5 days later there is still very little information on this.  Is it because we just re-opened drilling in the gulf and he would look like an idiot or the puppet of the oil companies that we cannot get a quick, simple, definitive answer, to a pretty straightforward question.  In short, the domestic situation is as tricky as its been since last summer when double dip worries first flared up.  Where is he on these issues?  How long has the government been running with temporary extensions to the debt ceiling?  That doesn't seem to be a way to run the world's largest economy.  Even the optimists recognize that the debt burden is becoming worrisome and needs to be addressed.  More press conferences touting the good news, downplaying bad news, and finger pointing is just not enough.

Then we have Europe.  Its painfully clear that a number of countries borrowed too much and just cannot generate the income to repay that debt.  Various plans to hide the problems have only made them more intractable (Ireland is poster child for a bad plan to save the banks gone worse).  This is not the case of fearful investors being too scared to risk capital.  Maybe that was the case a year ago.  This is the result of diligent analysis and the realization that these countries are in unsustainable situations.  I'm not even sure what these bailouts are meant to accomplish anymore.  Who wants even wants the bailouts?   the citizens in Germany and France and America (via IMF) who are supplying the money? um, no. The citizens in the countries receiving them who will have to deal with austerity measures and where the vast majority would not be particularly harmed by default?  um, no. A few bankers and senior politicians who are too scared to let a corrective process take place?  um, now that sounds likely.  Its been like a black hole.  No country that enters bailout land has shown any ability to get out.  Countries (Iceland) that sucked it up and dealt with it are moving forward.  Where is the leadership from America on this?  Are we too scared of losses from defaults of the PIGS countries or are we scared to say too much about unsustainable debt because we don't want Germany and China giving us the 'takes one to know one' response? 

Japan is continuing to battle the aftermath of the earthquake and tsunami.  It seems clear that they are struggling with the nuclear reactors in Fukushima.  I'm not sure what we can be doing other than offering as much expertise and equipment as possible.  We should also be doing all we can to ensure accurate information is there for the public, both about the situation in Japan and the current state of nuclear affairs here.  In Japan, its either under control and getting better (in spite of irradiated water in Tokyo), or its already worse than Chernobyl, depending on who you listen to.  We run the risk of hurting our own nuclear plans by allowing fringe elements to overstate the risks.  To the extent that the situation in Japan is worse than is being presented by the media, we also risk a backlash from not being more up-front about the current status (and if the U.S. government can't get accurate information and disseminate it, who can?).         

So with real problems in Asia, the Middle East, Africa, Europe and domestically, our leader isn't in the capitol?  Hopefully the events play out well and he won't go down in history with Nero and his fiddle.  If nothing else, so far stocks are telling him he's doing a great job and the administration seems to view stocks as their key measure of success, so all is good, but I for one, am very concerned about this state of affairs.

Comments

[AldoHux_IV]

The problem is that anyone in position of power to make the necessary changes and policy is bought-- bought out by the very same imbalances that have left this global economy and structure in atrophy.  So until a real leader steps up-- it'll be like this and progressively get worse.

[snowball777]

Is anyone calling out our senate or house of reps for their lack of utility? Are there bills passed waiting to be signed? 

What, if anything, should Obama do about Europe? Or Japan? (that isn't being done already)

Are your complaints not merely a variation of, "Why can't Obama be more like Hugo Chavez" ?

Inquiring minds want to know.

[SilverFiend]

It should tell you something when people are posting on billboards Jimmy Carter thinking at least he is not the worst president ever anymore!

http://www.cbs19.tv/global/story.asp?s=12169820

[mkkby]

The US ended with Woodrow Wilson.  TPTB still put up a figure head every 4 years though.

[JR]

The “letter” Peter Tchir apparently refers to is the usual AIPAC support coming from Congressmen whom the Jewish lobbyists use from time to time to take public stands for Israel, in this case Reps. Steve Rothman (D-N.J.) and Steve Austria (R-Ohio) and Sens. Mark Kirk (R-Ill.) and Kirsten Gillibrand (D-N.Y.).  Israel wants them not only to vote right, but to stand up and make AIPAC's case.

From the sound of it, apparently Tchir agrees with the pro-Israel sentiments in the letters overlooking the fact that eight Palestinians in Gaza (including a grandfather and three teen-age boys) were killed by Israeli air strikes the day before, and even in face of the lack of evidence as to who detonated the Jerusalem bomb.

The politicians that AIPAC has purchased are constantly criticizing or praising Obama if he fails to do enough for Israel. Unlike Obama, they are 100 percent committed to Israel; they don’t have to answer to anybody – not even their constituents.

[jmc8888]

Glass-Steagall