Guest Post: Obama Will Lose In 2012

Tyler Durden's picture

Submitted by Charles Hugh Smith from Of Two Minds

Obama Will Lose in 2012

Predicting that Obama will be a one-term president is easy: Americans vote their pocketbooks.

There is nothing remotely ideological or personal in my prediction that President Obama will lose the 2012 election. Both parties are equally out of touch with reality in my view, and both suppport the same things: a global Empire, an increasingly intrusive Savior State, a shadow banking system which is no longer under the control of State institutions (rather, the banks control the institutions), and various crony-capitalist cartels which fund political campaigns and partner with the Central State's bloated, unaccountable fiefdoms. The only visible difference between the two parties is slight variations in the relative growth rates of the most-favored cartels and fiefdoms.

President Obama seems like a nice guy. Many people said the same thing about George W. Bush. While a likeable personality is a plus in a media-obsessed society, American elections boil down to this: Americans vote their pocketbook, and their pocketbooks will be a lot lighter by November 2012.

President Obama has several key flaws which have doomed his presidency.

1. His leadership style is one of consensus and compromise. This works OK in a caretaker setting in which there are no crises and no demands for bold changes of course. Unfortunately, this era is defined by structural crises, and a leadership based on gaining consensus and compromise is basically a rudderless one in this environment.

2. He does not understand economics or finance, nor is he secure about making decisions on financial topics. As a result he deferred to the "experts," who just happened to be Wall Street cronies and insiders who easily swayed the President with their hobgoblin stories of financial meltdown and ruin if we didn't "save the banking sector from losses."

3. His grasp of history is poor. The same can be said of most presidents, but Obama failed to grasp the historic opportunity to set a new sustainable course for the nation's banking and financial sectors, and thus for its economy. He opted instead to save and protect the corrupt and embezzlement-based banking sector from losses, and he continues to do so with "extend and pretend" policies.

In a similar fashion, he has allowed the National Security State and the Global Empire to expand without any limitations.

4. He has no visible core beliefs beyond a vague sense that the Federal government and its extension, the American Empire, are forces for good. His policies can be boiled down to: support and expand the Savior State and its many fiefdoms, support and expand the Global Empire and National Security State, and allow the banking system and its Power Elites to set the agenda and control the oversight agencies and institutions.

His signature accomplishment, the "Obama-care reform" of the nation's sickcare system, simply extends the power of existing cartels and fiefdoms and delivers an ever-larger slice of the national income to their coffers. In its basic parameters, the "reform" could easily have been supported and passed by socially liberal Republican presidents such as Richard Nixon. There is nothing remotely progressive or radical about "pooling" insurance cartels and wet-paper-bag bureaucratic tests of "the most effective treatments."

These are simply technocratic layers added to a bloated, corrupt, venal and destructive system that already costs twice as much as those of our advanced-economy competitors.

In addition to these flaws, he has made fatal policy errors which doom the economy to implosion by November 2012.
All of his administration's policies can be distilled down to these three points:

1. The banking sector is the most important foundation of the economy. The Central State and its proxy, the Federal Reserve, pumped some $14 trillion (by some measures, $23 trillion) in cash, credit, guarantees and backstops into the banking sector and its cloaked twin, the Shadow banking System.

Meanwhile, little to nothing was done for the cash-strapped consumer or citizenry. Why?

2. The "problem" is lack of credit and "confidence." If the State and Fed flood the banking system with credit and "restore confidence" by goosing the stock market, then people will start borrowing and spending again, and everything will be "fixed."

This presumes demand is strong, and all that's needed is credit for people to satisfy their thirst for more goods and services.

Meanwhile, back in reality, people realized they didn't need a third car, fourth TV, 17th "cute blouse," 23rd pair of shoes, etc., and now that their home is worth less than their mortgage (or their remaining equity is minimal), they can't really afford the luxury travel, boats, etc. they enjoyed when they thought their house would keep rising in value forever and tapping that rising equity was painless.

Demand is slack because everyone who could afford more crap already owns more crap than they need or even want.
The percentage of the populace who would like more stuff cannot afford more stuff. Their household incomes and wages are declining, and their expenses for essentials are rising.

The Fed's largesse to banks (free money in unlimited quantities) doesn't reach them; all it does is boost assets held by the top 10%.

3. Boosting the assets of this top 10% (or 20% if you include those who have equity of some sort beyond the $2,500 in their IRA) will cause a "wealth effect" that will "trickle down" to the lower 80% as the top 20% buy more Coach handbags, enjoy fine dining at tony upscale restaurants, etc.

Unfortunately, this may help boost Coach's profit margins, but the vast majority of the "trickle-down" consists of low-paying retail clerks and busboys.

In other words, the "wealth effect" is bogus, a charade deployed to defend the pillaging of the economy via financialization and Fed intervention.

4. Pushing the dollar lower in a "beggar thy neighbor" currency war is the best way to boost the U.S. economy. Apparently no one in the President's team looked at financial history to identify the nations which grew rich and powerful by debasing their currency.

In a perverse blowback to this misguided policy, corporate profits earned overseas were certainly goosed, but so were import prices, one of the reasons (along with the Fed's easy-money quantitative easing) for rising costs to consumers.

If you set out to design a policy that impoverished 80% of the citizenry and channeled a larger share of the national income to the top 10%, then this is precisely the set of policies you would pursue.

Nothing important has been fixed; nothing important has even been addressed. The institutions of governance are captured and corraled by the monied Elites to the point that the government has lost control of its own institutions, which now rule as quasi-independent fiefdoms. The citizenry, bought off on the cheap by stale Bread (rapacious student loans, food stamps which offer the veneer of normalcy, extended unemployment benefits so no angry mobs form, etc.) and dazed and distracted by the Media Circus, keep quiet in their complicity, while the Power Elites revel in the freedoms offered by a caretaker Administration.

If President Obama had fought for fundamental structural reforms and lost, he would still have support. Yes, Congress holds the pursestrings, but let's not forget the President appoints his own staff and advisors, and wields great power via Executive Orders. He could have submitted a 5-page Financial Reform Bill and promised to veto anything else. If the Power Elites watered it down, then he could have vetoed it and gone directly to the public. But he did none of these things.

Courtesy of correspondent George B., here is a chart of public and private debt over the past decade, from the St. Louis Federal Reserve. Notice that all the Administration and Congress have done is boost Federal debt to replace the "missing" private debt (missing because incomes are declining, housing equity has crashed and the consumer overborrowed for a decade).


This is mindless Keynesian policy on auto-pilot. As I have reported before, the Federal Government is borrowing and spending some $6 trillion in a mere four years, almost doubling the nation's debt, and all that's been accomplished is the Power Elites' share of the national income has risen and GDP has flatlined.

The structural dislocations and imbalances remain firmly in place; a financial sector dependent on fraud has been "saved," and an economy sick with an addiction to rampant financialization has been given plenty of smack to keep it from going through a desperately needed withdrawal.

The Keynesians have no answer as to when the economy will "recover" without the Central State borrowing 11% of GDP every year to prop up its various cartels and fiefdoms. They have no answer because they have no understanding of the imbalances, the fraud, the financialization or of the feudal partnership of the State and crony-capitalist cartels.

Obama has lost his "progressive" base, because he's done nothing remotely progressive. He has lost the middle because his Administration has overseen their gradual impoverishment at the hands of Financial Power Elites. He has offered them phony facsimiles of reform slicked down with the tiresome "soaring rhetoric" of a con artist so besotted with his own story that he actually believes the BS himself.

He can count on the public-union vote and a few of the State fiefdoms he's enriched and enlarged at the expense of the common good, but as the addict (the economy) goes downhill, slowly destroyed by the ever-larger doses of smack administered by the Fed and the Central State, then the consent of the governed will be irrevocably lost--not just by President Obama, but by the entire Status Quo.

The President is now a candidate hoping to scoop up a cool $1 billion to blow on another long, greasy media blitz, but I would be surprised if he rakes in much from the commoners and serfs straining to keep the wheels of their household finances turning. He will of course collect big bucks from various crony-cartels and contractors who have benefited from his bogus "reforms" and unstinting support of the banking sector, but his true-believer supporters will be thinned down to a few Elites, die-hard Democratic hacks and the delusional by mid-2012.

His opponents may fare little better unless they are willing to tackle the dominance of crony cartels, government fiefdoms and Financial Power Elites whose fat fingers remain firmly on the throat of the fast-expiring nation.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
ZeroPower's picture

I sure hope so. 

Itd be quite funny for his opposing party to use the 'Change' slogan all over again. Quite fitting.

dogismyth's picture

they'll all be in the lifeboats before 2013, nor could they care who gets the reins.  Obama was just a droid inserted to get the final dirty work done.  We would never do anything capricious to the first black man president for putting the final touches on the Titanic.  But still a public hanging has more appeal than the guillotine.

hedgeless_horseman's picture

America Will Lose (again) In 2012

Why?

Campaign Contributions Are Bribery.

Bribery Is Illegal.

Campaign Contributions Are Not Illegal.

dogismyth's picture

is it illegal when everyone participates?  Like everyone running a stop sign...the only ONE to get nailed is the one that was at the right place but at the wrong time

66Sexy's picture

More bearish speculation of an inevitable drop in the markets.

The Obama admin and the federal reserve are in perfect harmony now. Why change it? As long as there is cooperation, QE or some other stealth program will contiune to insure the illusion of prosperity is preserved. If people vote their pocketbooks, then they wont want to risk change.

He is right that people vote their pocketbooks: therefore Obama WINS in 2012, because even the tea party will be compromised, because an obama reelection means silver and gold will continue to climb.

Obama will pull votes from the PM toting tea party and libertarian alt media aspects, because they own gold and silver.  

NidStyles's picture

You're out of you fucking mind, and just as out of touch as Odrama.

TBT or not TBT's picture

Obama's idea is to crash America, to tear it down, to "fundamentally transform The United States of America."   Operative word:  fundamentally.   He's let Congress off the leash and set the central government against the very idea behind this country, limited government, government permanantly held in check by checks and balances, rule of law rather than rule of men.   To get in touch with Obama, read the masterpiece of the genre is D'Sousa's The Roots of Obama's Rage.   He has a giant chip on his shoulder against the western world in its entirety.   His cabinet and most of his actions reflect that entirely.    Letting Congress get away with cutting a mere 1% of the budget, projecting gigantic deficits for a decade, when the Treserve is already borrowprinting about half of expenditures, isn't just Kabuki.   The real story here is of the order of George Soros's dreams, of Reverend Wright's dreams, of Alinsky's dreams and most importantly of Obama's Dreams From My Father. 

Chump's picture

Why did you jump to the top and randomly insert this incoherent tripe?  Even scrolling right past this comment is going to make everyone just a little bit dumber.

Sudden Debt's picture

and the wrong place to be in will be the US...

 

thefatasswilly's picture

Two pages of posts, and not one mention of general betray us.

ZH commentary has gone down the shitter.

MilleniumJane's picture

Ok, I'll bite.  Please elaborate.

Chump's picture

General Petraeus, sworn to uphold and defend the Constitution from all enemies foreign and domestic, took time out of his busy schedule to criticize a Florida pastor's decision to burn Korans.  Said it endangered our troops, contributed to terrorist recruitment, and just generally caused lots of hurt feelings and psychological boo boos.  He took his bully pulpit and used it to spit on America and grovel at the feet of people who hate us.

TBT or not TBT's picture

So much for the 1st amendment.

SteveNYC's picture

Fatal flaw in the main post:

"If you set out to design a policy that impoverished 80% of the citizenry and channeled a larger share of the national income to the top 10%, then this is precisely the set of policies you would pursue."

Which is exactly why Obama will be re-elected in 2012, because the bottom 80% don't equate to shit when it comes to choosing "leaders". Besides, like the Republican option will be any better! Ha! America loses, that's all. Simple done and dusted.

Michael's picture

The only people who seem to have a clue about who actually runs or rather, ruins our country are the Internet surfers and we are a growing legion. It has become blatantly obvious the TV talking heads work in concert with the international banking cartel and are merely their employees. I just thank God the USA is virtually bankrupt so the children of those who aided in bringing about the collapse of the US will suffer greatly in the destruction of our country.

Ident 7777 economy's picture

"I hope he fails."

Did you agree with that statement uttered in 2009?

TBT or not TBT's picture

Of course we hope Obama fails to enact his vision of America.    It would be a vicious tyranny.

calltoaccount's picture

"The 10 major banks, which control 60 percent of the economy, determine how our legislative bills are written, how our courts rule, how we frame our public debates on the airwaves, who is elected to office and how we are governed. ...They engaged in massive fraud and deception that wiped out an estimated $40 trillion in global wealth. The banks are the ones that should be made to pay for the financial collapse. Not us."

Published on Truthout (http://www.truth-out.org)    There is no way to vote against the interests of Goldman Sachs.  Civil Disobedience is the only tool we have left. by: Chris Hedges, Truthdig, Op-Ed [3]
The phrase consent of the governed has been turned into a cruel joke. There is no way to vote against the interests of Goldman Sachs. Civil Disobedience is the only tool we have left.

We will not halt the laying off of teachers and other public employees, the slashing of unemployment benefits, the closing of public libraries, the reduction of student loans, the foreclosures, the gutting of public education and early childhood programs or the dismantling of basic social services such as heating assistance for the elderly until we start to carry out sustained acts of civil disobedience against the financial institutions responsible for our debacle.

 The banks and Wall Street, which have erected the corporate state to serve their interests at our expense, caused the financial crisis. The bankers and their lobbyists crafted tax havens that account for up to $1 trillion in tax revenue lost every decade. They rewrote tax laws so the nation’s most profitable corporations, including Bank of America, could avoid paying any federal taxes. They engaged in massive fraud and deception that wiped out an estimated $40 trillion in global wealth. The banks are the ones that should be made to pay for the financial collapse. Not us. And for this reason at 11 a.m. April 15 I will join protesters in Union Square in New York City in front of the Bank of America.

“The political process no longer works,” Kevin Zeese, the director of Prosperity Agenda and one of the organizers of the April 15 event, told me. “The economy is controlled by a handful of economic elites. The necessities of most Americans are no longer being met. The only way to change this is to shift the power to a culture of resistance. This will be the first in a series of events we will organize to help give people control of their economic and political life.”

If you are among the one in six workers in this country who does not have a job, if you are among the some 6 million people who have lost their homes to repossessions, if you are among the many hundreds of thousands of people who went bankrupt last year because they could not pay their medical bills or if you have simply had enough of the current kleptocracy, join us in Union Square Park for the “Sounds of Resistance Concert,” which will feature political hip-hop/rock powerhouse Junkyard Empire with Broadcast Live and Sketch the Cataclysm. The organizers have set up a website [5], and there’s more information on their Facebook page [6].

We will picket the Union Square branch of Bank of America, one of the major financial institutions responsible for the theft of roughly $17 trillion in wages, savings and retirement benefits taken from ordinary citizens. We will build a miniature cardboard community that will include what we should have—good public libraries, free health clinics, banks that have been converted into credit unions, free and well-funded public schools and public universities, and shuttered recruiting centers (young men and women should not have to go to Iraq and Afghanistan as soldiers or Marines to find a job with health care). We will call for an end to all foreclosures and bank repossessions, a breaking up of the huge banking monopolies, a fair system of taxation and a government that is accountable to the people.

The 10 major banks, which control 60 percent of the economy, determine how our legislative bills are written, how our courts rule, how we frame our public debates on the airwaves, who is elected to office and how we are governed. The phrase consent of the governed has been turned by our two major political parties into a cruel joke. There is no way to vote against the interests of Goldman Sachs. And the faster these banks and huge corporations are broken up and regulated the sooner we will become free.

Bank of America is one of the worst. It did not pay any federal taxes last year or the year before. It is currently one of the most aggressive banks in seizing homes, at times using private security teams that carry out brutal home invasions to toss families into the street. The bank refuses to lend small business people and consumers the billions in government money it was handed. It has returned with a vengeance to the flagrant criminal activity and speculation that created the meltdown, behavior made possible because the government refuses to institute effective sanctions or control from regulators, legislators or the courts. Bank of America, like most of the banks that peddled garbage to small shareholders, routinely hid its massive losses through a creative accounting device it called “repurchase agreements.” It used these “repos” during the financial collapse to temporarily erase losses from the books by transferring toxic debt to dummy firms before public filings had to be made. It is called fraud. And Bank of America is very good at it.

US Uncut, which will be involved in the April 15 demonstration in New York, carried out 50 protests outside Bank of America branches and offices on Feb. 26. UK Uncut, a British version of the group, produced this video guide to launching a “bail-in” in your neighborhood.

 

Civil disobedience, such as that described in the bail-in video or the upcoming protest in Union Square, is the only tool we have left. A fourth of the country’s largest corporations—including General Electric, ExxonMobil and Bank of America—paid no federal income taxes in 2010. But at the same time these corporations operate as if they have a divine right to hundreds of billions in taxpayer subsidies. Bank of America was handed $45 billion—that is billion with a B—in federal bailout funds. Bank of America takes this money—money you and I paid in taxes—and hides it along with its profits in some 115 offshore accounts to avoid paying taxes. One assumes the bank’s legions of accountants are busy making sure the corporation will not pay federal taxes again this year. Imagine if you or I tried that.

“If Bank of America paid their fair share of taxes, planned cuts of $1.7 billion in early childhood education, including Head Start & Title 1, would not be needed,” Zeese pointed out. “Bank of America avoids paying taxes by using subsidiaries in offshore tax havens. To eliminate their taxes, they reinvest proceeds overseas, instead of bringing the dollars home, thereby undermining the U.S. economy and avoiding federal taxes. Big Finance, like Bank of America, contributes to record deficits that are resulting in massive cuts to basic services in federal and state governments.”

The big banks and corporations are parasites. They greedily devour the entrails of the nation in a quest for profit, thrusting us all into serfdom and polluting and poisoning the ecosystem that sustains the human species. They have gobbled up more than a trillion dollars from the Department of Treasury and the Federal Reserve and created tiny enclaves of wealth and privilege where corporate managers replicate the decadence of the Forbidden City and Versailles. Those outside the gates, however, struggle to find work and watch helplessly as food and commodity prices rocket upward. The owners of one out of seven houses are now behind on their mortgage payments. In 2010 there were 3.8 million foreclosure filings and bank repossessions topped 2.8 million, a 2 percent increase over 2009 and a 23 percent increase over 2008. This record looks set to be broken in 2011. And no one in the Congress, the Obama White House, the courts or the press, all beholden to corporate money, will step in to stop or denounce the assault on families. Our ruling elite, including Barack Obama, are courtiers, shameless hedonists of power, who kneel before Wall Street and daily sell us out. The top corporate plutocrats are pulling down $900,000 an hour while one in four children depends on food stamps to eat.

We don’t need leaders. We don’t need directives from above. We don’t need formal organizations. We don’t need to waste our time appealing to the Democratic Party or writing letters to the editor. We don’t need more diatribes on the Internet. We need to physically get into the public square and create a mass movement. We need you and a few of your neighbors to begin it. We need you to walk down to your Bank of America branch and protest. We need you to come to Union Square. And once you do that you begin to create a force these elites always desperately try to snuff out—resistance.

 

Bob's picture

Jeez, aren't those guys liberals though?

Misstrial's picture

calltoaccount, sorry you were junked. Good post and if I was in SF that day, I'd join you.

~Misstrial

 

Ident 7777 economy's picture

Published on Truthout

- - - - - - - - - - - - - - - - - - -

Same guys who did the cigarette stunt awhile back?

DrunkenMonkey's picture

Amen to that bro, if I could be in Joo York then I would be

DosZap's picture

OT,

May be the same thing that is killing the Pine Forests..........

The Four Horsemen damn sure appear to be riding.

http://www.secondopinionnewsletter.com/scripts/previewArchive.aspx?AID=651

Azannoth's picture

Obama will not loose if they put the appropriate counter-canditate or maybe Sarah Palin or sum1 else will run a 3rd party

I think the elites want to milk the 'Obama' till it's dry

Mr. Anonymous's picture

Agree.  He is the Powers That Be's go to guy, a docile, compliant creature happy to sleep in his master's wet spot.

FullFaithAndCretin's picture

loose. canditate. sum1 3rd party.

You fucking cretin

Votewithabullet's picture

Way to stay on top of those typos cretin, I mean Kunt.

Bob's picture

Only a guy who looks black could have ever pulled it off . . . even with the soaring oratory. 

AGuy's picture

I Agree, especially if Obama runs on a Pro-Entitlements and the Republicans continue down the big entitlement cuts policy. There are 78 to 84 Million retired Americans which makes up the biggest voting block. I doubt any retiree would vote for the candidate that for big entitlement.

 

 

johnQpublic's picture

obama will be president again in 2012

 

why you ask?

easy....electronic voting machines will vote for you in exactly the way they are programmed to....once again the margin will be essentially statistical noise....but the "O" will win by that slim margin

it doesnt matter that he is a useless pawn

thats already 'priced in' as y'all like to say

disabledvet's picture

I care Mr. Bush because there are soldiers in the field and they were the most qualified and capable people I ever knew, that is still true today and they happen to have the highest suicide rate in our history.  To say how this makes me feel would land me in jail of course--and "the fact that it is additive now" due to Libya only adds fuel to the fire of my particular variant of "i have a phucking dream, too."  Now would someone please explain "what the phucking agenda was" and "to the extent there ever was one it's not now completely destroyed."

hedgeless_horseman's picture

Here is the deal, sir, as far as I understand.  Our country's military was used for defense, but is now used for offense, as in to secure (steal) other people's natural resources (oil).  Some moral and intelligent soldiers and sailors eventually figure this out, and they end up committing suicide. 

Sad but true.

MSimon's picture

So who got the Iraqi oil? And how do you explain our problems with Islam since 1794?

pvzh's picture

Some moral and intelligent soldiers and sailors eventually figure this out, and they end up committing suicide.

If they are moral and intelligent, suicide should not be their answer.

krispkritter's picture

Right. After being ass-raped for decades(generations?) by the best Government money can buy, the stigma is kinda gone and the pain is a dull noise in the background. I'm not waiting for the deck chairs to move or for the band to ask for my vote on requests, getting it done myself and flying as low under the radar as possible.

jus_lite_reading's picture

"Change, Your Diaper." There won;t be a 2012 election the way thigs are going!!!!

mdwagner's picture

I hope for change!  In my pocket!  Pre-1964 dimes and nickels of course.

Tom Servo's picture

I'm on board with the "there will be no 2012 election" proposal... we're long overdue for a false flag (or not, see: Fukushima) attack on the country which will allow PD 51 to be enabled ensuring that Obama is "P.F.L."  President For Life. 

I feel the PTB are starting to run out of time to get their agenda passed and everything Barry has done points to us being embroiled in a massive war, or clamping down hard on the serfs with a brutal police state.  People are awakening to the criminality of the fed, war fires are being stoked all over the world.  Dont ax dont tell was repealed to institute the draft and provide a jobs program. 

 

I hope i'm wrong.... God help us all.

 

 

MSimon's picture

The Min. be makin some good money with his GAME.

And the "Brother Malcom" schtick? Pretty good for a guy who was probably involved in his demise.

sgt_doom's picture

The logic is unassailable -- but the end conclusion is most probably wrong.

Obama is Wall Street's man, their usual lackey in the Oval Office.  They ran Dole to give Clinton, their other guy, a second term.

They'll probably run Bachmann, Palin, or that Mittsy dood, to give Barry a second term.

And he does understand:  he is focused on that future Goldman Sachs' partnership, or -- like the entire Clinton family -- working on behalf of the jobs offshoring industry to make a fortune, although there really aren't all that many American jobs remaining to be offshored.

FreakuentFlyer's picture

"change" is too small for any of these guys!