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My Take on the 2012 Presidential Election
My Take on the 2012 Presidential Election. As I write this, I am sitting at the San Francisco consulate of the People’s Republic of China, awaiting the issuance of my business visa. Since I will soon be in the neighborhood, I plan to interview some companies that I want to buy on the next upswing in the global financial markets. The Defense Department has asked me to call on my senior contacts in the People’s Liberation Army to try and get a read on the Middle Kingdom’s next likely president, Xi Jinping. Also, it has been ages since I had a decent Peking Duck.
It seems that whenever you do anything with China, there are always scads of people around. I had to wait in line on cold and foggy Geary Street an hour just to get into the building, pestered by assorted anti-government demonstrators. I’m now inside with my laptop, but my number is A288, and so far they have only gotten up to A24. It looks like I have a long haul.
Therefore, I am going to take advantage of the very rare luxury of some extra free time and speculate at length on the prospects of another president, that of Barrack Hussein Obama. Having spent time in the White House Press Corp under Carter and Reagan, I have some inside knowledge about how whole election process works.
The most important factor to affect global financial markets next year and years beyond will be the outcome of the 2012 presidential election. As card carrying paid up members of the Mad Hedge Fund Trader network, I therefore have not only the responsibility, but the obligation to give you my forecast about how this is going to play out.
To believe that President Obama is anti-business and bad for the economy is lunacy of the highest order. Barack knows more American history than either you or I will ever forget. He is well aware that a poor economic performance has been the primary creator of one term presidents since WWII.
Kennedy was assassinated, Johnson retired early, Carter was demolished by the stagflation caused by the Iranian revolution and the second oil shock, and George H.W. Bush was turfed out by a minor recession, despite winning the first Gulf War. Therefore, the economy had to be Obama’s top priority from the first day in office. To do otherwise was for Obama to risk becoming one of the countless jobless himself.
I believe that the economy that Obama inherited was so broken that it will take decades to fix, if ever. It is easy to forget that virtually the entire financial system was bankrupt, the credit markets had seized up, and the ATM’s were two weeks away from failing to dispense cash. The government newly found itself a major investor in the country’s 20 largest banks, General Motors, and AIG.
But the reflationary measures he was able to get through a reluctant congress were too small to engineer the recovery he needed. The boldness of the moves seen during the Great Depression was sadly absent. Remember, Franklin Roosevelt directly hired 3 million men during his first two years through the Civilian Conservation Corps, immediately preventing 5 million from immediate starvation. This was when the population was less than half of what it is today.
To a large extent, Obama has become the fall guy for the excesses of earlier administrations. The big problems facing the country are long term and structural. The $15 trillion national debt is the product of 30 years of tax cuts and spending increases, primarily for defense.
Our runaway health care costs can be traced by our failure to nationalize health care when the rest of the developed did so in the late 1940’s, enabling them to keep their medical expenses to two thirds of ours, with better results. Fear of communism was the reason. That saddled corporate America with the costs, eating into our competitiveness.
Social security and Medicare were financially flawed from the day they were launched, and modern day politicians were loath to touch them once they became sacred cows. None of these intractable problems are amenable to a quick fix.
All of this leaves Obama’s popularity in the polls falling, going into one of the most acrimonious and hard fought elections in American history. Obama has become the Jackie Robinson of American politics, the first African-American to play in major league baseball. The better the job he does, the more people hate him. When the stock market doubled after he came into office, he received none of the credit. When the Tea Party the threat to default on Treasury bonds prompted a 25% plunge, he got all of the blame. Robinson died at 53, largely due to stress.
If he can’t pull out of his tailspin, I believe the president will withdraw his candidacy, and throw it open to other contenders. That is what Lyndon Johnson did in 1968 due to declining health and an unpopular war. When you try to push history forward too quickly, sometimes it bites you back. The election of Obama was such a generational leap in so many ways that some retracement was inevitable. Blame it all on the excesses of the previous administration, which were many. After all, the Democrats don’t want to commit suicide.
There are two potential candidates. I believe that Hillary Clinton was given the safe position as Secretary of State precisely to hold her in reserve as a backup candidate in 2012 in case something happened to Obama. People of both political parties agree that she has done a spectacular job managing America’s role in the Arab spring, providing military support to drive Khadafy out of power, and keeping the Chinese buying out gargantuan debt issues. But as a presidential candidate, she is not without baggage.
The dark horse in the race is Michael Bloomberg, the highly popular mayor of New York. If there was ever a politician who can change his spots quickly, it is Michael. A lifetime Democrat, he switched parties to win as a Republican in a Democratic town. He could flip flop again, or bolt to form a third party.
I have known Michael since he went door to door on Wall Street seeking funding to start his data business to replace the aging Quotrons. A more quixotic mission there never was.
Yet he succeeded wildly, making himself a billionaire many times over, proving his credentials as an entrepreneur and a businessman, and creating an urban legend. An early adopter, I have personally paid him over $1 million in fees for the past 20 years for his versatile machine, as have most other hedge fund managers.
Where do the Republicans stand in all of this? They have to spend a year appealing to the conservative base, attempting to outmaneuver each other in a marathon to the right. Then they only have two months to swerve back to the middle to win the election. They have a somewhat hopeless task, and is why we have so many two term presidents.
What Rick Perry harangues about is popular in libertarian, oil based Texas, but will they wear it in Ohio, Washington, or Florida? I think not. Mitt Romney’s Mormon origins leave his party’s Christian base cold, and he is unelectable without them. Both these men are presenting themselves as modern day incarnations of Ronald Reagan. But I knew Ronnie for decades, first as an aspiring governor of California, and a Reagan they are not. I can’t imagine Perry telling me an off color Irish joke, as Reagan did frequently, after the cameras stopped rolling.
The rest of the field are just “also rans”. On top of this, the power of the presidency as a campaign tool is not to be underestimated. Air Force One versus a chartered bus? Give me a break.
For those who wish to participate in Macro Millionaire, my highly innovative and successful trade mentoring program, please email John Thomas directly at madhedgefundtrader@yahoo.com . Please put “Macro Millionaire” in the subject line, as we are getting buried in emails.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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And Kenya wasn't a country when BHO was born, but I digress.....
Advancing the liberal anti-business agenda by passing 2000-page bills so complex it take years for people to notice how they've been screwed is what is hurting the economy. Continuing to defend the banks while they strip-mine the middle class isn't helping either.
"Liberal anti-business agenda"? You mean the corporations haven't been doing so well since 1980?
Yeah, Marx and Engels are rolling in their graves, somehow the US has invented and perfected "Corporate Communism"
Who the hell cares. Our political system is in the control of Corporate America.
We the People does NOT apply any more. We gave up our Freedom 10 years ago.
The U.S. is now a communist state. Communist meaning not owned by the people.
You have been so hoodwinked by the Corporate spindoctors and assorted neo-con talking heads you don't even know what socialism or communism is or even how to recognize it. I'll give you a hint, a radical Marxist would have lined all the bankers up against a wall and had them shot in 2008. A socialist would have nationalized the banks, fired the all the senior management and then after a few years spun the banks back off back to the private sector. (The 280 billion in bonuses would have been used to recapitlize the banks.)
Fascism sorta sounds nice at first, somebody says they are going to make the trains run on time, then what happens the trains run on time but have stops in Auschwitz or Treblinka.
Not to get technical, but National Socialism
http://en.wikipedia.org/wiki/Nazism
As usual, a bunch of f-in propaganda garbage from MHFT. Obama knows history? LOL! FDR saved the world with his policies? LOL! Obama had to deal with a reluctant Congress (forgetting that for 2 years he had both houses and could have passed *any* legislation he wanted.) LOL!!!!
I want the 5 minutes back that it took me to read this horseshit.
Hey madhedgefundtrader,
Krugman called. He wants his job tossing Obama's salad back.
It is impossible to believe there exist suckers who will actually pay this guy for investment advice.
OTOH it is entertaining--in a sick way--to read his lunacy.
quit your job and apply for food stamps
<<Barack knows more American history than either you or I will ever forget.>>
Yes, like the historical fact that there are over 57 states in the US. I guess he does know some history that I missed.
BTW, did you actually have a decent Peking Duck with Ronald Reagan?
He must have meant Nixon.
We can't be sure. Let's ask Obama.
I'm confused, is this MHFT or Paul Krugman? Stick him in the corner Old School with the Dunce Cap!
Either way Tyler, Please revoke this simpleton's ability to contribute.