The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Obamanomics: Still Not Working

Posted on | June 7, 2010 | 22 Comments

The Dow Jones Industrial Average lost another 115 points Monday, after losing 324 points on Friday, for a two-day loss of 439 points (4.3%) — and a cumulative loss of 1,389 points (12.4%) since April 26. In short, if your 401(k) is mainly in stocks, you’ve lost about 1/8th of that money in about six weeks. The net gain of the typical stock portfolio since November? A big, fat zero:

Stocks slumped Monday, with the Dow and S&P 500 ending at 7-month lows, after the euro hit a fresh four-year low, adding to worries about the global economy.
The Dow Jones industrial average (INDU) lost 115 points, or 1.2%, closing at the lowest point since Nov. 4.
The S&P 500 index (SPX) lost 14 points, or 1.4%, and closed at its lowest point since Nov. 4. . . .
“Last Friday’s jobs report inspired very little confidence in terms of the economic recovery,” said Erick Maronak, senior portfolio manager at Victory Capital Management. “Add to that the anxiety about Europe and investors are very skittish.” . . .
Worries that the United States could be in danger of falling into a so-called double-dip recession have plagued markets for the last month, sending the major stock indexes down more than 10% each.

Wait, did somebody say the magic words?

Neil McKinnon of VTB Capital said: “Eurozone debt and banking problems remain paramount.”
He said worries about a “double-dip” recession were rising. “Are we moving from a V to the downleg of the W?” he asked.

Let me remind you once more what I wrote on June 1:

“What investors must wonder is whether the past month’s declining trend on Wall Street is merely a short-term correction . . . or the onset of the second wave in a W-shaped (‘double dip’) recession.”

But this was predictable long much earlier, as I reported March 4:

The United States is currently suffering from “a capital-starved economy,” syndicated columnist Donald Lambro told George Washington University students Wednesday. “We’re in for a very long period of very high unemployment.”
Noting several forecasts of “anemic” economic growth in coming years, Lambro called President Obama’s deficit spending agenda “unsustainable.”
“Government stimulus programs have never worked and they’re not going to work now,” Lambro said . . .

And guess what? It’s going to get even worse next year:

On or about Jan. 1, 2011, federal, state and local tax rates are scheduled to rise quite sharply. President George W. Bush’s tax cuts expire on that date . . .
When we pass the tax boundary of Jan. 1, 2011, my best guess is that the train goes off the tracks and we get our worst nightmare of a severe “double dip” recession.

That’s from Art Laffer. Maybe you’ve heard of him. And maybe you’ve also heard of liberal idiots like Matthew Yglesias, who think that more Keynesian “stimulus” deficit spending is the answer. On Oct. 8, 2008, Yglesias was mocking some guy who told people to invest in gold. What if you’d ignored Yglesias and taken that other guy’s advice?

Gold rallied to within inches of its U.S.-dollar record and beat its all-time high in euros Monday as investors increasingly buy the metal as a hedge against financial deterioration in the euro-zone.
Most-actively traded gold, for August delivery, rose $23.10, or 1.9%, to settle at $1,240.80 an ounce on the Comex division of the New York Mercantile Exchange. That just missed the $1,243.10 record close for a most-active contract set in mid-May. Nearby futures had their largest one-day dollar and percentage gain since Feb. 16. . . .
“The global tensions are at a pinnacle,” said Mike Daly, gold specialist at PFGBest in Chicago. “People are saying, ‘We don’t have any confidence in these fiat currencies, and we need to move our money into tangible, safer assets.'”

Let’s just compare and contrast, shall we?

Who was that guy saying you should buy gold? Glenn Beck. Maybe you’ve heard of him.

Category: Barack Obama, Economics, Glenn Beck

Comments

22 Responses to “Obamanomics: Still Not Working”

  1. Brian O'Connor
    June 8th, 2010 @ 2:06 am

    I worry about the second dip. In the first dip, small businesses has a cushion if inventory and pre-ordered sales.

    If a second dip occurs, there will be no cushion. The second half of the W could cut much deeper and land much harder.

  2. Brian O'Connor
    June 8th, 2010 @ 2:06 am

    I worry about the second dip. In the first dip, small businesses has a cushion if inventory and pre-ordered sales.

    If a second dip occurs, there will be no cushion. The second half of the W could cut much deeper and land much harder.

  3. Brian O'Connor
    June 7th, 2010 @ 10:06 pm

    I worry about the second dip. In the first dip, small businesses has a cushion if inventory and pre-ordered sales.

    If a second dip occurs, there will be no cushion. The second half of the W could cut much deeper and land much harder.

  4. T.L. Davis
    June 8th, 2010 @ 2:47 am

    I am a small business owner and to be honest, if we have a double dip recession, I’m done for. Just sayin’.

  5. T.L. Davis
    June 8th, 2010 @ 2:47 am

    I am a small business owner and to be honest, if we have a double dip recession, I’m done for. Just sayin’.

  6. T.L. Davis
    June 7th, 2010 @ 10:47 pm

    I am a small business owner and to be honest, if we have a double dip recession, I’m done for. Just sayin’.

  7. Dave
    June 8th, 2010 @ 2:51 am

    Double dip recession? Doesn’t that imply that “recovery” was something other than smoke and mirrors?

  8. Dave
    June 8th, 2010 @ 2:51 am

    Double dip recession? Doesn’t that imply that “recovery” was something other than smoke and mirrors?

  9. Dave
    June 7th, 2010 @ 10:51 pm

    Double dip recession? Doesn’t that imply that “recovery” was something other than smoke and mirrors?

  10. Estragon
    June 8th, 2010 @ 4:11 am

    I don’t know how anyone expected short-term stimulus to solve long-term problems anyway, especially since some of the problems affecting our economic future are substantially beyond our control (particularly those of foreign origin). There was no “Plan” in the stimulus anyway, as even some Democratic-leaning economists now admit. It was a transfer of money to public employee unions and other Democratic constituencies like mortgage defaulters.

    So yes, we have much further down to go. Unfortunately, things will have to get bad enough to convince voters to abandon socialism as a concept – it’s a problem because once Republicans take control and begin the painful process of actually addressing the problems, the legacy media and the Democrats will try to shift the blame onto us. This isn’t going to quick, and it isn’t going to be pretty.

    Again, anyone contemplating buying gold must be aware that buying a commodity at its all-time high is the riskier investment possible. Remember the people who are touting gold now have in some cases been dispensing the same advice for over 30 years, and in most of those years equities and real estate have shown significantly greater returns. Even a stopped clock is right twice a day, and many of these people have a direct financial interest in talking up gold or gold stocks.

  11. Estragon
    June 8th, 2010 @ 12:11 am

    I don’t know how anyone expected short-term stimulus to solve long-term problems anyway, especially since some of the problems affecting our economic future are substantially beyond our control (particularly those of foreign origin). There was no “Plan” in the stimulus anyway, as even some Democratic-leaning economists now admit. It was a transfer of money to public employee unions and other Democratic constituencies like mortgage defaulters.

    So yes, we have much further down to go. Unfortunately, things will have to get bad enough to convince voters to abandon socialism as a concept – it’s a problem because once Republicans take control and begin the painful process of actually addressing the problems, the legacy media and the Democrats will try to shift the blame onto us. This isn’t going to quick, and it isn’t going to be pretty.

    Again, anyone contemplating buying gold must be aware that buying a commodity at its all-time high is the riskier investment possible. Remember the people who are touting gold now have in some cases been dispensing the same advice for over 30 years, and in most of those years equities and real estate have shown significantly greater returns. Even a stopped clock is right twice a day, and many of these people have a direct financial interest in talking up gold or gold stocks.

  12. Virginia Right! News Hound for 6/8/2010 | Virginia Right!
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  13. ak4mc
    June 8th, 2010 @ 1:03 pm

    I’m concerned the first “dip” of this so-called “double-dip” will prove to be more like a tiny dollop that fell off the scoop before the first dip was even deposited in the sundae.

    …and that ain’t hot fudge and nuts in the topping.

  14. ak4mc
    June 8th, 2010 @ 9:03 am

    I’m concerned the first “dip” of this so-called “double-dip” will prove to be more like a tiny dollop that fell off the scoop before the first dip was even deposited in the sundae.

    …and that ain’t hot fudge and nuts in the topping.

  15. Ron Jones
    June 8th, 2010 @ 3:58 pm

    You can complain about it all you want…

    But until you’re willing to give up your Social Security, your Medicare, your Medicare Part D, and your taxpayer funded public “education” system….

    You’re just whining for its own sake.

    “IT’S THE SPENDING…STUPID!”

  16. Ron Jones
    June 8th, 2010 @ 11:58 am

    You can complain about it all you want…

    But until you’re willing to give up your Social Security, your Medicare, your Medicare Part D, and your taxpayer funded public “education” system….

    You’re just whining for its own sake.

    “IT’S THE SPENDING…STUPID!”

  17. ak4mc
    June 8th, 2010 @ 4:07 pm

    But until you’re willing to give up your Social Security, your Medicare, your Medicare Part D, and your taxpayer funded public “education” system….

    So, what’s your point?

  18. ak4mc
    June 8th, 2010 @ 12:07 pm

    But until you’re willing to give up your Social Security, your Medicare, your Medicare Part D, and your taxpayer funded public “education” system….

    So, what’s your point?

  19. steve grant
    June 8th, 2010 @ 6:13 pm

    “obamanomics” is working….stimulus dollars kept the union base overly well compensated; when the crash happens, it will be easy enough to blame “capitalism”; and the press which rich rightwingers never bothered to propogate will revell at the wonder of he who is him for saving the world and the nation [soon to be called, “the nation formerly known as America”]from itself……all salute international socialism [or what ever name they wish to give it.]

  20. steve grant
    June 8th, 2010 @ 2:13 pm

    “obamanomics” is working….stimulus dollars kept the union base overly well compensated; when the crash happens, it will be easy enough to blame “capitalism”; and the press which rich rightwingers never bothered to propogate will revell at the wonder of he who is him for saving the world and the nation [soon to be called, “the nation formerly known as America”]from itself……all salute international socialism [or what ever name they wish to give it.]

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