Yes I know it's a Monday and I try not to get all heavy and political on Mondays, but this is a special circumstance that compels me to break out of my self-imposed moratorium. Today, the Dow fell 634.76 pts, and is down 1,086.59 pts since last Thursday. The rapid fall of the Dow is a direct result of China's credit downgrade of the US on Thursday and Monday morning reaction to the S&P's downgrade on Friday afternoon. You didn't need to be Warren Buffet to see that a downgrade of America's credit rating was going to be toxic for the market, I called it confidently Friday afternoon when I first heard about the S&P decision, just as I knew China's downgrade on Thursday would affect trading that Friday. I might know a couple things about the market and economics and whatnot, but I'm no Harvard PhD, I'm no high-powered economist or anything. Hell, I can't even get a job as a cashier in my town, but that's because the "job creators" must be busy creating all those jobs somewhere else... that "somewhere else" being India or Mexico I suppose. At any rate, I'm just a guy with enough intelligence to know a few things and enough wisdom to know I don't know everything and I have called this descent into double-dip recession almost from the start of the debt ceiling debacle. I've been calling it a "manufactured fiscal crisis" or some variation of that label from the get-go. I've been saying it's all part of the Republican agenda to get Obama out in 2012 by any means necessary, even if it means sending us back into recession, even if it means pushing us into a depression, even if it means trampling the middle class into the dirt, as long as they can make more people think it's Obama's fault than it is the GOP's, they win.
The argument that I have heard from a number of my conservative friends is "If the Republicans only care about rich people, then why would they intentionally tank the market and lose all that wealth? Why would they intentionally sabotage all of their rich special interests by wrecking the market on purpose?"
The answer is found in the aftermath of the 2008 collapse.
Before this recent descent towards double-dip recession, it was widely reported that the incomes of the wealthiest Americans had surpassed pre-recession levels. In short, the richest people in the country were making even more than they did before the bubble burst and we free-fell into recession 3 years ago. So, they "took it on the chin" for about 2 1/2 years or so, and then they emerged stronger than ever. I put "took it on the chin" in quotes, because that's a relative term for the richest 2% of the country. I suppose they couldn't buy a new house and a new Ferrari the same quarter, they couldn't get that new yacht they had their eye on just yet... you know, sacrifices. So, why would the Republicans be so willing to intentionally tank the market just to lay it at Obama's feet? Because who are they really hurting by doing it? The richest 2% came out better than ever just 3 years after the worst recession since the great depression, and that was a global financial meltdown that exceeded even the predictions of the people who caused it to happen. This time, they know what's coming, because they're telling the Republicans to let it happen, I'm pretty sure they all moved their holdings into short-sell bets that the market would fail, made money on the tumbling Dow these last few days and are now hunkering down, holding on to their wealth, and just waiting until 2012 when they can get one of their guys back in the white house and make everything right in the world again.
See, the people who really know the market, they saw all this coming months ago. The people who really have the wealth and the power in this country? They control the markets. They pull the strings on our politicians, they tell their guys in Washington what to say and they know what is going to happen to the markets after they say it, so they adjust their investments accordingly. You don't get to be a billionaire hedge fund manager by "gambling" on the market - and you don't stay a billionaire hedge fund manager by letting the market control your money. The Wall St. barons, the guys with the real money and power in this country, they know what the markets are going to do because they are guiding the "invisible hand". They knew how to work the markets to get rich off the housing bubble, they knew how to work Washington to get bailed out when it all fell apart, they knew how to profit off the recession that they caused, they knew how to insure that the market crashed again over this manufactured debt ceiling crisis, and they know how to profit from the double-dip as well. When there's no more money to be made off the success of our working class, the Wall St. predators will start making money off of the failure of the working class instead.
But, don't take my word for it...
"When you look at this final agreement that we came to with the white house, I got 98% of what I wanted, I'm pretty happy." - John Boehner
In that video clip, Boehner not only confidently proclaims that he got "98% of what I wanted", but also re-iterates the stubborn refusal of the Republican party to budge on the subject of any tax increases for the wealthiest Americans - whether it be through direct tax increases or closing loopholes in the tax code. He concludes by saying "It's not as bad as it looks." Really, Mr. Speaker?
In the S&P's report on their downgrade of America's credit rating, they cite one of the main rationales for the downgrade as a lack of confidence in the capability of the Republican congress to budge on taxes. Saying, their belief in the Republicans to compromise "on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process." Furthermore, they go on to say that "Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty,"
As I've been saying since the news of China's downgrade hit the wire, there is an increasing vote of "no confidence" in our politicians to do the right thing in our country. "No confidence" in their ability to create jobs, get the people back to work, move towards significant economic growth and recovery, make meaningful progress on our debt and essentially do anything of substance to prove to the rest of the world that they're not all just a bunch of bitter, partisan do-nothings who care more about insuring they don't join the 10% of Americans who are unemployed in the next election than they do about lowering that 10% unemployment rate.
However, congress can't just lay this turd at Obama's feet and claim he crapped it out.
Obama came to congress with a proposal that was a balanced compromise of spending cuts, revenue increases and both short and long-term reforms that would rein in spending, generate more money to pay down the debt, promote infrastructure and other forms of job investment to get people back to work and begin growing the economy from the ground up again and put us back on track to get out of the mess we've been in since the Bush administration and an inept congress drove us off the cliff a full 6 years before the market actually crashed in 2008. You see, our problems didn't start in 2008, that's just when they came to a head. They started when Bush led our country into 2 unfunded wars, passed an unfunded Medicare Plan "D" prescription coverage program and turned the surplus he inherited from Clinton into a deficit by cutting taxes - a move that took a substantial amount of revenue out of a budget that he had just inflated well beyond it's means.
In spite of all that, congress refused to budge on anything that resembled a tax increase on the wealthiest 2%. They expected all of our budget problems to be solved by cutting spending, even though the lion's share of the spending that was pushing us into staggering debt was owed to policies the Republicans endorsed. The wars, entitlements aimed at pandering to senior voters, tax cuts for the wealthy - these were Republican policies, these were budget decisions made under Bush, to the applause of his Republican fellows in the house and senate. The first bank bailout was done under Bush's watch.
Obama stepped into a budget that was already bloated beyond comprehension, and he was faced with the worst economic crisis since the Great Depression. He did what FDR did - attempted to stimulate the economy through government spending. However, unlike FDR, Obama didn't spend enough to do the job, only just enough to keep things from getting worse. People don't want to hear about how bad things could have been. They want to see that things are getting better. The guy who's out of work doesn't really care that, were it not for Obama's stimulus, his neighbor could have lost his job too, he just wants to know when he's going to get another job again. The family who's house is $100,000 underwater doesn't really care if Obama's stimulus kept it from going $200,000 underwater, because either way they're screwed and are going to have to walk away from it and start all over again. That was the problem with the second bailout, it didn't "bail us out", it just controlled the bleeding. We needed the private sector to come in and stitch up the wound with "job creation", but - shock and surprise - that didn't happen, hasn't happened and still isn't happening, despite the Republican's insistence on only referring to rich people as "job creators".
Our country lost over 4.5 million jobs while Bush was in office, during the unbridled reign of the "job creators". Whenever a conservative is confronted with these facts, they make all the excuses in the world as to why those corporations and wealthy business owners had to fire all those people, and really, that's fine. You don't have to explain all the reasons why corporations and rich business owners have to fire hundreds of thousands of hard-working, middle-class Americans every year, you just have to stop calling them "job creators", because the only jobs they're creating are for more case workers at the unemployment office, and those are government jobs!
Obama's failure was depending on the "job creators" to actually create jobs.
He didn't spend anywhere near the amount he wanted to in the stimulus, due largely to pressure from Republicans, so he only spent enough to stop the bleeding and had to depend upon the private sector to come in and do the rest. He depended on banks to start lending, investors to start investing and "job creators" to start creating jobs. And, of course, none of that happened.
It's Obama's own damn fault. He apparently didn't watch the Neil Cavuto show when the fortune 500 company CEO publicly stated that they weren't going to create a single job or spend one penny towards fixing our nation's financial mess as long as Obama was in office.
He apparently didn't listen to Mitch McConnel publicly proclaim that the number one priority for the Republican congress was to make Obama a one-term president. A statement that has been repeated by every Republican presidential hopeful from Mitt Romney to Michele Bachmann. It's the rallying cry of the new, usurped Tea Party that is the minority voice that's running the show on the Republican side of Washington.
It's the mantra of the Koch-backed, Murdoch-propagandized, modern incarnation of the Tea Party. The guys who won their offices thanks to the grass-roots efforts of average, working-class Americans who wanted to shake things up in Washington, get rid of the out-of-touch, overspending, wasteful political status quo and replace all those crooks in office with men and women who represented the average American. Unfortunately, the people who the Tea Party elected aren't serving the people, they're serving the interests that were pulling the strings behind the scenes. They're serving the anti-government, anti-regulation, corporatist barons like the Koch brothers, Murdoch, and all the Wall St. fat cats who they claim to detest. They're pushing an agenda down the throats of congress that is in direct conflict with the interests of the middle-class men and women who voted for them. It's sad, really, how badly the average, working class men and women who call themselves "Tea Partiers" have been duped and sold out by the politicians they elected.
There's two "Tea Party's" in our country right now. One is the Ron Paul, grass-roots movement backed by hard-working, struggling men and women all over the country who are dissatisfied with the job our politicians on both sides of the aisle are doing in Washington. The other is the "Tea Party" that actually got elected. That's the "Tea Party Express", the Fox News usurped, Koch-backed, fiscal terrorists who are on a very specific agenda to destroy Washington, pass the blame entirely on the Democrats and Obama, and are treating the Tea Party like a car bomb in this process - they're going to get behind the wheel of it, load it up with legislative explosives, drive it right into Washington and take out as much as they can and leave the investigators to pick through the rubble afterwards for pieces of the Tea Party to try and re-create the events that just took place.
The goal of the "new" Tea Party in Washington is to destroy the government, because that's the goal of their wealthiest benefactors. Their agenda is to blame it on the Democrats, and cause a public backlash big enough to insure that Republicans are holding the purse strings for a long, long time. Their hostage is the middle-class. Their weapon is the Tea Party itself - the party that still unifies much of the middle-class and is now being used to convince them to vote against their own self-interests by continuing to support the maniacs who are in congress now.
"Would the Republicans really intentionally tank the market, losing all of that wealth in the process, just to make sure the Democrats lose in 2012?"
Not only would they, they already took out hedge bets on it happening.