The stock market is in freefall once again, evoking specters of 2008. As one fund manager told the Wall Street Journal on Monday, “the sense of déjà vu is almost sickening.” The storied Dow lost more than 600 points Monday following huge declines late last week, appeared to get its footing yesterday, then plunged more than 500 points today. All over the world, markets are taking stock, so to speak, of the burgeoning debt crisis in the United States and Europe, and fearing the worst.
Despite the parallels with the autumn of 2008, the Wall Street Journal views the two crises as stemming from entirely different causes. Wrote the Journal’s Franceso Guerrera on Tuesday:
"The Fed spoke and financial markets rallied," began the Associated Press report on how the stock market responded after the policy-making panel of the Federal Reserve Board issued a statement Tuesday, saying the federal funds rate (the interest banks charge other banks for borrowed money) would be held to 0 to 1/4 percent through the middle of 2013. The Dow Jones industrial average surged more than 429 points, just one day after its biggest decline since 2008.
But the Fed's influence over the volatile stock market is of short duration and its ability to bolster a sagging economy is illusory. The Federal Open Market Committee's promise of low interest rates was accompanied by an assessment of current market conditions that look anything but promising. "Indicators suggest a deterioration in overall labor market conditions in recent months, and the unemployment rate has moved up. Household spending has flattened out, investment in nonresidential structures is still weak, and the housing sector remains depressed," the committee reported. On the plus side, "business investment in equipment and software continues to expand."
Senate Majority Leader Harry Reid was the first to announce his three nominees to the “Super Committee” created by the recent debt ceiling increase, and all three fit the mold of big-spending liberals: Senators John Kerry (D-Mass.), Max Baucus (D-Mont.), and Patty Murray (D-Wash.), the latter of whom will also serve as co-chairman of the committee. Reid observed of his picks:
In Don Marquis' classic satirical book, "Archy and Mehitabel," Mehitabel the alley cat asks plaintively, "What have I done to deserve all these kittens?" That seems to be the pained reaction of the Obama administration to the financial woes that led to the downgrading of America's credit rating, for the first time in history.
There are people who see no connection between what they have done and the consequences that follow. But Barack Obama is not likely to be one of them. He is a savvy politician who will undoubtedly be satisfied if enough voters fail to see a connection between what he has done and the consequences that followed.
To a remarkable extent, he has succeeded, with the help of his friends in the media and the Republicans' failure to articulate their case. Polls find more people blaming the Republicans for the financial crisis than are blaming the President.
Residents of the Windy City may have to do without their favorite ice cream for a while, and possibly for good; and they have government to thank for it. According to the Chicago Tribune, Kris Swanberg, a laid-off Chicago public school teacher who chased the American Dream by starting her own business making artisanal ice cream, was recently told by the Illinois Department of Public Health that she will have to stop selling her product, Nice Cream, until she obtains a dairy license.
Getting and keeping the license, however, may be cost prohibitive for such a small business.
Observers note that President Barack Obama seems to enjoy comparing himself to former President Dwight Eisenhower, having repeatedly claimed that he was reducing federal spending to Eisenhower-era levels. Although his assertion that the recent debt-ceiling deal would produce “the lowest level of annual domestic spending since Dwight Eisenhower was President” proved to be false, it is easy to understand why Obama wants to be like Ike: Today the 1950s are often viewed, rightly or wrongly, as an era of stability and prosperity in America, with Eisenhower the reassuring, moderate presence guiding it all.
On one count, however, Obama may find the comparison to Eisenhower particularly unflattering. For all his willingness to go along to get along, developing New Deal programs and launching big-government initiatives of his own, Eisenhower and his equally free-spending predecessor, President Harry Truman, couldn’t hold a candle to Obama when it comes to running up Uncle Sam’s credit card.
According to the Obama administration and our country’s leading liberal media, the Tea Party is responsible for all of our present financial woes. But, as anyone with a brain knows, what has led us to this crisis-turned-catastrophe is not the Tea Party, which is of recent formation, but the endless spending by leftist politicians over the last 60 years who have borrowed big-time to finance all of this government socialism. And since almost all Americans, whether they like it or not, have been hitched to this money train, we’ve been inclined to let it all happen with blinders on assuming that our elected leaders knew what they were doing.
It is obvious that Republicans are as much to blame as Democrats. Nowhere, during this endless build up of debt, did a single Republican president say “enough is enough.” No Republican president was willing to see the train-wreck ahead and warn the American people that this unlimited spending had to stop. Reagan made a tepid attempt to abolish the Department of Education, but his fellow Republicans refused to even consider the idea. Education has become the holy of holies, and even today with the nation on the brink of insolvency, Obama wants to increase spending on “edgukashun.”
President Barack Obama has called for a luxury tax on corporate jets as a means to generate revenue to fight federal deficits. The president's economic advisers ought to be fired for not telling him that doing so is unwise and counterproductive. They might have already told him so, only to have the president say, "Look, I know you're right, but I'm exploiting the public's envy of the rich!" Let's look at what happened when Obama's predecessor George H.W. Bush signed the Omnibus Budget Reconciliation Act of 1990 and broke his "read my lips" vow not to agree to new taxes.
When Congress imposed a 10 percent luxury tax on yachts, private airplanes and expensive automobiles, Sen. Ted Kennedy and then-Senate Majority Leader George Mitchell crowed publicly about how the rich would finally be paying their fair share of taxes. What actually happened is laid out in a Heartland Institute blog post by Edmund Contoski titled "Economically illiterate Obama, re: Corporate Jets" (7/12/2011).
Suppose a nation was so blessed with natural resources that it almost could not be poor. Suppose that this nation led the world in gold and chromium production, that it was second in the world in platinum, zirconium, and manganese production, third in vanadium production, fifth in diamond production, seventh in iron and coal production, and produced large amounts of many other minerals and valuable elements as well.
Now suppose that this nation was also among the most richly endowed agricultural areas in the world — that it produced very large export crops of apples, apricots, pears, lemons, tangerines, grapes, and oranges, and that it also was among the world’s major producers of corn and wheat. Such a land would be even more blessed than Saudi Arabia, because as valuable as oil is today, it is affected by the market price of energy for that single resource.
Sen. John Kerry (D-Mass.), among other prominent Democrats, blamed the Tea Party for S&P’s downgrade of the U.S. government's long-held AAA credit rating. In the aftermath of this historic U.S. fiscal shift, which arrived despite the $2.5 trillion deficit reduction plan passed last week, the congressional blame game is an inevitable outcome, and Sunday shaped the springboard for Congress to indulge the media in partisan pandering.
"This is the Tea Party downgrade because a minority of people in the House of Representatives countered even the will of many Republicans in the United States Senate who were prepared to do a bigger deal," Sen. Kerry said Sunday on NBC’s Meet the Press, referencing the Senate’s bipartisan "Gang of Six" plan, which compromised spending cuts for tax increases.
Responding to Kerry’s accusation, John McCain (R-Ariz.) — who recently called House Republicans "hobbits" for their thwarted balanced budget amendment — defended Tea Party Republicans, while congratulating them for keeping their 2008 campaign promises.