Obama is Going to Win, Does it Matter?
Let’s set some facts straight: Mitt Romney isn’t going to win, a strong first debate performance is not going to erase the memory of the 47% percent or the countless gaffes, flip-flops and largely a lackluster campaign. Obama’s approval rating isn’t dismal and he’s a likable guy, so that’s that.
Now unto the topic of Obama’s reelection and the following speculation of what could happen in the next four years. The last four years, without denial, were pretty bad. Ignoring the numbers the Obama camp likes to throw out, true or not, the general feeling of the past four years has been of desperation, of an incompetent, bitter political system and of a slow moving economy, still prone to panic.
A health care bill will not fix the economy, period. The lasting impression of the Obama White House has been of an administration without a plan. It seems that so much energy, thought and concentration was put into his 2008 campaign, that once he was elected, the whole team was exhausted and had no fresh ideas.
So Obama is reelected, and a Fiscal Cliff is due on January 1st. As I have already mentioned multiple times, the Fiscal Cliff is an expiration date on all sorts of government tax cuts and budgetary expenses. Therefore, once it’s gone, a lot of people will see their taxes go up.
Americans have a very stingy relationship with taxes, hell, taxes made them revolt!
Taxes are the GOV’T way of paying for the services we use every day. The bus stop, police and firemen, the road and the library, all of these are paid for by your taxes. But when do taxes cross the line and become burden on the economy? And where do these taxes go with all the government debt all countries seem to have these days?
Before the recession, we have enjoyed a steady, rapid rise in the markets, low taxes and a general boost in prosperity and happiness. Don’t know about you but I remember 2005-2007 with fond memories, it was a time heavy borrowing, both from citizens and governments, debt was so easy it was a non issue. Banks gave away money practically for free and government borrowed like crazy selling its bonds to the FED like there’s no tomorrow.
Then the crash happened, and a somber, yet slow realization of the shit we’ve put ourselves into came: We’re going to pay hard for all those few years of unbound prosperity.
The Obama Administration came in, bailed out banks and signed a couple of stimulus packages, which are just low taxes for businesses and keeping rates low. They are going to expire on January 1st, and it seems no one can stop it. So let’s see how exactly that is going to affect United States:
Obama vs. Media
First and foremost, as anything in the world of politics, this is going to become a national, mainstream media political reality show, as with the deficit ceiling debate last year. Fox and MSNBC will talk about this non-stop, interview loads of cronies, so on and so forth. So why does it matter? Well, political decisions, budgetary decisions are made every day in Washington, but you don’t see the market plummet or go up because of that every day, do you? If you remember the DOW and FTSE in August 2011, you know what I’m talking about here; markets all over the world went crazy over some absurd political show. The ceiling was raised dozens of times under bush and under Clinton, but you didn’t see such panic then!
Alright, so because Obama’s going to win and Republicans won’t be happy with it, expect some bitter political shit throwing in the beginning of the year. The media is going to love this and report it like it’s the second Katrina, alerting investors all over again.
Obama vs. Economy
Second, it is largely expected that these deficit cuts and tax rises will lead the US economy into the second recession. That’s the last thing we need right now. Let me get something straight: these aren’t some draconian tax hikes, these will rise up to 5% percent, nothing to blow your brains out for. But the way the American public, the media and the politicians frame the debate, this is going to be the Armageddon, and people will over-react to the fullest. Investors, especially at times like these, are highly stressed and cautious, a single word out of Bernanke’s ass is going to send them packing to Cayman Islands. The effects a second recession might produce are a topic of a few nightmares to come.
Obama vs. People
A third, and the subject of this article, is the Obama Administration. Right now, rightfully so, Obama blames Bush for the mess, this is true. But if another recession will begin under his presidency, he’ll lose that card and boy I don’t want to be him when that happens. Judging by his record, the way he’s going to combat a recession and public discontent is by signing tax cuts and trying to be bipartisan. It seems Obama doesn’t learn his lessons, he’s still pushing his bipartisan image to the public, and Republicans use it to their advantage every time they get some air time on the TV.
He’s divisive and partisan, they say, we’re the real bipartisan, they say. What the fuck is your point trying to reach over the aisle when they spit in your face, Obama?
The political consequences of another recession are dire. I hope that because Obama won’t worry about a second term he’s going to be more aggressive and fresh with his politics, but it’s a shoestring hope. Facts point to the opposite, Obama isn’t politically strong, his convictions are vague, and his centrist views are repelling his liberal supporters and playing in the hands of conservatives. I don’t know what needs to happen for Obama to change, but a second recession it won’t be.