The first paragraph doesn't set a good tone.
The three biggest changes in United States history since WWII, all three promising to have major impact on the future of the Republic, recently occurred within a period of a few weeks.
OK, since he mentions, in the next paragraph, the election of our first African-American President, I'll grant him that one. But, I wonder. What about, say, the Civil Rights movement and its legislative triumphs in the 1964 Civil Rights Act and 1965 Voting Rights Act? The construction of the Interstate Highway System? The Vietnam War? Watergate? How about, oh, the fall of the Berlin Wall, the collapse of communism in Eastern Europe in 1989, and the demise of the Soviet Union in 1991? They were kind of important, don't you think? Shoot, I'd put Woodstock - the original festival, not the awful imitations later on - above most of the rest of whatever he could mention.
He does mention Barack Obama's place in history in the second paragraph, but then the third paragraph is a wonderful example of combining a couple things that drive me nuts about American Thinker.
Politically, the USA has elected a far-left president, fulfilling an equally long struggle and threatening to fundamentally change the nature of the United States of America and its Constitution. Racial conflict preceding the War Between the States was contemporaneous with the early struggles of the socialists in Europe and in America.
First, Barack Obama is not "far left". I'm further to the left, politically, than Barack Obama, and I would not consider myself a socialist. This is simply a false statement, either a deliberate mischaracterization of the politics of our current President, or simple ignorance based on the idea that anyone to the left of Susan Collins or Joe Lieberman is, by definition, a hard-core Marxist. Since Barack Obama pledged to protect and defend the Constitution, as does every President (even Richard Nixon and George W. Bush made these pledges, even though they broke them), I'm not sure how his election threatens our Constitution.
It is the second sentence that has me puzzled. The socialist revolutions across Europe occurred in 1848, when the United States was engaged in an imperialist war with Mexico (we annexed roughly half their territory). The Civil War began in 1861. Thirteen years passed between the two events. Also, what, exactly is the relationship between the socialist uprisings in Europe, linked to early industrialization, and the Civil War, which began as a conflict over the spread of slavery in to the territories?
This political development is not promising; no socialist system of government has ever had the record of employment, productivity, innovation, and growth that the USA has enjoyed under a system of free-market, rule-of-law economics. On the contrary, socialist states are universally noted for functional inefficiency and institutional corruption, including the European Union (the most benign of the lot), which has suffered economic stagnation and demographic contraction since its founding in the early 1990s.
The mixed economies of Europe have out-performed the United States for years. To call the European Union "socialist" is on a part with calling Barack Obama "far left". It's just inaccurate. So, here we have a paragraph that is just wrong. Period. If you begin your argument stipulating as fact things that are not, you know, facts, you aren't off to a running start. In fact, you tripped at the starting line and are having a difficult time getting to your feet.
Financially, the USA has taken the greatest economic hit since at least the Great Depression. This has destroyed major chunks of our retirement and pension funds, and has essentially ended the prospect of Social Security ever being viable.
While the first sentence is correct, the whole business about Social Security is, once again, wrong. It demonstrates a lack of understanding about the way Social Security works, and it also begs the question, again, of relevance.
There has been remarkably little comment or connection drawn between these political and financial changes.
That's right. Not a single person in the press has talked about Obama's accession to the Presidency at a time of economic turmoil.
Investors have taken massive amounts of money out of the markets in a very short period, resulting in a worldwide markets crash in the range of $30 trillion and counting. Given the extremely poor performance of all socialist governments, no investor is willing to leave his assets exposed to leftist incompetence, corruption, or confiscation.
First, "investors" have not "taken massive amounts of money out of the markets". "Massive amounts of money" in the form of net worth disappeared; that is to say, it wasn't investors who took out that money by removing capital. The net worth, and capitalization disappeared as the market contracted. Right now, no one is investing anywhere, but the European markets are outperforming Wall Street precisely because, unlike here, it is understood the regulatory regimes in place provide safe-guards against the kinds of abuses that led to our current mess. That is to say, it is in the United States as a free-market that no on is willing to invest.
Markets express a level of confidence in the future of the economy, and as Obama's election prospects improved, confidence in the economic future plunged.
Most major market crashes are preceded by frenzied trading activity and very high price/earnings (P/E) ratios. A long-term average for stock P/E values is about 13, and a P/E ratio over 26 is generally regarded as excessive. The DOW P/E ratio was over 40 and the NASDAQ P/E ratio was over 60 when those values started down during Clinton's last year in the presidency, so that, by historical standards, a recession was virtually assured, and it came right on schedule. The recent DOW P/E ratio has been benign after hitting a high of slightly over 20 in late 2007 at the peak of the DOW. Consequently, in 2007/2008 there was little of the turbulent extravagance that historically marks major market peaks that precede market crashes; something else was at work in the markets and that something was the prospect of a leftist as president.
Actually, the markets were pretty up-beat about the possibility of Obama's election, especially after he displayed his remarkable restraint in September during the melt-down of the finance industry. As prospects of economic stimulus and support, rather than blank checks, continued to do well, the markets, while not robust, were certainly less volatile. It has only been as political conflict called in to question the viability of the stimulus plan and other measures Pres. Obama has offered that created confusion in the markets.
Also, it should be noted that many of the drops in the market had little to do with who was in office, but were related to events in economies and companies - earnings reports, the reported health (mostly lack thereof) of various economic sectors (especially the auto industry) - and other specific events. Whoever was in office, stock markets would have tumbled under the pressure of these events.
The Fed and the Treasury have been desperately taking corrective actions in today's markets, pumping mega dollars into banks and financial institutions and lowering interest rates in order to provide liquidity, because lack of liquidity and bank failures were major factors in the Great Depression. But it is now obvious that these actions are not working, and these actions have stopped. No one wants liquidity; everyone is searching for security. Investors that took their funds out of the markets were looking for a safe place to park their money, and were not looking for new investment opportunities. Banks seem to be stabilized at this point, but beyond that, corrective actions so far are having no effect in reviving the economy and businesses, and what we learned in the Great Depression has no application when confronting a socialist-led government in the USA now.
Unemployment is soaring, and will continue to soar as investment capital dries up. Investment pays for new construction, plants, office buildings, and equipment, and the massive withdrawal of cash from the markets means that investment, and jobs, will falter and fall. Borrowing money for an infrastructure-building stimulus package, as Obama proposes, is a dubious proposition at best.
Again, investors have not removed money. That money disappeared because a whole lot of people made bets on debt-backed securities and when it became apparent that those pieces of paper were worthless, their net worth contracted accordingly. It's really that simple. As for banks stabilizing, every week there are reports of FDIC taking over a few more, two just yesterday.
That investment has disappeared is true; it has done so because everyone is assuming the economy is going to get worse, and no one will make money. That's why Pres. Obama is proposing to invest in public projects; to create jobs, etc., etc. I will not remark on the silly "socialist-led government" business.
[T]he markets do not make major world-class moves in the absence of any stimulus or provocation, and this is by far the biggest markets reaction in history, with all indications that this is just the start. The election of Obama to the presidency of the United States is a radical, radical change in direction. The election of a leftist was an assault on both our financial institutions and our defining values.
Obviously it was the prospect of that commie Obama becoming President, and not the disappearance, at the beginning of 2007, of massive amounts of value from the housing market, and the debt structure underlying it, that brought about our current troubles. You see, the housing market understood before Barack Obama even declared he would run for the Presidency that he would win, so is collapsed well in advance, and the resulting recession, beginning a year ago, is all his fault.
RFLMAO. That's all I can say. This is just factually inaccurate, displaying a heroic lack of understanding of what's actually been happening for the past two years.
There is a broad range of projections for the future of the United States economy. Obama himself has stated that it will get worse before it gets better. We do know that investment capital has massively fled the markets, and this is a very bad sign for employment, growth, and productivity. Elimination of wasteful governmental socialist actions such as the War on Poverty (cost $6 trillion) and the Fannie and Freddie Mortgage Follies (cost unknown) would be a necessary first step to recovery, but from all indications, Obama intends to double down on activist government intervention.
The United States of America has had a remarkable run for over two centuries, and that run has been the product of our Constitution and a free citizenry. A citizen of the United States of America is in a privileged position in relationship to all the subjects, serfs, and slaves throughout most of the world. If you want your citizenship and your country you will have to fight for it, because socialists think they have a better idea, even though they invariably get worse results.
In conclusion . . . I can't take this anymore. This entire article is crap. It misunderstands, or misrepresents, everything from recent economic performance to the politics of our current President. It displays a remarkable lack of any grasp of what is necessary to actually deal with the events through which we are living. The constant, stupid, use of the word "socialist" obscures more than it reveals, and makes murky what should be clear.
This has been a difficult thing for me to do. I've had to stop several times because I just wanted to give up. Having to read something this bad, analytically speaking, from a periodical with the word "Thinker" in the title, is really almost physically painful for me. Furthermore, having to explain what should be self-evident, is tiresome work. That's why I don't usually do it.
Thus endeth the lesson
