As Economy Tanks Under Obama, CEOs, Investors Say, "We TOLD You So"

Start Thinking Right ^ | February 13, 2009 | Michael Eden

[Michael Eden]

In January, the US saw nearly 598,000 jobs go by the wayside, the most losses in a single month since 1974. That follows the 577,000 jobs that were lost in December.

The "conventional wisdom" blathered by the blatantly dishonest and foolish mainstream media is that these losses are the result of the economic downturn that hit the economy under George Bush.

But while there is certainly an element of partial truth to this view, it is by no means THE truth. And the mainstream media most certainly don't want you to know the rest of the story.

As a result of all of this continual decline in market confidence - and the decline in jobs that accompany such a lack of confidence - President Obama is cynically attempting to put as much blame on the Bush administration as possible:

January’s Employment Situation Report from Uncle Sam’s Bureau of Labor Statistics (BLS) was even worse than expected. Seasonally adjusted employment fell by 598,000 jobs and the unemployment rate rose to 7.6%.

In his Saturday address that followed this news, President Barack Obama was correct in pointing out that 3.6 million jobs have been lost since the recession, at least as “defined” by the National Bureau of Economic Research (NBER), began. The recession, as normal people define it (”a decline in gross domestic product [GDP] for two or more consecutive quarters”), began in the third quarter of 2008 and became official late last month when the fourth quarter came in negative.

What Mr. Obama “somehow” forgot to tell us is that almost 1.8 million of those seasonally adjusted job losses have occurred since his election, when his non-stop economic no-confidence game went into high gear, and that 2.8 million jobs have gone away during the seven months that began in July 2008, the first full month of the POR (Pelosi-Obama-Reid) economy:

And what is causing this incredible momentum to the economic meltdown under Obama's watch?

Let me quote myself - even as I quote from the September/October issue of Chief Executive Magazine:

People are most concerned about jobs right now; maybe they should stop listening to mainstream media ideologues and start listening to the people who actually create jobs:

Chief Executive Magazine’s most recent polling of 751 CEOs shows that GOP presidential candidate John McCain is the preferred choice for CEOs. According to the poll, which is featured on the cover of Chief Executive’s most recent issue, by a four-to-one margin, CEOs support Senator John McCain over Senator Barack Obama. Moreover, 74 percent of the executives say they fear that an Obama presidency would be disastrous for the country.

“The stakes for this presidential election are higher than they’ve ever been in recent memory,” said Edward M. Kopko, CEO and Publisher of Chief Executive magazine. “We’ve been experiencing consecutive job losses for nine months now. There’s no doubt that reviving the job market will be a top priority for the incoming president. And job creating CEOs repeatedly tell us that McCain’s policies are far more conducive to a more positive employment environment than Obama’s.”

“Disastrous for the country.” That doesn’t sound good. And that’s about as optimistic as the CEO’s get about Barack Obama:

“I’m not terribly excited about McCain being president, but I’m sure that Obama, if elected, will have a negative impact on business and the economy,” said one CEO voicing his lack of enthusiasm for either candidate, but particularly Obama.

In expressing their rejection of Senator Obama, some CEOs who responded to the survey went as far as to say that “some of his programs would bankrupt the country within three years, if implemented.” In fact, the poll highlights that Obama’s tax policies, which scored the lowest grade in the poll, are particularly unpopular among CEOs.

“Bankrupt the country within three years.” There. You want socialism, you can have it. “Spread the wealth around” so that country itself ultimately becomes as broke as the defaulting homeowners and the defaulting mortgage houses we keep hearing about.

The Chief Executive Officers were very clear in their assessment: an election of Barack Obama would result in an economic disaster. And don't think that a significant part of the terrible climate for the economy, and for business and jobs, is who is running the show right now.

A Politico story from October 22, 2008 put it this way:

Generally, financial analysts say the stock market likes Republicans more than Democrats. And while predicting market movements is as difficult as predicting the winner of the World Series in August, some experts say the market is already anticipating an Obama win on Nov. 4 and has at least partially accounted for it.

“Potentially, you could see a one or two-day rally on a McCain victory, and not much of a reaction if Obama wins, because that’s what’s expected at this point,” said Justin Fishkin, a partner at The Cypress Group, a financial services company in Washington, D.C. Fishkin, who earlier in his career was a hedge fund manager specializing in political, regulatory, and legislative event-driven investments, said the key issue on Wall Street minds is corporate taxation — which is why the market might prefer McCain and his promised rate cuts over Obama.

In other words, a significant part of the massive sell-offs we saw even prior to the election were inspired by the belief that Obama would win the White House and start screwing up the economy with his socialism. And he has given them no reason to think anything else since.

MSN ran an article entitled, “Why Wall Street Fears Obama“:

Investors this summer have been placing their bets on an Obama presidency, and for the most part that hasn’t been good for the market.

Without giving him a chance to explain himself in detail on the campaign trail or at the Democratic National Convention, they are voting with their shares by tossing financial, health insurance, manufacturing and high-dividend stocks into the ash can, and are growing skeptical about energy companies as well.

It’s not that major institutional investors don’t like the man — far from it. He has many backers among the financial elite, including multibillionaires George Soros and Ron Burkle. And it’s not that there aren’t many other reasons for investors to sell stocks now, as the global economy tangles with the terrible twin beasts of bank deleveraging and inflation.

It’s just that Obama’s rhetoric on taxes and health care is scaring common wealthy people with large capital gains from investments made over the past decade, and a lot of them don’t want to wait around to see whether it’s just populist fluff that might be set aside once he takes office.

And as terrible as an Obama victory was for investors who sustain economic viability with their investment, what was even worse was the fear that Democrats would assume total control of the Congress. Basically, the more Democrats there are, the less the market likes it.

Joe Lieber, a political analyst at the consulting firm Washington Analysis who scrutinizes elections for his clients at hedge, mutual and pension funds, said an electoral lurch that gave the Democrats 60 seats could prompt a dramatic sell-off on Wall Street.

“We’re getting a lot more questions about the Senate than the presidential [race],” Lieber said, “because there’s almost nobody on Wall Street right now who believes McCain’s going to win.” A filibuster-proof Democratic majority (three-fifths of the chamber, or 60 senators) would not be well received by Wall Street traders, he added. “A lot of investment professionals don’t necessarily want to give one party the keys to the entire city. Free markets like gridlock.”

But now we're supposed to believe that the nosediving market has nothing to do with the Obama presidency and the gains of Democrats in Congress?

Let's go back to November 5, the day after election day:

NEW YORK, Nov 5 (Reuters) - Wall Street hardly delivered a rousing welcome to President-elect Barack Obama on Wednesday,dropping by the largest margin on record for a day following a U.S. presidential contest.

So while the mainstream media was singing the praises of Barack Obama and heralding, "The Messiah will heal the economy as easily as he walks on water!" businessmen and investors were saying, "Whatever you do, DON'T elect this clown!" And while the mainstream media was sharing their conventional wisdom that difficult economic times favored Democrats with all the seriousness of a six-year old explaining the workings of an internal cumbustion engine, people who actually understood the economy (and whose investments made it go in the first place) were shouting, "DON'T burden us with Democrats!"

But we trusted the media propaganda machine and refused to listen to investors and business leaders.

And as we allow Democrats to ram a massive "stimulus" bill through that will only stimulate every liberal social spending program under the sun, we won't bother to listen to the Congressional Budget Office, either:

President Obama's economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.

CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.

And the negative evaluation of investors' and businesses' confidence in Obama has continued:

Stocks tumble after gov't unveils financial plan

By TIM PARADIS, AP Business Writer Tim Paradis, Ap Business Writer – Tue Feb 10

NEW YORK – Investors are frustrated with the government's latest bank bailout plan — and showed it by unloading stocks.

The major stock indexes fell more than 4 percent Tuesday, including the Dow Jones industrial average, which tumbled 382 points. Financial stocks led the market lower, a sign of how concerned Wall Street is about the government's ability to restore the health of the banking industry. Demand for safe havens like Treasurys and gold rose.

Traders and investors complained about what they saw as a lack of specifics from Treasury Secretary Timothy Geithner on how the government will direct more than $1 trillion in public and private support to the financial system.

And

Oil slides toward multiyear lows

By MARK WILLIAMS, AP Energy Writer Mark Williams, Ap Energy Writer

COLUMBUS, Ohio – Oil prices slid closer to a new multiyear low Thursday because of growing doubts that the $789 billion stimulus package will reinvigorate the economy and demand for energy.

Liberals have no idea how to create wealth; all they know how to do is redistribute it even as the economy tanks as a result. And - for all the media propaganda to the contrary - people who understand how the economy and how business works know it.

So as the economy continues to drop like a brick in a glass aquarium under the leadership of Barack Obama and his socialists in Congress, liberals, I hope you hear a continuous chorus of conservatives, business professionals, and investors shouting over and over again until it becomes a permanent echo in your tortured and fractured psyches, "WE TOLD YOU SO! WE TOLD YOU SO! WE TOLD YOU SO!"

And it shouldn't be long before a version of the mindless liberal hatchet job that was continually applied to Bush gets applied to Barack Obama: "Obama lied, the economy died."

Get used to that shrill little voice. Because it's going to be with you for the next four years.

[Michael Eden]

I found a better link to that Bachmann article:
http://michelebachmann.townhall.com/blog

[Michael Eden]

““People will be hunting Democrats with dogs by the end of the century” Phil Gramm (when asked what would result if Clinton’s proposals were passed.

Well Clinton went to the center, the repubs took over in 94, so we’ll see if Gramm’s remark’s are true this time around.”

I’ve got the biggest Rottweiler you’ve probably ever seen (nearly 32” at the shoulder and weighing 185 lbs, who frankly doesn’t like strangers, and I would like to volunteer to start hunting Dems with dogs.

[ChessExpert]

This is an excellent article!

Unfortunately many people will blame Bush because the problem started while he was President. I reply that things were fine back when we had a Republican Congress.

Timing can be messy in economics.

Some actions have delayed consequences (lags). Furthermore, the consequences of some actions accumulate. Not much happens after the causal event, but the effects gets bigger and bigger over time.

A common real world analogy would be turning on an electric stove to boil water. A critic might claim there is no causal connection between turning on the stove and the boiling of water. You turned the burner on and nothing happens. By the time the kettle does whistle, the critic can claim some other cause that may have just preceded the boiling of water.

How could the Community Reinvestment Act passed under Carter and reinvigorated under Clinton cause a recession under Bush? At least a part of the answer is that the effects grew over time.

Another problem with timing in economics is expectations. I think this article is right in arguing that investors (who by the way are also consumers) got cold feet about a Pelosi-Reid-Obama economy long before Obama’s inauguration and first policy decision.

[Michael Eden]

Chess Expert,
Thanks for the kind words.

I should have at least linked to one of my earlier articles, but my real purpose was to make the simple point that a BIG part of the reason the economy has so tanked is because of low investor/business confidence. And the reason that investors and business people have so little confidence is because they believe Obama will be a disaster.

While I think it is ALSO true that Dems actually deserve a lion’s share of the blame for the economic bloodbath that started in September due to the housing finance market collapse, I thought of that as a separate issue.

But here’s a link to an article I wrote just the other day on that:
http://startthinkingright.wordpress.com/2009/02/12/how-we-financial-disaster-a-tale-of-democrat-lies-and-deceit/

NO ONE was more responsible for the housing finance market collapse than Democrats: both in terms of their longstanding policies (e.g. the Community Reinvestment Act), their opposition to repeated efforts to regulate the GSEs, and their failure to act while the GSE stock dropped 90% under THEIR leadership.

We need to keep pounding away at the economy as issue. I think it’s sad, but if Dems handle the economy well, they abort as many babies as they want, or force their gay agenda, or damn near anything. Reveal they are incompetent frauds on the economy, and we cut the head off the snake.

[WOBBLY BOB]

proud to say she’s my Congresscritter.

[cherry]

things were "okay" before the rats took over Congress over 2 yrs ago.....gasoline skyrocketed under them, and the stock market crashed under them......

to his credit, Bush tried to warn people about Fannie and Freddie......

this is all the rats....all of it.