The Joke's on Us

Marking his first 110 days in office, President Barack Obama ,aka, Chief Occupier, displayed his skill as a stand-up comic. "You know, it's been a whirlwind of activity these first 100 days," he jested. "We've enacted a major economic recovery package, we passed a budget and no president in history has ever named three commerce secretaries this quickly. Just last week, Car and Driver named me auto executive of the year. Something I'm very proud of."

The trouble is that the joke is at the expense of the American people, that’s you and me.

Obama has embarked on a strategy for the world to spend its way out of recession. His budget, inclusive of purchases of toxic assets, will saddle taxpayers with an additional $8.5 trillion in debt, or after interest, $200, 000 for every tax-paying family.

The underlying logic is that if the global boom following the hi-tech collapse rode on the back of the policies that created the sub-prime crisis, then a taxpayer-funded spending splurge should do the same trick.

The second step in the master plan was to go global. Luckily, a huge global stimulus package that was to be led by the Group of 20 nations has hopefully failed at least for now. Not content with bailing out defaulting banks and insurance companies with the failed management still in place and in receipt of huge bonuses, the same logic has been extended to defaulting nations. Anticipating more failures, the International Monetary Fund has received a huge funding boost, despite an abysmal track record.

The common thread underlying this administration has been to preserve failed or failing management of enterprises (and nations) at any cost.

In not too many years past, recessions once could be relied on to shake out and renew failed management in a form of creative destruction so that we could all prosper in the next boom. This is no longer the case.

Through hundreds of years the legal system has evolved to facilitate critical renewal of management. This process of putting the debt holders in charge when equity holders fail to properly monitor management has a name. We call it bankruptcy.

Because this word has ugly connotations - executives lose their jobs as well as their bonuses - Obama has attempted to abolish it. It doesn’t fit well into his more gently government concept where even terrorist are no longer called terrorist-- unless they happen to be American’s who disagree with his policies. To further clarify these new terrorist as those who cling to their “guns and Bibles”, who are against wholesale abortion, who call for border control and immigration laws to be upheld and returning military members who have given so much to rid this world of the real terrorist.

In an extreme example of “public-spirited compassion” (sarcasm intended), potentially hundreds of billions have been poured into American International Group, enabling business as usual for its failed executives, including more bonuses. Its role was to provide "pretend" insurance for issuers of sub-prime loans when even the previous administration was calling for the two arms of the US Government, Freddie Mac and Fannie Mae, to investigate and stop the underwriting of outrageous home mortgages. General Motors will be paid billions more by taxpayers to produce more failing cars. Schemes to encourage entrepreneurial American’s to start innovative businesses are abolished to fund what amounts to a public charity located in Detroit, which is shortly likely to belong to the US Government.

Vastly higher public debt levels are no more than a revival of rising private debt levels from the sub-prime era. The difference is that the burden is being shifted to the taxpayer and higher inflationary expectations.

With economies across the world shrinking - Britain by 4 per cent, Ireland by 8 per cent - the cost of borrowing in real dollars is falling along with demand. At the same time, the American taxpayer is becoming more beholden to banks as Obama’s guarantee enables investment banks, as well as regular banks, to borrow even more billions. Yet Obama’s intervention is promoting excessive risk-taking at the expense of the taxpayer, not providing a cure. Indeed, the public is being forced to financially back the people Obama has denounced since the beginning of his campaign.

In his first 110 days president Franklin Roosevelt gave the world the New Deal, which helped to prolong the Depression until World War II. Labour monopolies with high wages were promoted along with trade restrictions that made employing more workers almost impossible.

In his first 110 days, Obama has set himself up for a failed course of action that will not only delay recovery but sow the seeds for future disasters. To make matters worse he wants to continue to increase the spending by a few more trillion dollars on a doomed Federal Health Care Program.

In all of this he seems to think it all a joke, something to be laughed at, as was demonstrated in his remarks at the White House Correspondents' Association Dinner. His “jokes” fall lower than supposed comedienne Wanda Sykes stating she was hoping that Rush Limbaugh’s kidneys would fail, because folks the joke is on us.

I’m not laughing.