It was a year ago that I wrote on this blog that if at any point wall street determines that Obama or Hillary will become president the stock market turn bearish. And, as if I was right on the "bulls-eye" I was right. The economy started in a recession the moment Obama took a leap in the polls.
And the day he was elected the stock market took a dip and it has been dipping ever since. It appears that Obama-mania is bad news for the stock market just as I predicted. But I'm not the only one to make this prediction, as many real economic and wall street experts made the same.
The stock market started going down because the "investors" of this nation knew that Obama's economic policy would punish achievement. He would raise taxes on capital gains (of which he is now proposing), which is basically taxing profits. And, as history has shown, no tax effects investments more so than the capital gains tax; as capital gains taxes increase, the stock market decreases and vice versal.
A perfect example of this was in 1994. Sure Clinton raised taxes, but this was offset by Congress passing, and Clinton approving, a tax cut on capital gains taxes. The stock market continued to soar until just before G.W Bush was elected and the tax hike caught up with the economy and a small recession ensued.
Fear that Obama might raise their taxes has investors bowing out and selling and fearful of purchasing anything new. Fear that their taxes will go up has business owners holding pat on hiring new workers. And that fear may be warranted, as Obama just sent his trillion dollar budget to Congress. It has a trillion dollar tax hike for anyone making $250,000 or more. Of course we smart people know those are the people who do 80% of the hiring.
Obama's economic stimulus plan, and his budget for next year, and his other tax and spend policies of bailing out this failing company and that, has absolutely no incentives for any business to hire more workers.
In Michigan the past eight years businesses have been going to other states or closing their doors because of Granholm's liberal tax and tax and tax some more policies that leave businesses no choice. Granholm's mistakes are now being repeated by Obama.
Bush cut taxes and the economy roared four seven years despite 9-11 and despite other economic disasters that experts predicted would collapse the economy. And, only after bad loans that were encouraged by the government turned into bad assets did the economy tank. Which coincidently coincided with Obama's upsurge in the polls and eventual victory.
Yet, while Obama inherited a recession, he is turning it into a full blown panic and depression. He single handily has destroyed the economy. He has done so by his words. In every one of his speeches he says words that tear down the economy and create fear from businesses to every household in America and even around the world.
His words are dragging down the economy. And, as Dick Morris writes in his latest column, "It is President Obama, not the markets themselves, who has spread this fear. A global Paul Revere, he has not only aroused us, but incited fear and trepidation in his wake."
I cannot help but feeling this is a great big "I told you so." Yet, as Obama has done, the blame has shifted back to George W. Bush. But Bush did not hand Obama a depression. If that is where we are headed, it is all on Obama's head.
"In addressing this panic, the president of the United States must truly be the leader of the world showing the way back to confidence.Instead, Obama has been instrumental in purveying fear and spreading doubt. It is his pronouncements, reinforced by the developments they kindle and catalyze, that are destroying good businesses, bankrupting responsible people and wiping out even conservative financial institutions. Every time he speaks, he sends the markets down and stocks crashing. He doesn’t seem to realize that the rest of the world takes its cue from him. He forgets that he stands at the epicenter of power, not on the fringes campaigning for office."
Why does Obama preach gloom and doom? Because he is so anxious to cram through every last spending bill, tax increase on the so-called rich, new government regulation, and expansion of healthcare entitlement that he must preserve the atmosphere of crisis as a political necessity. Only by keeping us in a state of panic can he induce us to vote for trillion-dollar deficits and spending packages that send our national debt soaring.
So, having inherited a recession, his words are creating a depression. He entered office amid a disaster and he is transforming it into a catastrophe, all to pass every last bit of government spending and move us a bit further to the left before his political capital dwindles...
But the jig will be up soon.