Obama 1, Tea Party 0, Dow -266
Obama took advantage of the naiveté of Tea Party Radicals to force the cockroaches out into the kitchen with the lights on. According to polls even the average Republican voter now favors taxing the rich and Obama can run as the adult in the room who wanted to do just that. Republicans really didn’t want to cut government spending, they never do that when they are in charge. The Republican base always wants cuts until they realize the Tea Party Congressmen want to get their Government hands on people’s Medicare.
The Federal budget isn’t distributed the way the Right Wing talking points describe it, 50% welfare and 50% foreign aid. Any real cuts will affect Republican voters and since it will be the Republicans will be making the cuts without Obama getting his hands dirty then they will have to answer for the cuts. Billionaire funded think tank talking heads are out in force singing the praises of cutting spending even while the stock analysts are pointing out that cutting spending means cutting demand and no demand means no business, and that means no stock market. If Democrats can’t get elected now in any Congressional district with indoor plumbing, something is wrong. (yes there are things wrong, Citizen‘s United to be specific)
The markets gave up all the gains made this year in just the past week. Last month’s consumer spending report took the first downturn in the past two years despite a slight up-tick in family income. The Manufacturing Index is down to where negative growth is a hair’s breath away. Any cut in demand will tip us over the edge into free fall and the markets are seeing it exactly that way.
Gold is up $40 but the USD is stronger and Treasuries continue to go up and interest down. You see the rating agencies are just whoring for the big bankers and hedge funds who will clean up in a crash. The debt crisis was completely phony but the uncertainty it has created is weighing on the economy. Even though the first trillion in cuts won’t take effect for years, the fear is that the Death Panel Jury of Twelve will do something really stupid.
In reality the Super Congressional Committee is only a Gang of Seven since a majority vote is all that’s needed to lay down cuts that can’t be debated or amended but only voted up or down. Our future could be decided by six Republicans and one blue dog Democrat and their list of cuts must be approved or the axe falls heavily on the Pentagon. Of course anything they do can be reversed by normal legislation if the President will sign it or Congress overrides his veto.
So in reality Congress is just kicking the can down the road to see who wins in 2012. Obama thinks he’s positioned himself well and if he doesn’t get blamed for the crash he might be right. Did you notice that even with the Tea Party in the forefront of the news that there were no rallies? www.prairie2.com