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Front Page » March 10, 2009 » Opinion » My response to the White House from Main Street
Published 1,870 days ago

My response to the White House from Main Street


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By JIM CRAMER

I am a fight-not-flight guy, so I was on my hackles when I heard White House Press Secretary Robert Gibbs' answer to a question about my pointed criticism of the president on multiple venues, including the Today Show.

"I'm not entirely sure what he's pointing to to make some of the statements," Gibbs said about my point that President Obama's budget may be one of the great wealth destroyers of all time. "And you can go back and look at any number of statements he's made in the past about the economy and wonder where some of the backup for those are, too."

Huh? Backup? Look at the incredible decline in the stock market, in all indices, since the inauguration of the president, with the drop accelerating when the budget plan came to light because of the massive fear and indecision the document sowed: Raising taxes on the eve of what could be a second Great Depression, destroying the profits in healthcare companies (one of the few areas still robust in the economy), tinkering with the mortgage deduction at a time when U.S. house price depreciation is behind much of the world's morass and certainly the devastation affecting our banks, and pushing an aggressive cap and trade program that could raise the price of energy for millions of people.

The market's the effect; much of what the president is fighting for is the cause. The market's signal can't be ignored. It's too palpable, too predictive to be ignored, despite the prattle that the market's predicted far more recessions than we have.

How much I wish it were true right now that stocks played less of a role in peoples' lives. But stocks, along with housing, are our principal forms of wealth in this country. Only the people who have lifetime tenure, insured solid pensions and rent homes but own no stocks personally are unaffected. Sure that's a lot of people, but believe me, they aspire to have homes and portfolios. If we only want to help those who have no wealth to destroy, we are not helping the majority of Americans; we are not helping the broader population.

But Obama has undeniably made things worse by creating an atmosphere of fear and panic rather than an atmosphere of calm and hope. He's done it by pushing a huge amount of change at a very perilous moment, by seeking to demonize the entire banking system and by raising taxes for those making more than $250,000 at the exact time when we need them to spend and build new businesses, and by revoking deductions for funds to charity that help eliminate the excess supply of homes.

We had a banking crisis coming into this regime, but now every area is in crisis. Each day is worse than the previous one for this miserable economy and while Obama's champions cite the stimulus plan, it's really just a hodgepodge of old Democratic pork and will not create nearly as many manufacturing or service jobs as we hoped. China's stimulus plan is the model; ours is the parody.

Sure there's going to be some mortgage relief, but the way to approach that problem is to eliminate the overhang, which a $15,000 tax credit for existing home sales could have dented if not consumed. I have offered a comprehensive plan of 4 percent refinanced mortgages for all by the government, not just those many considered deadbeats, to eliminate moral hazard. I have come up with a novel plan to cut the principal and spare the banks regulatory problems by offering them a certificate of equity, making them whole over time when the house appreciates in value, which will happen if demand is stoked and supply is shrunk.

Which leads me to the true irony of not being political: I don't like talking politics. It is personal, but some things are a matter of public record, including my substantial six figure donations to the Democratic Party before I was no longer allowed to contribute by contractual agreement. I regard two Democratic governors as my friends, and helped back one of them in a major financial way and spoke and campaigned directly for the other.

Most important, I believe his agenda is crushing nest eggs around the nation in loud ways, like the decline in the averages, and in soft but dangerous ways, like in the annuities that can't be paid and the insurance benefits that will be challenging to deliver on. So I will fight the fight against that agenda.

If that makes me an enemy of the White House, then call me a general of an army that Obama may not even know exists-tens of millions of people who live in fear of having no money saved when they need it and who get poorer by the day.

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