[Vision2020] How Obama Saved Capitalism and Lost the Midterms

[Jeff Harkins]

  Mr. Egan would do well to review market performance - starting with a 
brief history of the Dow Jones.

Pay careful attention to Black Monday, the 1970's oil crisis, dot.com 
bubble, September 11 - all events bucking the trend of the market.

Here is a link for those that want a brief review of the Dow:

http://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average#September_11_attacks

On 11/7/2010 11:26 AM, Ted Moffett wrote:
> http://opinionator.blogs.nytimes.com/2010/11/02/how-obama-saved-capitalism-and-lost-the-midterms/?src=me&ref=general
>
> November 2, 2010, 11:59 pm
> How Obama Saved Capitalism and Lost the Midterms
> By TIMOTHY EGAN
>
> If I were one of the big corporate donors who bankrolled the
> Republican tide that carried into office more than 50 new Republicans
> in the House, I would be wary of what you just bought.
>
> For no matter your view of President Obama, he effectively saved
> capitalism. And for that, he paid a terrible political price.
>
> Suppose you had $100,000 to invest on the day Barack Obama was
> inaugurated. Why bet on a liberal Democrat? Here’s why: the presidency
> of George W. Bush produced the worst stock market decline of any
> president in history. The net worth of American households collapsed
> as Bush slipped away. And if you needed a loan to buy a house or stay
> in business, private sector borrowing was dead when he handed over
> power.
>
> As of election day, Nov. 2, 2010, your $100,000 was worth about
> $177,000 if invested strictly in the NASDAQ average for the entirety
> of the Obama administration, and $148,000 if bet on the Standard&
> Poors 500 major companies. This works out to returns of 77 percent and
> 48 percent.
>
> But markets, though forward-looking, are not considered accurate
> measurements of the economy, and the Great Recession skewed the Bush
> numbers. O.K. How about looking at the big financial institutions that
> keep the motors of capitalism running — banks and auto companies?
>
> The banking system was resuscitated by $700 billion in bailouts
> started by Bush (a fact unknown by a majority of Americans), and
> finished by Obama, with help from the Federal Reserve. It worked. The
> government is expected to break even on a risky bet to stabilize the
> global free market system. Had Obama followed the populist instincts
> of many in his party, the underpinnings of big capitalism could have
> collapsed. He did this without nationalizing banks, as other Democrats
> had urged.
>
> Saving the American auto industry, which has been a huge drag on
> Obama’s political capital, is a monumental achievement that few
> appreciate, unless you live in Michigan. After getting their taxpayer
> lifeline from Obama, both General Motors and Chrysler are now making
> money by making cars. New plants are even scheduled to open. More than
> 1 million jobs would have disappeared had the domestic auto sector
> been liquidated.
>
> “An apology is due Barack Obama,” wrote The Economist, which had
> opposed the $86 billion auto bailout. As for Government Motors: after
> emerging from bankruptcy, it will go public with a new stock offering
> in just a few weeks, and the United States government, with its 60
> percent share of common stock, stands to make a profit. Yes, an
> industry was saved, and the government will probably make money on the
> deal — one of Obama’s signature economic successes.
>
> Interest rates are at record lows. Corporate profits are lighting up
> boardrooms; it is one of the best years for earnings in a decade.
>
> All of the above is good for capitalism, and should end any
> serious-minded discussion about Obama the socialist. But more than
> anything, the fact that the president took on the structural flaws of
> a broken free enterprise system instead of focusing on things that the
> average voter could understand explains why his party was routed on
> Tuesday. Obama got on the wrong side of voter anxiety in a decade of
> diminished fortunes.
>
> “We have done things that people don’t even know about,” Obama told
> Jon Stewart. Certainly. The three signature accomplishments of his
> first two years — a health care law that will make life easier for
> millions of people, financial reform that attempts to level the
> playing field with Wall Street, and the $814 billion stimulus package
> — have all been recast as big government blunders, rejected by the
> emerging majority.
>
> But each of them, in its way, should strengthen the system. The health
> law will hold costs down, while giving millions the chance at getting
> care, according to the nonpartisan Congressional Budget Office.
> Financial reform seeks to prevent the kind of meltdown that caused the
> global economic collapse. And the stimulus, though it drastically
> raised the deficit, saved about 3 million jobs, again according to the
> CBO. It also gave a majority of taxpayers a one-time cut — even if 90
> percent of Americans don’t know that, either.
>
> Of course, nobody gets credit for preventing a plane crash. “It could
> have been much worse!” is not a rallying cry. And, more telling,
> despite a meager uptick in job growth this year, the unemployment rate
> rose from 7.6 percent in the month Obama took office to 9.6 today.
>
> Billions of profits, windfalls in the stock market, a stable banking
> system — but no jobs.
>
> Of course, the big money interests who benefited from Obama’s
> initiatives have shown no appreciation. Obama, as a senator, voted
> against the initial bailout of AIG, the reckless insurance giant. As
> president, he extended them treasury loans at a time when economists
> said he must — or risk further meltdown. Their response was to give
> themselves $165 million in executive bonuses, and funnel money to
> Republicans this year.
>
> Money flows one way, to power, now held by the party that promises tax
> cuts and deregulation — which should please big business even more.
>
> President Franklin Roosevelt also saved capitalism, in part by a bank
> “holiday” in 1933, at a time when the free enterprise system had
> failed. Unlike Obama, he was rewarded with midterm gains for his own
> party because a majority liked where he was taking the country. The
> bank holiday was incidental to a larger public works campaign.
>
> Obama can recast himself as the consumer’s best friend, and welcome
> the animus of Wall Street. He should hector the companies sitting on
> piles of cash but not hiring new workers. For those who do hire, and
> create new jobs, he can offer tax incentives. He should finger the
> financial giants for refusing to clean up their own mess in the
> foreclosure crisis. He should point to the long overdue protections
> for credit card holders that came with reform.
>
> And he should veto, veto, veto any bill that attempts to roll back
> some of the basic protections for people against the institutions that
> have so much control over their lives – insurance companies, Wall
> Street and big oil.
>
> They will whine a fierce storm, the manipulators of great wealth. A
> war on business, they will claim. Not even close. Obama saved them,
> and the biggest cost was to him.
> ------------------------------------------
> Vision2020 Post: Ted Moffett
>
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