Sapienza on Obama

President Obama and his staff are quite savvy when it comes to technology and social sites, in particular, so it shouldn’t come as a surprise that they will turn to the social sharing to win the election. Obama’s challenge is to convince a wary and anxious America to stick with the status quo. The working-class and our middle-class values have essentially disappeared. We have people who used to be considered “middle class,” now seeking handouts and freebies once reserved only for the neediest poor. It’s a fast-growing percentage of Americans who truly believe their well-being is primarily someone else’s responsibility. And on the other end, we have an upper class that has completely abandoned their middle-class values, and has instead adopted a “get mine at any cost” mentality – “a festering of greed”. Our political leaders, our business leaders, and our cultural leaders have made a series of catastrophic choices. Unfortunately for America, the Obama administration has lost the plot, too. President Obama has only one idea for job creation: fiscal stimulus. But when stimulus turned out to be dubious policy and disastrous politics, he was left with nothing else to propose. So, what will Obama do if re-elected?

With an incumbent administration out of ideas, it’s going to be a game of musical chairs between the usual Republican suspects and the usual Democrat suspects. The argument – sure government is inefficient but the private world is different, not better. Recall Enron, Lehman, BP, etc. Remember the savings and loans crisis? How about those great private on-line colleges that do a bang up job compared to our traditional private and public colleges. We’re still reeling from the misdeeds of AIG and Wall Street, BP Oil, Massey Coal, JP Morgan and Haliburton and they are just a few of the corporations that have inflicted terrible losses on families across America after capturing regulatory agencies, corrupting public officials, and flouting the law. Power and greed politics always ruin good ideas.

We’ve been in a rut of high unemployment, low demand and unmanageable mortgage debt, and while Republicans push in the wrong direction on monetary policy (that is, for tightening), Obama has failed to talk about monetary policy at all, or to advocate for a nominee to the Federal Reserve. The Dollar is at its lowest rate in years, and the fundamental driver of the US economy – the housing market – appears to be undone. Well respected investors like Warren Buffet and George Soros, as well as Intellectual Property expert Dr. David Martin, are beginning to warn of a coming economic collapse. Unlike his first term, Obama will push for truly bold housing reforms – such as mortgage modifications – that would help Americans climb out from under mortgage overhangs and start consuming again. The eventual expiration of the Bush tax cuts will make it possible to put together a revenue-raising deal to pay for new programs while still allowing Republicans to say they never agreed to raise taxes.

Although, Barack Obama has actually been tighter with a buck than any United States president since Dwight D. Eisenhower according to Marketwatch; he will open the pocketbook of the government in a last gasp effort to avoid economic instability. Over 22 million Americans are unemployed so he will establish a temporary 21st century version of the WPA public jobs program to ease the plight of those hardest hit by the employment crisis, a much larger commitment to public investment in infrastructure. Obama will use Pew Research and other surveys which show that 71 percent of voters, including a majority of Republicans, Democrats, and Independents, support putting unemployed people back to work at government-funded public service jobs and 66 percent of voters say that improving the nation’s infrastructure is important. This may all be part of Obama’s boost in government stimulus spending of at least $1 trillion. For existing businesses, his plan will cut in half the taxes paid by businesses on their first $5 million in payroll, and completely eliminate payroll taxes for adding new workers or increasing the wages of their current workers.

The global financial crisis emanated from the US, pushed by ideologues largely from the US. This crisis raises fundamental questions about globalization, which was supposed to help diffuse risk. Instead, it has enabled America’s failures to spread around the world, like a contagious disease. There is growing anger at the level of inequality (the so-called 1% who control much of the wealth, for example), corporate greed, lack of jobs, etc.Although these protests received some media attention (albeit negative), many protests had begun decades ago in the developing world with barely a mention. The uncomfortable truth is that democracy and free markets are incompatible. The whole point of democratic government is that it uses the legitimacy of the democratic mandate to diffuse power throughout society rather than allow it to accum Obama will be forced to deal with this growing unrest.

So, will the past 12 year march to folly continue? Will we keep borrowing 43 cents of every dollar the government spends? Will we keep printing billions of dollars every year, out of thin air that makes it very hard for the ordinary man–with little knowledge of finance–to determine whether the outlook of the nation is good or bad; at least as long as our creditors don’t object? And here’s the most important part ,eventually, this is all going to end, but that could be a decade or more in the future with some other president.

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