If you are an investor with a liberal bent (i.e. a species formally known as a moderate Republican) and if you are paying attention to our friends at MSNBC, their rhetoric might lead you to believe we are on the verge of an economic disaster. This will begin March 1, if nothing is done to avert “The Dreaded Sequester” (session 5). This will be due to the current and potential future impasse between Congress and the White House over the automatic spending cuts scheduled to go into effect on that date.
This fear and dread are due in no small part to President Obama’s campaign to drum fear and trepidation into the electorate, so that they might exert pressure on their Congressmen and women to get on the stick—Do Something! Avoid this mess. This is politics and government dysfunction at its best (or worst). It is also drumming up fear that might affect your investment process.
Listening to the MSNBC crew you might get a different perspective. Chris Mathews was having a conniption fit about it. Rachel Maddow, yesterday, called it “one of a series of self inflicted economic crisis”. Salon.com’s, Joan Walsh said ,“We are in big trouble” and E. J. Dionne commented ,“ We are taking a whole lot of money out of the economy (6/10ths of 1% of spending?) when we should be juicing” ( I think that was the word he used)” the economy”.
They are right, this is stupid, dysfunctional and probably bad policy; but again, it is not the end of the world. As a moderating factor, I would point out that the United States has the best government money can buy. When the buyers in defense and other areas whose oxen have been gored start calling in their I.O.Us, I would imagine modifications will be made.
There are many who swear by the value of divided government, because divided government has much difficulty getting anything done…things that may do more harm than good. Those who subscribe to this thought process must feel like they have died and gone to heaven right about now. Importantly, the market appears to be getting use to these frequent outbursts of stupidity… these “self inflicted crisis”.
Finally we are an equal opportunity disparager of the media. Our session 2 takes aim at the right (Fox and Friends) and the constant fear and trepidation that has been their hallmark since to first election of President Obama. Please don’t be offended, whatever your persuasion. This blog is all about a rational approach to the market vs. a sometimes very disconcerting media backdrop. It is not about political ideology.
Your comments and questions are welcomed.
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