Why Is Obama Failing?

"What's costing the president are three things: a laissez faire style of leadership that appears weak and removed to everyday Americans, a failure to articulate and defend any coherent ideological position on virtually anything, and a widespread perception that he cares more about special interests like bank, credit card, oil and coal, and health and pharmaceutical companies than he does about the people they are shafting." Drew Westen, Leadership Obama Style

I think it is more that last of the three than anything else, and explains the others. Obama is captive to special interests, as are many of the key members of the Congress, and the Obama Administration, and the Federal Reserve. And I should add his two predecessors.

It explains why he cannot articulate a coherent ideological position and make it stick. Make no mistake, he is a smart and verbally adept individual, a gifted person intellectually. But he cannot adhere to principles because he has abandoned whatever principles he may have had to serve a variety of corrupting interests. And he appears laissez faire and distant because he is a figurehead, a household servant, and not in control.

What makes Obama a greater failure than either Bush or Clinton is that he was elected on the promise of reform, a promised change, a political renewal in a country sickened by the erosion if not betrayal of its republic by men who view the Constitution as 'just a goddam piece of paper.'

"Somehow the president has managed to turn a base of new and progressive voters he himself energized like no one else could in 2008 into the likely stay-at-home voters of 2010, souring an entire generation of young people to the political process. It isn't hard for them to see that the winners seem to be the same no matter who the voters select (Wall Street, big oil, big Pharma, the insurance industry). In fact, the president's leadership style, combined with the Democratic Congress's penchant for making its sausage in public and producing new and usually more tasteless recipes every day, has had a very high toll far from the left: smack in the center of the political spectrum.

What's costing the president and courting danger for Democrats in 2010 isn't a question of left or right, because the president has accomplished the remarkable feat of both demoralizing the base and completely turning off voters in the center. If this were an ideological issue, that would not be the case. He would be holding either the middle or the left, not losing both."

The American people and what passes for their thought leaders in a captive media and a craven academy are a significant part of the problem. Rather than engaging in serious critical thought, most political reactions are cartoon-like, an emotional and visceral red vs. blue mentality that is so painfully evident in their Sunday morning television programs, that is more appropriate to the elementary school playing fields than serious political discussion or the work of running a country. What is held out as the alternative to Obama by the opposition? A brainless Bimbette, or some other servile hack of the machine, who in turn will serve the special interests of the corporations all too well, but will give a different portion of the voting public a sense of 'victory' as their slavery is made complete.

"The government consists of a gang of men exactly like you and me. They have no special talent for the business of government; they have only a talent for getting and holding office. Their principal device to that end is to search out groups who pant and pine for something they can't get and to promise to give it to them. In other words, government is a broker in pillage, and every election is sort of an advance auction sale of stolen goods." H. L. Mencken

Mencken is of course directionally correct, but I am not so cynical as he was. The American people had done better in conducting an idealistic revolution and the founding of a republic, and tempered it with the blood of patriots. And so it was the light of the world. And they can do better than this again.

The Bernanke Fed

As the maestro, Greenspan, was ultimately shown to be greatly mistaken, perhaps even a fraud, so eventually Ben Bernanke also will be shown to be cut from the same cloth, with less verbal acuity. His approach to the US banking system is naive, as one might expect from an eager student with little or no practical experience.

"Mr. Bernanke, an academic who has never worked a single day in his life. He will take anything off a cliff: a business, a McDonald's stand, the Federal Reserve. And I have to say I have a certain sympathy for him as a character. He's ok, but completely useless. I would not even hire him as my butler...Mr Bernanke is a madman, a destroyer of the value of money. And he is a wealth destroyer and an economic criminal. It is the duty of a central bank to keep the value of money. I believe today for ninety percent of Americans life is harder than it was in 1999. Basically I think they are a bunch of crooks."
Marc Faber on King World News

"There is no room for ambiguity in this story. Bernanke was at the Fed since the fall of 2002. (He had a brief stint in 2005 as chair of President Bush’s Council of Economic Advisors.) At a point when at least some economists recognized the housing bubble and began to warn of the damage that would result from its collapse, Bernanke insisted that everything was fine and that nothing should be done to rein in the bubble."
Bernanke and the Corruption of Washington Culture - Dean Baker

SP 500 Futures Daily Chart

The VIX (volatility index) fell to 20.39 today which is near the lows for the year, signaling a complacency in the US equity markets, although the bulls would call it 'the new norm' which is a euphemism for 'all is well again.'

Today the market drifted upwards in light volumes as the risk trade was sold (treasuries, precious metals) although stocks struggled to hold their early gains, and remained in the big rangebound trade from early November.

This is a holiday shortened week, subject to portfolio adjustments and some profit taking, which causes cross currents, but often with an upward bias as the tape gets painted into the year end and the Other People's Money crowd take their bonuses.

We are playing these markets now by holding lightly hedged longs (about 1/6 position) in the metals and miners which we picked up around 1120 gold on average, after the 'sell signal' which we issued here at 1215.

Now we stand pat on all investments and wait for something to break out one way or the other. The dollar is reaching the technical levels we are looking for on a bounce, and now we will see what it is made of.

Markets are being shoved around by the big traders. Do not overtrade in response.

Christmas 2009

They were a boy and girl. Yellow, meagre, ragged, scowling, wolfish; but prostrate, too, in their humility. Where graceful youth should have filled their features out, and touched them with its freshest tints, a stale and shrivelled hand, like that of age, had pinched, and twisted them, and pulled them into shreds. Where angels might have sat enthroned, devils lurked, and glared out menacing. No change, no degradation, no perversion of humanity, in any grade, through all the mysteries of wonderful creation, has monsters half so horrible and dread.

Scrooge started back, appalled. Having them shown to him in this way, he tried to say they were fine children, but the words choked themselves, rather than be parties to a lie of such enormous magnitude.

``Spirit! are they yours?'' Scrooge could say no more.

``They are Man's,'' said the Spirit, looking down upon them. ``And they cling to me, appealing from their fathers."

"This boy is Ignorance. This girl is Want. Beware them both, and all of their degree, but most of all beware this boy, for on his brow I see that written which is Doom, unless the writing be erased. Deny it!'' cried the Spirit, stretching out its hand towards the City. ``Slander those who tell it ye! Admit it for your false purposes, and make it worse! And await the end!''

``Have they no refuge or resource?'' cried Scrooge.

``Are there no prisons?'' said the Spirit, turning on him for the last time with his own words. ``Are there no workhouses?''

The bell struck twelve.

Scrooge looked about him for the Ghost, and saw it not. As the last stroke ceased to vibrate, he remembered the prediction of old Jacob Marley, and lifting up his eyes, beheld a solemn Phantom, draped and hooded, coming, like a mist along the ground, towards him.

Charles Dickens, A Christmas Carol

“Earth provides enough to satisfy every man's need, but not every man's greed." Mohandas K. Ghandi