OK, I admit this: I am an unabashed social liberal. I believe in Universal Health Care and Government Sponsored Education up to and including the Bachelor’s level. While some may say this is an inconsistent position, I am both anti-death penalty (except for Crimes Against Humanity) and Pro-Choice; and I strongly believe in the right of workers to form unions. I also adhere to certain Libertarian principles of social order, such as the government staying the hell out of my bedroom and the rest of my personal life, this is also consistent with my position on the right of individuals to have a relationship called a marriage regardless of sexual orientation. I also strongly support the Second Amendment (I’ll do another post later on down the road as to why I do). I am also a great believer in balanced budgets at every level of Government and low taxes (or preferably NO taxes, but that too is for another post down the line). It’s bad enough my political views are both on the left and the right, but the one thing I could always count on was the rules of Economics being relatively consistent.
I honestly don’t know what to believe anymore, because it seems that everything I learned in Eco 101 in college has been thrown out the window. The baby has been thrown out the window along with the water, the bathtub, and the plumbing fixtures…hell, the tiles and the medicine cabinet as well. We have monolithic Financial Institutions failing, the Auto Industry is under siege, and we are in a transition of Governments where the incoming Administration is powerless to do anything while the current Administration refuses to do something. The peaceful transition of government has not been in this much peril since Hoover left Roosevelt a nice plate of steaming dung and told him to make a wonderful meal out of it.
Over the past two days, President Elect Obama has rolled out his Economic Team; and they look like they’ll do a fine job for several reasons. One, a lot of them are young (like the Treasury Secretary Designate, Obama, and me…all 47); two, a lot of them have a great deal of experience…which counts for something. I know how Wall Street thinks being a Vice President at JP Morgan Chase many moons ago, and Wall Street likes trust and familiarity. The current Economic Team Designates are all familiar in one way or another to the Street, and that’s a good thing. Despite calls for radical financial reform and a new cast of characters, what you are getting is a cast of characters that is new to their positions and reform that will build slowly over time. The very Liberal among you need to understand these last few points, because the Market has responded accordingly; the best two-day rally since 1987 happened this past Friday and Monday. I want change as much as the next guy, but sometimes you need to take smaller steps to get there and when it comes to financial change, you need to walk on eggshells.
The last drastic reform of an Economy happened in 1917 with the Russian Revolution…and we all know how that turned out.
“Power properly understood is nothing but the ability to achieve purpose. It is the strength required to bring about social, political and economic change.” – Martin Luther King, Jr.