Stock Market Leads the Way
As I write this the stock market is up nearly 200 points, and it has risen in each of the last three months. Commodity prices are rising based on encouraging manufacturing data from abroad. Personal incomes rose 0.5% in April. Chrysler could exit bankruptcy as soon as Monday. Citigroup and GM are removed from the Dow Jones Industrial Average, replaced by powerhouse Cisco and Travelers. Ford motor’s shares rose 4.9% on news that it plans to expand production in the third quarter to try to gain market share from its rivals, and without government money.
The Stimulus Flop
Less than 10% of the $780 billion stimulus package has been spent. President Obama told us we desperately needed or we may be mired in this recession/depression for years . The free marketers said that this economy is strong enough to recover on its own, which the statists sneered at. Government created this mess by their meddling in the housing market and how they mishandled interest rates and the money supply but we were told that “only government” can get us out of it. More recently President Obama, who has been trying to spend every dime Congress will let him get his hands on has said we are out of money. Here’s a thought: repeal the rest of the stimulus and get out of the way of the strongest economy on earth.
Things to Ponder
- Obama opposed bankruptcy for GM and Chrysler. Free marketers said it should be allowed to happen. That’s how the free market works. After pouring billions of taxpayer dollars into these two, where are we? Both are in bankruptcy.
- Bankruptcy for GM and Chrysler would be an extraordinarily long and drawn out process costing millions of jobs and killing the auto industry in the U.S. Where are we? Chrysler may emerge from bankruptcy as early as Monday, Ford is ramping up for the third quarter.
- Without the stimulus package, we were told the unemployment rate could hit 9% by 2Q2010, whereas with the stimulus it will peak at 8% at the 3Q2009. Where are we? It is now at 8.6% and we are in 2Q2009. The stimulus passed, little has been spent and the administration has been wrong again. The free marketers say that unemployment will likely rise quickly and if left alone, the recovery will happen more quickly. If the government meddles and tinkers, we will likely see what happened in the 1930s where this drags on for years.
- President Obama says we’re out of money. So stop spending. Repeal the stimulus that is accomplishing nothing because the bulk of the spending isn’t due to happen for another year or more.
- Watching the Information Technology job boards, I see a big rise in the job postings for sales people. When companies are confident that the economy is turning, they step on the gas for sales to beat the competition. The operational folks will soon follow.
If the Obama administration is not careful and doesn’t reverse course before he bankrupts us, we may be faced with accelerating inflation and sky high interest rates. Shall we get nostalgic for the days of Jimmy Carter?
