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Some Not So Bold Predictions for 2009

Following the financial market debacle of 2008 most people over age 21 (that are voters with either a direct or indirect interest in the domestic stock markets....which means almost everyone) may wonder what may be in store for them in 2009. The list below details the carnage in the stock markets:

2008: The year in markets:

Dow Jones Industrial Average -34%
S&P 500 -38%
Nasdaq -40%
Dow Jones Financials -55%

The bad news is that private sector wealth decreased by approximately 40% in 2008. The good news is that this reduction in private wealth is essentially non partisan. In other words, we are all in this together. It's an equal opportunity recession.....except for government employees and the beneficiaries of "special" government support.

Congress already has an automatic pay raise dialed into the current budget. The UAW is angling to preserve, via the TARP bailout, the indefensible job security and benefit payments that most of the private sector had to jettison years ago. The viability of government pension plans, which are primarily defined benefit plans, is totally disconnected from the success or failure of private sector enterprises (i.e. the stock markets and small businesses), which are the very entities that pay for these government pensions and benefits through taxes.

Every dollar of wealth in our economy is created by the private sector. While government may be a conduit for spending that wealth and income (infrastructure spending, entitlement programs, defense), the dollars it spends are derived exclusively from taxes on private sector profits and wealth.

Let that reality sink in: every dollar of all local, state, and federal government (agency/entity/cabinet/GSE, (think FNMA), or tax subsidy) expenditure is a dollar that has its origin in the profit or accumulated wealth of the private sector. All of the businesses and individuals that create these profits and pay those taxes have lost significant value in 2008. Many of these same businesses, in fact most of them, are shedding employees and reducing expenses. The question every taxpayer should ask is: will my local, state and federal government reduce their budget and expenditures this year? Will they cut back on pension and benefit promises just as the private sector has been forced to do?

Historically, the federal government has not volunteered to take the bitter medicine that the private sector has had forced upon it by economic reality. However, the sudden and steep losses of the past year (the worst in eighty years) may cause Congress to pause in its spending gluttony and force president elect Obama to change some promises he made during the 2008 campaign. The sharp losses experienced may also cause voters to demand some accountability for the first time in a long time.

My not so bold predictions for 2009/2010 are:

1) If Congress passes any tax increase in 2009 the Democrats will lose net seats in the 2010 interim election.

2) If Congress allows the Big 2.5 auto makers any additional funds from TARP in 2009 the Democrats will lose net seats in 2010.

3) If Congress keeps its pay increase scheduled for 2009 it will have the same effect as the House check cashing/ post office scandal from the early 1990's.

4) Chris Dodd is toast. Already. He's in even bigger trouble if Congress chooses to really investigate the mortgage debacle and the Friends of Anthony Mozilo.

5) Charlie Rangel is toast. Already.

6) If Congress formally investigates the SEC and Chris Cox the body count will include far more Democrats than Republicans.

What will a President Obama do during the next two years?

That's a far more complicated question because he may find his hands tied by foreign policy challenges that continue to unfold faster than David Axelrod can formulate responses. Collapsing energy prices will change the negotiating dynamic with oligarchs from Russia to Iran. A resolute Israeli response to terrorists such as Hamas may change the calculus of forty years of Middle East foreign policy.

Obama may find that dealing with desperate foreign nations (such as Russia and Iran, both currently becoming insolvent by the day with crude oil at $40 per barrel) requires not the nuance and finesse that his sycophant far left base so worships. Instead, the president elect may find himself in a street fight that has only one solution that delivers to Americans their demand for safety and security: the projection of U S military force in strategic actions not unlike the policies of President Bush and Vice President Cheney.

Irony may be the operative word in describing U S foreign policy in 2009, but comedic farce will be the theme of the Democrat Congress this year.


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Comments (15)

What's really funny about 3... (Below threshold)

What's really funny about 3) is congress not only voted a pay increase for themselves, but they voted down a pay increase for judges.

"If Congress formally inves... (Below threshold)
Mike:

"If Congress formally investigates the SEC and Chris Cox the body count will include far more Democrats than Republicans." (presumably including Dodd and Rangel)

I'm not so sure if this will be possible, considering that Congress has a significant Democrat majority. Remember Enron? As soon as Democrat complicity in the Enron scandal was established, the Democrat majority in the Senate effectively shut the Enron investigation down.

Likewise, Reid and Pelosi aren't going to do anything that might cost Democrats majority control. The only hope of forcing an investigation would be external pressure, but it is unlikely that the press will do anything to unseat their Democrat allies in Congress.

I think our best hope is through conservative blogs and talk radio, keeping the pressure on and reminding folks that the present government has no intention of ever doing with less -- and if they want to change this they need to "throw the bums out," so to speak.

We can also remind people of the prosperity of the 90's when we had a Democrat in the White House and Republicans holding the line on spending in Congress.

We may not win back Congress in '10, but we might be able to put enough pressure on the Democrats to keep them from doing much else that is really expensive and stupid.

I think you're right on the money, though, with your prediction that people will be paying more attention to government spending now that their own financial security has been so seriously damaged.

Bold Predictions: The econo... (Below threshold)

Bold Predictions: The economy won't fully recover in 2009. Democrats will loose some seats in Congress in 2010. The economy will recover before 2012. Obama will defeat Sarah Palin to be re-elected, the Senate will have a slight Republican majority, the House will be almost evenly divided. With an ailing global economy, international military conflicts will be frequent, but modest in scale. In 2016 the Jindal/Sanford ticket will defeat the democrats and usher in a new era of Reaganesque conservatism.

Be patient conservatives, and work hard. Happy New Year!
http://www.rightklik.net/

MikeI agree, parti... (Below threshold)

Mike

I agree, particularly on the ENRON example.

However, the confluence of events surrounding the mortgage mess has a new ingredient that no one anticipated (and I didn't mention it because I'm still working on it): the Madoff ponzi scheme.

This disaster has already invited Congress' attention because so many notable and well known people lost so much.

The question is, as always, do the Republicans have the stones to really open up the investigation and make it a political issue?

PREDICTION AND MESSAGE TO E... (Below threshold)
Ted:

PREDICTION AND MESSAGE TO EVERY MEMBER OF CONGRESS:

When counting the electoral votes, either Congress finds by 1/8/09 that Obama, not being an Article II "natural born citizen", fails to qualify as President whereupon Biden becomes the full fledged President under 3 USC 19 (free to pick his own VP such as Hillary) or thereafter defers to the Supreme Court to enjoin Obama's inauguration with Biden becoming only Acting President under the 20th Amendment until a new President is duly determined.

The preferable choice, at least for the Democrats, should seem obvious.

Ted. Give it up. You and ... (Below threshold)

Ted. Give it up. You and your "Nirther" buddies are wrong.

IF Congress investigates A... (Below threshold)
retired military:

IF Congress investigates ANYTHING you can bet that no democrat will be found guilty of ANYTHING.

well said Ret. Mil. you hit... (Below threshold)
1903A3:

well said Ret. Mil. you hit the nail right on the head. the dems so sound like my grandsons,he did,not me,i didnt do anything. in short,children.

"However, the sudden and... (Below threshold)
wolfwalker:

"However, the sudden and steep losses of the past year (the worst in eighty years) may cause Congress to pause in its spending gluttony and force president elect Obama to change some promises he made during the 2008 campaign."

Liberals cut government spending? Wow, talk about your wild-eyed optimism...

Campaign slogan for 2010:</... (Below threshold)
Mike G in Corvallis:

Campaign slogan for 2010:

Vote Republican -
Congress needs adult supervision


In order to pay for Obama's... (Below threshold)
hermie:

In order to pay for Obama's massive road building program (aka Chicago Pork projects), the gas tax will be raised to $3.00 per gallon. Democrats will state that the money will be to combat 'climate change', and the Obama spokespersons will state that the people were already used to prices of over $4.00 a gallon, so this tax will 'stabilize' gas prices from 'dangerous' rises and dips.

hermie: can you find a quot... (Below threshold)
hyperbolist:

hermie: can you find a quote from a single economist arguing against an increase in the gas tax?

Whatever happened to the economic sage of Wizbang, Jayson Javitz? I enjoyed reading about how the economy was not in the tank and that any perception to the contrary was merely the drive-by media trying to turn the electorate even further away from the Republican party.

Also:Jeese Jackson... (Below threshold)
Pretzel Logic:

Also:

Jeese Jackson Jr.s career is over and (hopefully) so is Rahm Emanuels.

I've been wondering about J... (Below threshold)
max:

I've been wondering about Jayson myself, hb. I could use one of his soothing posts right now.

<a href="http://apnews.mywa... (Below threshold)
retired military:

http://apnews.myway.com/article/20090103/D95FLO9O0.html

"French President Nicolas Sarkozy is visiting the region next week, and President George W. Bush and U.N. chief Ban Ki-moon both spoke in favor of an internationally monitored truce."

My not so bold prediction is that if Israel accepts this type of truce that Hamas will set up rocket launchers right next to the UN camps just like they did last time. This truly truly is laughable to even consider.




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