What the "do nothing" Obama is up against - from the left and right

I wonder if this black man was trying for conciliation, a meeting at the level of "mind", with the mindless.  Silly fellow.

This news from the NYTimes today will of course not concern those folks with larger stakes in the market, large pension fund holdings and those generally who have it "made in the shade."

However, the small investor will, if he/she is capable of any honesty at all, recognize that Obama's work with people in the market is designed to maintain value in the market, not presenting challenges that would devalue it.  He ran on a reform - not anti-capitalist - platform.

But of course there are those anti-market forces who will play both ends against the middle, planning on benefitting from their savings invested in the market, while having NOTHING to say about that market's workings.  A sleight of hand in the style of Mandrake the Magician, or the common hypocrite.

In Striking Shift, Small Investors Flee Stock Market

By GRAHAM BOWLEY

"Renewed economic uncertainty is testing Americans' generation-long love affair with the stock market.

Investors withdrew a staggering $33.12 billion from domestic stock market mutual funds in the first seven months of this year, according to the Investment Company Institute, the mutual fund industry trade group. Now many are choosing investments they deem safer, like bonds.

If that pace continues, more money will be pulled out of these mutual funds in 2010 than in any year since the 1980s, with the exception of 2008, when the global financial crisis peaked.

Small investors are "losing their appetite for risk," a Credit Suisse analyst, Doug Cliggott, said in a report to investors on Friday.

One of the phenomena of the last several decades has been the rise of the individual investor. As Americans have become more responsible for their own retirement, they have poured money into stocks with such faith that half of the country's households now own shares directly or through mutual funds, which are by far the most popular way Americans invest in stocks. So the turnabout is striking.

So is the timing. After past recessions, ordinary investors have typically regained their enthusiasm for stocks, hoping to profit as the economy recovered. This time, even as corporate earnings have improved, Americans have become more guarded with their investments.

"At this stage in the economic cycle, $10 to $20 billion would normally be flowing into domestic equity funds" rather than the billions that are flowing out, said Brian K. Reid, chief economist of the investment institute. He added, "This is very unusual."

The notion that stocks tend to be safe and profitable investments over time seems to have been dented in much the same way that a decline in home values and in job stability the last few years has altered Americans' sense of financial security."

Or a plain, ordinary, goddam liar.

The NYTimes' Paul Krugman today:

August 22, 2010

Now That's Rich

By PAUL KRUGMAN

We need to pinch pennies these days. Don't you know we have a budget deficit? For months that has been the word from Republicans and conservative Democrats, who have rejected every suggestion that we do more to avoid deep cuts in public services and help the ailing economy.

But these same politicians are eager to cut checks averaging $3 million each to the richest 120,000 people in the country.

What - you haven't heard about this proposal? Actually, you have: I'm talking about demands that we make all of the Bush tax cuts, not just those for the middle class, permanent.

Some background: Back in 2001, when the first set of Bush tax cuts was rammed through Congress, the legislation was written with a peculiar provision - namely, that the whole thing would expire, with tax rates reverting to 2000 levels, on the last day of 2010.

Why the cutoff date? In part, it was used to disguise the fiscal irresponsibility of the tax cuts: lopping off that last year reduced the headline cost of the cuts, because such costs are normally calculated over a 10-year period. It also allowed the Bush administration to pass the tax cuts using reconciliation - yes, the same procedure that Republicans denounced when it was used to enact health reform - while sidestepping rules designed to prevent the use of that procedure to increase long-run budget deficits.

Obviously, the idea was to go back at a later date and make those tax cuts permanent. But things didn't go according to plan. And now the witching hour is upon us.

So what's the choice now? The Obama administration wants to preserve those parts of the original tax cuts that mainly benefit the middle class - which is an expensive proposition in its own right - but to let those provisions benefiting only people with very high incomes expire on schedule. Republicans, with support from some conservative Democrats, want to keep the whole thing."

Summing up, Krugman writes:

"No, this has nothing to do with sound economic policy. Instead, as I said, it's about a dysfunctional and corrupt political culture, in which Congress won't take action to revive the economy, pleads poverty when it comes to protecting the jobs of schoolteachers and firefighters, but declares cost no object when it comes to sparing the already wealthy even the slightest financial inconvenience.

So far, the Obama administration is standing firm against this outrage. Let's hope that it prevails in its fight. Otherwise, it will be hard not to lose all faith in America's future."