Mid-terms Here We Come!!!

Even though I am a business journalist, I just love politics. Since the fall of Bear and Lehman, the interconnectedness of politics and the private sector has never been so tightly wound. Congress comes back on September 14th and its going to be exciting for folks with politic-itis. I read a great article Sunday morning looking at how the Democrats are going to assess how they should tackle the slowly growing economy in order to gain votes.( ci_15995785 )

We had Representative Paul Ryan on Squawk Box last week talking about the joblessness in America and we also spoke about the GOP’s march to take back the House and possibly even the Senate. ( ?video=1581731344&play=1 )

I like speaking with Ryan. He is one of the members in Congress who I think has a handle on what’s going on today. Unlike some of the GOP members who just bash the Democrats for basically being Democrats, Ryan offers compelling reasons on solutions to fix this economy.

I think Americans are tired of the blame game and the childish name calling both sides are guilty of. We want action. Let’s face it, many people are expecting another Uncle Sam bailout but Uncle Sam’s wallet is empty and his credit line is beyond max. Not since 2001, has the US seen its debt-to-GDP ratio double to 66 percent. But the scarier part is some experts are predicting we might be heading toward 100 percent. Many US consumers lived that way a few years ago in the boom-boom days of credit buying homes they couldn’t afford and using their homes as ATM machines draining all the equity out of it. That worked out real well right? So Uncle Sam, if outrageous spending on the American consumers part got us into some of the mess we are in now, does that mean you are made of rubber and the problems of overextension will not hurt you?

Spending is just part of the US economic worries. The jobs picture is still a muted grey. Roubini said at the Annual Ambrosetti Forum in Italy “Conditions in the U.S. labor market are awful…” And U.S. GDP growth might be as low as an annualized 1 percent, which will make “it will feel like recession for most people.”

But the US is just a small part of this global recovery. IMF’s Lipsky says the world economy is moderately recovering but still faces challenges, urging the need for medium-term fiscal consolidation.

It takes courage and intelligence to choose the right fiscal course. Europe is trying to figure out its mess. This week we will hear from the President on how to jump small business and jobs. Let’s hope partisan politics can be put aside and both sides come up a plan that is just about the main goal and no other hidden agendas are put in to make one side look bad if they don’t vote for it. There is no room for pork in an economic recovery plan.

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6 Comments

Filed under Business, cnbc, congressional spending, Jobs, Leadership, Main Street, money, personal finance, politics

6 responses to “Mid-terms Here We Come!!!

  1. The midterm election cycle will once again prove the “It’s the economy, stupid!” statement from Bill Clinton’s 1992 Presidential campaign true. In 2008 and 2010, the economy has been on the minds of voters more than in most years.

    The economy is not well. The consumer is dealing with high unemployment (higher than it was in Nov. 2008), the collapse of the value of real estate and various debt obligations. The consumer is not better off than they were at the last election two years ago.

    Yes, the government and the private sector are interconnected. However, this is not quite how it should be. Free market capitalism produces the greatest economic outcomes of all economic systems. The role of government in a free market economy should be limited. The few policies that government should enact in relation to the free market should ensure that the market system is equipped to be successful without external force.

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    • Totally agree David that the gov’t and private sector should not be connected. As you know, I’m a firm believer in balance and the policies being created in Washington should have a limiting role and help foster innovation and capitalism. Its a shame people get drunk on power and use a crisis to suit their own agendas instead of fixing the crisis. Here’s to democracy and Americans voting!! 🙂

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      • Lori Ann,

        A great example of what we have discussed in the Comments section here is Chile. Chile’s economic history from 1970 to the present is fascinating. From 1970 to 1973, Chile moved on a socialistic path and the economic results were devastating. It was one of the primary causes of the 1973 Coup. Starting in 1973, Chile moved towards a capitalistic economic structure and eventually transitioned into democracy. Since 1973, Chile has been the most prosperous economy in Latin America.

        I just wrote in a paragraph what was an entire term paper in undergrad and a subject also covered in my Latin American Business class at the MBA level. 🙂

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  2. Lori Ann LaRocco

    Great info David! Reminds me of what one of my contacts recently told me. Countries overseas are adopting a more capitalistic approach to business and the US is reverting the other way. The countries who are more “free markets” and less gov’t intervention are fairing better than the US and recovering quicker. And the US well….. We all know.

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  3. I would agree with your contact. The question that needs to be asked is why. Why are these overseas countries adopting a more capitalistic approach? The answer is simple. Capitalism produces the greatest economic outcomes of all economic systems.

    I’m going to revert to the Chilean example because of my familiarity with it. Chilean capitalism has been a long process, nearly 40 years at this point. It produced results in the short term, but it is the long standing commitment to it that has made the country the most prosperous economy in Latin America. Chile is approaching first world status, which would have never happened if they had stayed on the path they took from 1970-1973.

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