Check me out Hosting 2PM show on Fox Business Today

When Peter Barnes broke the Beige Book report on Fox Business yesterday at 2PM, we talked about the "moderate expansion" that seemed to be universal across the nation and even cracked that government regulations were hurting the trucking industry. The Street took notice of higher gas prices and some think it pressured stocks into the close.

For the most part, I think the reason for the market limping out of the session was general angst as the Street braces for a mountain of earnings reports. That's a lot of parsing although the big names will stand out most and establish the tone. Needless to say, this is the biggest test of the market this year, and it's still difficult to figure out what the street wants. I keep hearing the experts talk about underlying fundamentals being strong enough to support a rally. By the same token, the best estimate for GDP growth this year is 3.0%, which doesn't seem like enough to dig the nation out of the hole just as 120,000 jobs a month isn't enough to erase the massive unemployment haunting the country.

I like individual names, and I also don't mind taking advantage of the gimmicks, although I dream of those days when it was all about the stocks and the individual potential and great names didn't watch their share price crumble on the hint the Fed would become a bystander to the economy. It is what it is and that means taking a different approach to investing. It means adjustments, more patience and more leeway for wild gyrations. That said, we need to see lots of good reports and solid guidance. I'll leave it up to the media in its lust to influence the election, to call the data great.

But I'm looking to make people money.

Going Local

The message is being layered on thicker and thicker, and today President Obama goes local with his message of class warfare, and the Buffett Rule hitting local news in four swing states.

I got some interesting feedback yesterday after comparing President Obama's speech at Florida Atlantic University to speeches and writing from Vladimir Lenin and Benito Mussolini. I'm surprised people would want to look the other way and think such comparisons are harsh when indeed the aim was to take power from a small ruling class of rich people and redistribute wealth to the masses. Of course that's the official theory, but it never works out that way, and the hype is nonetheless the same. I've written about this before, especially in comparison to the economic elements of fascism.

For me the most frightening aspect of the speech wasn't that President Obama is looking to forge a new economic model where socialism meets capitalism with heavy government oversight. Everyone has a theory and belief on what works and what doesn't work. No, the scary part about that speech (it was tamped down a little yesterday in front of sympathetic business executives and CEO's) is that it's now out in the open. While his kimono isn't open all the way, President Obama and the left are now selling their agenda not as a true economic policy but as a form of "fairness," or more succinctly, "social justice."

This acknowledges his economic agenda failed, but it failed within the confining restraints of a capitalistic system that is simply rigged. That's why President Obama always mentions rich people aren't paying their fair share legally. Instead of selling clean energy as an economic plan, which is harder and harder to do, it folds into social justice, that is not limited to human beings but to lizards, trees, and an assortment of animals whose existence doesn't even have to be threatened to kill jobs for humans.
But it's pretty clear, President Obama sees an opening and thinks people are willing to vote on an ideology that only promises an expansion of the so-called middle class.

The assumption is the majority of Americans are fine with being lumped in the middle as long as it also means the comeuppance of those rich bastards.

What so many people don't realize is the central target of the tax-the-rich agenda are households making more than $250,000. This could be a husband and wife that met in college, worked their way up the ladder while raising a family and paying off student debt. In fact, when I hear this often repeated-line, over and over, I'm thinking of this successful but far from rich American story:

Are we better off when everybody gets a fair shot and everybody does a fair share and everybody plays by the same set of rules?

That question/statement is loaded with overtures from Voltaire and other European utopian-thinkers. An equal share means to make all tasks worth the same value, taking it out of the hands of the free market and instead to a council not unlike those that would judge monetary outlays for end-of-life medical needs. As for current rules, more often than not, those that don't follow them are the ones earning less money. The irony is this message is aimed at and embraced most by those putting in no share of work, taking no share of risk, and making no sacrifices. As for the fair shot, I'm not sure how that relates to taking money from households earning more than $250,000.

Higher Aspirations

Another line in the speech that disappointed:

This is a make-or-break moment for the middle class and everybody who's aspiring to get into the middle class.

In the America I grew up in, people aspired to be rich, really rich, not this ridiculous number set up by the White House. People knew it would be a long shot but that was a universal aspiration and now we are being told the best we should aspire for is to be in the so-called middle class. Heck, in more and more places in this country $250,000 is lower middle class. Are people listening to this closely? Do people understand what's at stake? The president lumps college in the same sentence as clean energy and unashamedly says he wants to expand investment in the latter while making the former more affordable.

That doesn't mean cheaper tuition but taxpayers taking on more of the burden of paying for college. This is all part of the collectivist creed and its coming out more and more. He hinted that college student tuition should be paid by corporations that hire them because they bring brain power and knowledge. I'm not dissing Florida Atlantic University, but those grads should thank God when they get their first jobs, not just because of the paycheck but because of the real knowledge and experience they will gain. That's what it's all about, doing a job and getting paid for that job.

President Obama said we tried free markets and they don't work. I'm not sure how we became the greatest nation in the world, the richest, strongest, most generous, most intelligent, and most passionate through an economic system that "failed." The system isn't designed to make losers into winners, unless they land a reality television show. The system is designed to have paths for losers, those born of unfortunate circumstance and those that come here off a raft or boat without even knowing the language to become successful.

Field of Dreams

I want people to be rich and if they fall short to have a wonderful, comfortable life that would be the envy of the rest of the world. As for the how the speech was wrapped up, it went back to those tired gimmicks that launched the current presidential term:

It's our turn. It's our turn to rebuild our roads and our bridges and our airports and our ports.

Gosh, please give me a break; hasn't that shovel-ready jobs pitch on us already flimflammed for the first time? Spain poured gobs of money into all that stuff a few years ago and now has 26% unemployment. This isn't a movie, this isn't "Field of Dreams", and we have ports and airports and roads that are being used less and less. We need demand. We need real investments, not government spending. We need people to have unlimited dreams and shouldn't throw up the roadblocks when they hit $250,000 for a household. We need to stop paying college professors at rates that have grown a million times faster than inflation and ask our kids to take tougher courses and put down the weed.

I said this reminds me of Mussolini and indeed it feels like a carbon copy of his version of corporatism. This system allowed for corporations and the profit-motive but at the control of the government. In fact by 1935, three quarters of Italian businesses were under Mussolini's state control. Mussolini was attempting to find a middle ground between capitalism and socialism. He was a former believer in the latter but loathed the former.

"We affirm that the true story of capitalism is now beginning, because capitalism is not a system of oppression only, but is also a selection of values, a coordination of hierarchies, a more amply developed sense of individual responsibility." This was an excerpt from a speech made by Mussolini, on July 21, 1921.

Mussolini loathed the aspect of individualism under capitalism and President Obama has the same resentment. Mussolini riled against the values associated with capitalism much as President Obama has voiced resentment against the profit motive that was greater than what he felt necessary and on occasion openly asked "when is it enough money." In front of 4,500 college kids pushing him on like a blind army, President Obama got caught in the moment and let us take a deeper look at his true feelings. There will be more moments like this as November draws closer.

I'm afraid. If there is a second term all the safeguards established by the framers will be tested and maybe a few successfully ripped down. The best case scenario is businesses fight tooth and nail, buy time while they continue to sit on cash, and stall (real) investments. The worst case scenario is Italy under Mussolini.

Even to this day Italy is suffering from those policies that crushed the notion of competition and individualism. Even to this day Italy produces very few rich people, the Mafia has more cash than its banks and people in the southern part of that country have forgotten how to work.

I appreciate we are learning more about Mr. Obama's dreams, yet I shudder they are what many thought from the very beginning.

The scarier part is there is enough confidence to open it up and show the world.

Today's Session

It was a relief but what's happening is eerily like what happened the last couple of springs. Economic data begins to refute growing conventional wisdom that we've turned the corner. Of course such wisdom has been based on things like "green shoots" which might be hopeful but certainly not the stuff of legendary economic booms. One would think that at some point in time, the economy will rebound naturally and maybe gain momentum.

Until that time comes the Street wants more comments like those from Janet Yellen this morning that the Fed will stay the accommodation course through 2014. Of course the Street waits like Pavlov's dog for the big man to step up to the mike and say "keep the party going."

Economic Data

Core PPI is hotter than expected the trade balance was better but initial jobless claims spiked to 380,000 and that was enough to wipe out that tiny bit of enthusiasm that had carried over from yesterday. Let's not force the issue this morning.

Comments

There can be no long term recovery without addressing our egregious and ever expanding debt. At best we are looking at severe inflation or worse yet, a "Grecian" style economic meltdown with the worst possible scenario being the dethroning of the U.S. dollar as the worlds de facto currency. Keep up the great work. I truly look forward to your daily Wstreet email. Robert Tucker on 4/12/2012 10:17:18 AM

This is off topic but I have talked to several people and their advisors told them if Obama is re-elected they are going to put them in cash. Have you heard anything like this ? Walt Walter Galbraith on 4/12/2012 10:48:27 AM

Mr.Payne, You are so brilliant! Thank you for the time it takes to write these articles for us. Jane on 4/12/2012 2:26:31 PM

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