Predicting that Obama will be a one-term president is easy: Americans vote their pocketbooks.

[A note to the reader: This article would have more weight if the Republicans could find some credible candidate to run in 2012. The danger to the country is that Obama gets re-elected and then misunderstands the meaning of that.]

There is nothing remotely ideological or personal in my prediction that President Obama will lose the 2012 election. Both parties are equally out of touch with reality in my view, and both suppport the same things: a global Empire, an increasingly intrusive Savior State, a shadow banking system which is no longer under the control of State institutions (rather, the banks control the institutions), and various crony-capitalist cartels which fund political campaigns and partner with the Central State’s bloated, unaccountable fiefdoms. The only visible difference between the two parties is slight variations in the relative growth rates of the most-favored cartels and fiefdoms.

President Obama seems like a nice guy. Many people said the same thing about George W. Bush. While a likeable personality is a plus in a media-obsessed society, American elections boil down to this: Americans vote their pocketbook, and their pocketbooks will be a lot lighter by November 2012.

President Obama has several key flaws which have doomed his presidency.

1. His leadership style is one of consensus and compromise. This works OK in a caretaker setting in which there are no crises and no demands for bold changes of course. Unfortunately, this era is defined by structural crises, and a leadership based on gaining consensus and compromise is basically a rudderless one in this environment.
2. He does not understand economics or finance, nor is he secure about making decisions on financial topics. As a result he deferred to the “experts,” who just happened to be Wall Street cronies and insiders who easily swayed the President with their hobgoblin stories of financial meltdown and ruin if we didn’t “save the banking sector from losses.”
3. His grasp of history is poor. The same can be said of most presidents, but Obama failed to grasp the historic opportunity to set a new sustainable course for the nation’s banking and financial sectors, and thus for its economy. He opted instead to save and protect the corrupt and embezzlement-based banking sector from losses, and he continues to do so with “extend and pretend” policies.

   In a similar fashion, he has allowed the National Security State and the Global Empire to expand without any limitations.

4. He has no visible core beliefs beyond a vague sense that the Federal government and its extension, the American Empire, are forces for good. His policies can be boiled down to: support and expand the Savior State and its many fiefdoms, support and expand the Global Empire and National Security State, and allow the banking system and its Power Elites to set the agenda and control the oversight agencies and institutions.

His signature accomplishment, the “Obama-care reform” of the nation’s sickcare system, simply extends the power of existing cartels and fiefdoms and delivers an ever-larger slice of the national income to their coffers. In its basic parameters, the “reform” could easily have been supported and passed by socially liberal Republican presidents such as Richard Nixon. There is nothing remotely progressive or radical about “pooling” insurance cartels and wet-paper-bag bureaucratic tests of “the most effective treatments.”

These are simply technocratic layers added to a bloated, corrupt, venal and destructive system that already costs twice as much as those of our advanced-economy competitors.

In addition to these flaws, he has made fatal policy errors which doom the economy to implosion by November 2012

All of his administration’s policies can be distilled down to these three points:

1. The banking sector is the most important foundation of the economy. The Central State and its proxy, the Federal Reserve, pumped some $14 trillion (by some measures, $23 trillion) in cash, credit, guarantees and backstops into the banking sector and its cloaked twin, the Shadow banking System.

   Meanwhile, little to nothing was done for the cash-strapped consumer or citizenry. Why?

2. The “problem” is lack of credit and “confidence.” If the State and Fed flood the banking system with credit and “restore confidence” by goosing the stock market, then people will start borrowing and spending again, and everything will be “fixed.”

   This presumes demand is strong, and all that’s needed is credit for people to satisfy their thirst for more goods and services.

   Meanwhile, back in reality, people realized they didn’t need a third car, fourth TV, 17th “cute blouse,” 23rd pair of shoes, etc., and now that their home is worth less than their mortgage (or their remaining equity is minimal), they can’t really afford the luxury travel, boats, etc. they enjoyed when they thought their house would keep rising in value forever and tapping that rising equity was painless.

   Demand is slack because everyone who could afford more crap already owns more crap than they need or even want. The percentage of the populace who would like more stuff cannot afford more stuff. Their household incomes and wages are declining, and their expenses for essentials are rising.

   The Fed’s largesse to banks (free money in unlimited quantities) doesn’t reach them; all it does is boost assets held by the top 10%.

3. Boosting the assets of this top 10% (or 20% if you include those who have equity of some sort beyond the $2,500 in their IRA) will cause a “wealth effect” that will “trickle down” to the lower 80% as the top 20% buy more Coach handbags, enjoy fine dining at tony upscale restaurants, etc.

   Unfortunately, this may help boost Coach’s profit margins, but the vast majority of the “trickle-down” consists of low-paying retail clerks and busboys.

   In other words, the “wealth effect” is bogus, a charade deployed to defend the pillaging of the economy via financialization and Fed intervention.

4. Pushing the dollar lower in a “beggar thy neighbor” currency war is the best way to boost the U.S. economy. Apparently no one in the President’s team looked at financial history to identify the nations which grew rich and powerful by debasing their currency.

   In a perverse blowback to this misguided policy, corporate profits earned overseas were certainly goosed, but so were import prices, one of the reasons (along with the Fed’s easy-money quantitative easing) for rising costs to consumers.

If you set out to design a policy that impoverished 80% of the citizenry and channeled a larger share of the national income to the top 10%, then this is precisely the set of policies you would pursue.

Nothing important has been fixed; nothing important has even been addressed. The institutions of governance are captured and corraled by the monied Elites to the point that the government has lost control of its own institutions, which now rule as quasi-independent fiefdoms. The citizenry, bought off on the cheap by stale Bread (rapacious student loans, food stamps which offer the veneer of normalcy, extended unemployment benefits so no angry mobs form, etc.) and dazed and distracted by the Media Circus, keep quiet in their complicity, while the Power Elites revel in the freedoms offered by a caretaker Administration.

If President Obama had fought for fundamental structural reforms and lost, he would still have support. Yes, Congress holds the pursestrings, but let’s not forget the President appoints his own staff and advisors, and wields great power via Executive Orders. He could have submitted a 5-page Financial Reform Bill and promised to veto anything else. If the Power Elites watered it down, then he could have vetoed it and gone directly to the public. But he did none of these things.

Courtesy of correspondent George B., here is a chart of public and private debt over the past decade, from the St. Louis Federal Reserve. Notice that all the Administration and Congress have done is boost Federal debt to replace the “missing” private debt (missing because incomes are declining, housing equity has crashed and the consumer overborrowed for a decade).

This is mindless Keynesian policy on auto-pilot. As I have reported before, the Federal Government is borrowing and spending some $6 trillion in a mere four years, almost doubling the nation’s debt, and all that’s been accomplished is the Power Elites’ share of the national income has risen and GDP has flatlined.

The structural dislocations and imbalances remain firmly in place; a financial sector dependent on fraud has been “saved,” and an economy sick with an addiction to rampant financialization has been given plenty of smack to keep it from going through a desperately needed withdrawal.

The Keynesians have no answer as to when the economy will “recover” without the Central State borrowing 11% of GDP every year to prop up its various cartels and fiefdoms. They have no answer because they have no understanding of the imbalances, the fraud, the financialization or of the feudal partnership of the State and crony-capitalist cartels.

Obama has lost his “progressive” base, because he’s done nothing remotely progressive. He has lost the middle because his Administration has overseen their gradual impoverishment at the hands of Financial Power Elites. He has offered them phony facsimiles of reform slicked down with the tiresome “soaring rhetoric” of a con artist so besotted with his own story that he actually believes the BS himself.

He can count on the public-union vote and a few of the State fiefdoms he’s enriched and enlarged at the expense of the common good, but as the addict (the economy) goes downhill, slowly destroyed by the ever-larger doses of smack administered by the Fed and the Central State, then the consent of the governed will be irrevocably lost–not just by President Obama, but by the entire Status Quo.

The President is now a candidate hoping to scoop up a cool $1 billion to blow on another long, greasy media blitz, but I would be surprised if he rakes in much from the commoners and serfs straining to keep the wheels of their household finances turning. He will of course collect big bucks from various crony-cartels and contractors who have benefited from his bogus “reforms” and unstinting support of the banking sector, but his true-believer supporters will be thinned down to a few Elites, die-hard Democratic hacks and the delusional by mid-2012.

His opponents may fare little better unless they are willing to tackle the dominance of crony cartels, government fiefdoms and Financial Power Elites whose fat fingers remain firmly on the throat of the fast-expiring nation.

Posted by Gypsy Chief

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Last Week

Candy Crowley won the Sunday talk show competition by having Dr. E. Fuller Torrey and Dr. Lisa Dixon on to discuss the state of mental illness in America. She won, in my opinion, because this was the most adult thoughtful and timely material to air in that time slot.

She Did It Again

What is it about Candy Crowley that I like so much? If you listen carefully to the interview with Gen. Colin Powell you will find that she asks a question and waits for the answer. Why is this so unusual? I think many of the cable news hosts are so in love with the sound of their own voice that they just have to help the guest answer. Chris Matthews [MSNBC] is the worst in my opinion. It is very annoying to watch him interview. Candy is refreshing in contrast. Then there is the choice of guests. I’m not all that interested in whatever lame duck lonesome Joe [I-CT] has to say. Colin Powell is a better get. Also on SOTU this week were two former presential advisors Michael Gerson and Paul Begala. Remarkable in this segment – neither was snarky. That fits our policy to be a snark free zone

Richard Norton Smith

This week marked the 50th anniversary of two best known presidential speeches. JFK’s inaguration and IKE’s farewell. Richard Norton Smith remarks are as good as any. President Eisenhower’s warning about the military industrial complex should be top of mind as the country considers recommendations of the Catfood Commission.

Posted by Gypsy Chief

Sarah Releases New Book

Book Summary

America. American flag, boy scout, patriotism, freedom, patriots. Betsy Ross, Old Ironsides, Tea Party. Obesity. Barbara Bush, obesity, parents, Washington elite, parents, obesity, flag. Random vacuous thoughts, United Nations, defense. Reverend Wright, Chicago, real Americans, Mount Rushmore, flag, patriots, guns. Gun control. Fence. Fourteen foot high fence, borders. Patriots, FOX News, McCain. Republicans. Earmarks, earmarks, deficit, deficit under control, Washington elites, news. Lamestream media, Hillary Clinton, flag, Geraldine Ferraro, Iran, nuclear, arms control. Treaty, Iran, flag, more random vacuous thoughts. Catchy catch phrases. Willow, Trig, moose, wolves, helicopters. Washington insiders. Money, Republicans, gun control, Tea Party Patriots, election, looking forward, Michelle Obama, first lady, Hillary Clinton, Barbara Bush, looking ahead. 2012 election. Karl Rove, obesity

REVIEW

Ghost writer.

We have been very busy here at the Gypsy Chief Blog so we didn’t have time to actually read the book. Not to worry, Saint Sarah didn’t have time to write it either. So we are on an equal footing with her. Instead, we used a handy little C program we found in The Waite Group’s Turbo C Bible to summarize the book. It is easy if you have access to a C compiler. First, gather a list of random thoughts and catchy catch phrases. See above for examples. Feel free to substitute yours. Then assign a numeral to each one. Next you use the rand() function from the Standard C Library to write / review the book. The Mersenne twister would definitely be overkill for anything this author (ghost writer?) would come up with.

Posted by Gypsy Chief

Assisted by The GNUinator

The Insanity Offense

The Insanity Offense: How America’s Failure to Treat the Seriously Mentally Ill Endangers Its Citizens by E. Fuller Torrey. The book was featured on Book TV

Torrey has written frequently on this topic. The book opens with a description of the Lanterman-Petris-Short Act (LPS). This is a state law in California which had the effect of vastly reducing the patient population in state mental hospitals. The author says that LPS came from an unholy alliance of liberal activists concerned with folks being railroaded into mental hospitals against their will and conservative activists who believed that there is no such thing as mental illness.

Ronald Reagan as governor of California promised that mentally ill patients would be moved from state hospitals to community based treatment facilities. Funds were never provided so that this could happen. Instead, many mentally ill patients became homeless where they then became a huge problem for local police departments.

Torrey continues in this vein documenting what he calls the effect of LPS in California and similar ideas in other states. He recounts examples of mentally ill people who killed because they heard voices telling them to. These cases sound like the plot line of a Criminal Minds television show.

One of the most spectacular examples recounted is the Virginia Tech shooter. Torrey says that privacy laws prevent information sharing so that mentally ill people may go out and buy firearms which make their rampages just that much more deadly.

Torrey continues the book with another topic. That is Anosognosia which is impaired awareness of illness. See treatment advocacy center for a description. Mental illness has a legal definition and a clinical definition. In the legal sphere mentally ill persons are presumed to be competent to decide if they want to take their medications. See the story for more on this. Torrey says that the public is at risk because mentally ill persons frequently decide not to take their medications and then commit violent crimes as a result.

For public policy the question is who should be allowed to purchase firearms. Of course, if you believe there is no such thing as mental illness then anyone should be allowed to acquire weapons. I think this is an extreme position. Is the country destined to suffer more and more mass shootings by mentally ill people who exercised their Second Amendment rights? This is why “The Insanity Offense” is book of the week.

Posted by Gypsy Chief

California primary voters go to the polls on Tuesday, June 8 to pick their party’s candidates. Republicans will choose Carly Fiorina, Tom Campbell, or Chuck DeVore. for their US Senate candidate. Late polling suggests that Fiorina, former CEO of Hewlett-Packard, will be the nominee to run against incumbant Senator Barbara Boxer.

The following is from an L.A. Times story by Seema Mehta. Money and Anger Dominate California’s … Contests

Pushing forward

Near Sacramento, a confident Fiorina rallied her troops in the Senate race, thanking them for bypassing the beautiful weather to call voters on her behalf.

“With your help, we’ll be having a hell of a party on Tuesday night,” she said, flashing two thumbs up to about 30 volunteers gathered at a recreation center in Gold River.

Speaking to reporters, she criticized Boxer’s positions on national security, terrorism and immigration. “Her policies are part of what’s driving this state into bankruptcy,” Fiorina said.

Fierce battles ahead

With their lineup unofficially set, top-of-the-ticket Democrats and their allies in organized labor were also gearing up Saturday for a bruising general election battle against opponents with unprecedented amounts of personal money to spend.

With the battles brewing, “Boxer and Brown both realize they have real contests and are not going to wait,” according to Jack Pitney a Claremont McKenna College government professor and former national GOP official.

“For all practical purposes, the general election campaign has already started,” said Dan Schnur, head of the Jesse M. Unruh Institute of Politics at USC. “It doesn’t look like many people on either side are going to be taking summer vacations.”

Boxer proved that Saturday. After touring a new $13.5-million aircraft rescue and firefighting facility at Los Angeles International Airport that was funded mostly by federal stimulus money, the senator lashed out at Fiorina. She let fly a host of criticisms: Fiorina laid off tens of thousands of workers and shipped jobs overseas as head of Hewlett-Packard; she failed to vote for much of her life; she opposes abortion rights and supports offshore drilling – the opposite of most Californians’ views – and would allow people on the no-fly terrorism watch list to purchase handguns. See our previous article about Carly’s failure to vote.

“This is the clearest choice in the nation,” Boxer said. “She is so out of step with California voters.”

mailto: seema.mehta@latimes.com

Times staff writers Robin Abcarian, Cathleen Decker, Shane Goldmacher and Maeve Reston contributed to this report.

Copyright © 2010, The Los Angeles Times

Photo Credit: Wikipedia

Posted by Gypsy Chief