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US Oligarchy is Kicking Ass

Political overview

One of the classic battles in every country is between the rich oligarchy and the people. In some countries like China, even though there is lots of corruption and pollution, the middle class is growing and they have a government surplus.  In the US the oligarchy is clearly winning & the middle class shrinking and the debt growing. The new administration has made little difference.

  • The military industrial complex oligarchy is growing even as Afghanistan (Obama’s "necessary" war) has, like Iraq, become an unpopular war (poll numbers well below 50%).
  • The big shadow bank oligarchy is winning. They don’t have to mark their profits to market, have received huge bailouts, still take exorbitant salaries, & no serious methods of regulation have been introduced to regulate them. Little hometown banks getting toasted.
  • Small American business, the middle class, and medicare recipient can not compete with other countries or maintain anything resembling the same lifestyle if health care costs rise another 100%. (see past Updates)
  • Massive debt built up by past Republican administrations is now being added to by Obama as he stimulates to keep us from falling into another great depression. The oligarchy used to pay a far greater share of this debt – now YOU (mom and pop) do.

Stocks

Everything hinges around the jobs number today .  The back ended stimulus program is working. Some private sources are showing the stimulus creating 500k to 700k jobs.  But these are temporary and in a year or two will run out.  The oligarchy in the big companies that are recovering will hire cheaper labor abroad. (see above)  One big added incentive is they will NOT have to pay growing health care costs if they hire foreign workers from Europe to China.

Markets have been reacting poorly to good news so there is a lot of temporary downside risk possible with today’s announcement.

The good news for markets is Obama will probably cave in on the public option in his speech on Wednesday.  This means the insurance oligarchy has won . Big US companies will not be impacted because they will hire abroad. Small business will get hurt because of the increased cost of heath care.  But most of these small companies are NOT on the major US stock exchanges.

This is perhaps the last chance to fix Health Care in the US.  It’s 16% of GDP and growing. Far less in all other other countries. Economically its hard to see Americans climb out of the growing hole – health care, energy dependence and debt along with an unregulated oligarchy have a strangle hold on government. However, it is plausible to see stock prices increase, because globalized (larger) American companies will hire abroad and make new profits from emerging markets.

All this doesn’t happen overnight, but continues to be the direction we are heading.

Barr

PS – You’d think after the oligarchy’s greed and corruption became so transparent after the shadow bank meltdown last September there would be some larger cry for change.

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