Abudance, In Between The Lines: Week of November 8

November 15, 2010

Major market indices rose last week, surpassing previous two-year highs. The DJIA gained 2.93%, the S&P 500 added 3.60%, and the Nasdaq climbed 2.85%. Value stocks outperformed growth stocks. And the small cap index leapt 4.73%. The 10-Treasury yield lost eight basis points on the week, closing at 2.54%.
If life is a stage, then last week deserves rave reviews. If for nothing more than that rare combination of quality and quantity.
QE2. Talk of currency wars. Sparky Anderson’s death. The Giants winning the World Series.
Tuesday saw Democrats suffer their biggest defeat since 1938. Republicans took control of the House by winning 60 seats, 21 more than needed. They also picked up at least six seats in the Senate, but failed to regain control.
Many saw the day as a no-confidence vote on the administrations’ handling of economic matters, as well as an overreach of government control into citizens’ lives. Many democrats saw the day as an electoral spasm against a still-poor economy. Either way, budget deficits loom large, QE2 puts the economy into uncharted waters, and jobs are not going to be created on a whim and a prayer.
Republicans will say that, counter intuitively, it was a good thing that the GOP did not win the Senate, so providing an easy fall guy on which to pin ongoing economic woes as the administration mounts its 2012 campaign.
Conversely, Democrats revel in having held onto the upper chamber, with Harry Reid surviving a precarious election and receiving the respite of yet another term.
It was a sign of the times that so many libertarians were on the ballot. And many others ran—and won, on the GOP ticket. While gleaning scant media attention, this underscores that Americans are fed up with never-ending partisan bickering, and the inability (and/or lack of will) to accomplish lasting change.
We are all aware of the caustic, yet symbiotic relationship between the two major parties. And it is evident that the only real loser is the electorate. With politicians from both parties seemingly off the very grids they legislate when it comes to healthcare, finances and power.
No, many of the Tea Party candidates were not qualified to hold the offices for which they ran. But, it was invigorating to see candidates who had no problems excoriating both parties for their lack of production. The nation was not founded on political parties. It was founded on political principals. And both parties have oft proven a lack thereof. The sooner D.C. returns to this realization, the sooner we can begin to tackle the gigantic icebergs approaching the bow of S.S. America.
Let’s begin with the tax cuts.
“My goal is to make sure that we don’t have a huge spike in taxes for middle-class families,” President Obama recently said. The will is there to meet in the middle. It won’t be perfect. It never is. But progress is always marred by imperfection. If desired by the American electorate, good for the nation, and capable of being achieved, then call it progress. A step forward. And worth working towards.
If we can extend General Motors a tax cut valued prospectively at $45 billion, I think we can extend one to the very tax payers who loaned GM the money in the first place (see more on this in E.M.R below).
Following the tax-cut extensions, perhaps we can tackle our floundering foreign affairs, bloated balance sheet and free lunch mentality.
But first, baby steps. Before Daniel could step into the ring to conquer his enemies and slay his demons, Mr. Miyagi taught him to wax on, wax off. So too must we start small, keep it simple, find middle ground. Perhaps then, our supposed leadership will be ready to achieve lasting change. For a change. Stay tuned…

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