More Than A Healthy Stock Market?

NewsNM - Yesterday the Labor Department announced that the nation's unemployment rate jumped to 9.6%. In his national address this morning President Obama tried to deflect mounting criticism of his administration's economic polices. President Obama said,“So this Labor Day, we should recommit ourselves to our time-honored values and to this fundamental truth: to heal our economy, we need more than a healthy stock market; we need bustling Main Streets and a growing, thriving middle class.”
We need MORE than a healthy stock market? This seems to infer that we actually have a healthy stock market. We don't. Is a healthy stock market important? It is critical. It was the healthy stock market that produced the ballooning capital gain tax revenues that flooded the Clinton Administration's treasury department. Those revenues allowed Clinton to take credit for balancing the federal budget. Of course when the stock market retreated dramatically the final year of the Clinton presidency, the resulting revenue trough and return to budget imbalance landed in the lap of his successor. Neither Clinton nor Bush ever reigned in the kind of spending increases that kill stock markets. But during his window of time in the spotlight, Clinton enjoyed a "healthy stock market." Is this simple truth forgotten. It would seem so.
If America wants more jobs and prosperity it will have to be accompanied by a healthy stock market. Unfortunately, with national economic confidence incinerated one has to wonder why would the president make the statement, "We need more than a healthy stock market." Was this chide an intentional slap against people with retirement accounts? These folks are praying for a return to decent returns on their holdings. Was it a scoff at retirees living on their investments? Was it a smack at public and private pension funds everywhere that fund monthly checks to beneficiaries out of their investments? Does Washington realize that with the Federal Reserve making sure its monetary policy allows the federal government to borrow trillions of dollars at bargain basement interest rates, that all citizens with savings including the "middle class" are getting hosed? We think not.
Who knows what the thought processes are inside the heads of those composing these canned dumbing down messages that come out of Washington. A few things seem increasingly clear. With no management experience, no business experience, and even precious little political experience in the White House, it looks like investors are going to have to wait a little longer for Washington to differentiate between the trailer and the engine.  



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