obama will lose in 2012

OfTwoMinds | 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.