What’s going on right now is perhaps the biggest case of “I told you so” in the
past half-decade, and it’s far too relevant to ignore.
Before Barack Obama was ever elected president I wrote that he was not equipped for the office. As a junior senator and former community organizer, he simply didn’t have the working knowledge of an enterprising private sector required to make an economy work. The man had never run anything in his life.
So when Obama moved into the White House and Democrats gainedcontrol in both houses of Congress, I knew it was going to be a long four years. Here was perhaps the most left-leaning administration ever, coupled with probably the most liberal Congress since the New Deal — not exactly a great mix when the economy was in the toilet and businesses were struggling to stay afloat.
But I gave them a chance. Week after week, month after month I watched things develop. I weighed in here and there on little tweaks that ought to have been made to keep
the recovery going.
After all, I, like the rest of the global business community, was looking for sustainability.
Not surprisingly my warnings — like those of the entire private sector — went unheeded. While Obama and Nancy Pelosi campaigned for Obamacare and cap and trade, no changes were made in policy to allow the struggling economic recovery to maintain itself.
Now, as predicted, we’re starting to see things stall; and as with most major changes in economic circumstances — especially within an industrial economy, which the U.S. is, like it or not — it all starts with steel. A recent article in The Wall Street Journal points out that steelmakers are now bracing for problems, and many are closing plants.
What’s really startling about this development is that just six months ago U.S. automakers literally couldn’t get any more steel from their distributors, because the distributorscouldn’t
get any more from their mills. There was, it seemed, a real shortage in steel — which is a great sign in any industrial economy.
Now it’s clear that there has always been a shortage — of intelligence in Washington. The past several years have made it abundantly clear that most of our so-called “leaders” in Washington, D.C., are absolutely incompetent. Many literally don’t have a clue; they couldn’t run a dishwasher, let alone an economy.
All I can do at this point is pray that, come January, Mitt Romney can provide some real leadership.
At this point I can safely guarantee that Obama won’t win re-election.
He simply can’t get the economy moving quickly enough to lower unemployment and raise GDP growth before November. But until then, we’re stuck.
Thankfully, this is likely a short-term setback; the long-term, post-Obama prospects still remain very bright for the U.S. economy. Another Journal article recently showcased a surging number of companies lining up to issue bonds so they can lock in interest rates as low as they’ve been in a half-century or more.
With the money they accumulate from issuing bonds, many of those companies will (hopefully) finance expansion projects, just as I’ve predicted. Their rush has been to lock in low rates before they begin creeping back up and borrowing becomes more expensive.
What businesses have been waiting for — and they are now finding — has been some kind of certainty. Right now, they’re becoming increasingly certain that Obama won’t win a second term, and that the outlook for business in this country will improve.
As more businesses and investors become certain of that the market — and the economy — will begin to move in the right direction.
Dock David Treece is a partner with Treece Investment Advisory Corp (www. TreeceInvestments.com) and is licensed with FINRA through Treece Financial Services Corp. He provides expert content to numerous media outlets. The above information is the express opinion of Dock David Treece and should not be construed as investment advice or used without outside verification.
