Despite persistent insistence of economic improvement, President Obama has lost more than half of his key economic advisers. White House Budget Director Peter Orszag resigned in June. Christina Romer, Chairwoman of the President’s Council of Economic Advisers left in September, and now Larry Summers, Obama’s Chief Economic Adviser has also resigned recently.
The next obvious candidate to resign is Treasury Secretary Timothy Geithner, who is considered brilliant but doesn’t pay his taxes, yet tells America that the government should raise taxes. The fact that Obama hooked him up with the Treasury Secretary job despite Tim cheating on his taxes tells me that Tim will likely stay loyal until Obama is no longer in office. Very few people have a second chance of this magnitude. If Tim does quit, he will get destroyed by the Democrats and the public.
EVEN THE PROTECTOR OF OUR COUNTRY DOESN’T CARE
General James Jones’s resignation as United States National Security Adviser is also a big disappointment. What’s more important than keeping America safe? Yet, what’s more stressful than being America’s National Security Adviser! General Jones always said he’d serve two years, but it hasn’t been two years yet General! So what is it that has caused all these senior Obama staff to job hop like they are highly coveted dotcommers during the boom boom days?
The answer is simply they ALL see the writing on the wall. If you are a long time reader of Financial Samurai, you realize that everything is rational. The reason why you are overweight is because you don’t care what other people think, don’t enjoy exercise so much, and really like food. Hell, it’s the reason why I don’t have a 4-pack anymore. Staying in shape is such a pain in the ass and I love my rib-eye steak too much!
Republicans are clearly going to win the House this mid-term election, and get plenty of further support in the Senate. The officials who have left Obama no longer want to be associated with a failing administration. If the Obama administration had a 80% approval rating with unemployment declining and the economy rocking, do you think any of these advisers would leave after only 20 months? Of course not.
SO WHAT DOES IT ALL MEAN?
The markets have gradually begun to factor in a more balanced government approach for 2011 and beyond. There won’t be any Federal income tax increases on “the rich” in 2011 because the newly elected Republicans in the house won’t let it happen. In fact, there might even be a chance there won’t be Federal income tax increases in 2012 either! As a result, the markets will continue to stay buoyant due to the relief that the government is becoming less anti-business.
Remember back in January, when President Obama declared class warfare and the markets tanked (click link to see chart if not)? Now you understand why it’s important to NOT wage class warfare, and to be inclusive of everybody. It’s important to treat people fairly, including the ones who’ve busted their butts to succeed and so happen to make over $200,000. Look what happens when the markets believe in equality? They rally and make everyone better off.
It makes me sad to see Obama on TV every day, because it reminds us that he is more concerned about campaigning than running the country. When was the last time you saw any President be on TV so much? The clearest solution to the class warfare/taxes debate is to raise the income limit that describes evil people from $200,000 to a much higher limit, say $1,000,000. Nobody will be able to argue with a straight face that their lives will suffer if taxes go up with an income over million bucks.
Feel free to keep taxes just the way they are for the rest of us and introduce some taxation for the 47% of Americans who don’t pay taxes. Just $100 bucks a year on 100 million people who don’t pay anything is an extra $10 billion in revenue. Cut just 10% off the military budget, and that’s a $70-100 billion a year savings. Unemployment at 9.6% is 3% higher than you promised us it would be by now when you first took office. Don’t punish the people who are responsible for hiring other people. If you don’t listen this November, more and more of your staff will leave, until you are left with only campaign advisers running the country. That’s when we all lose.