Words and Music

From out of the shadows
She walks like a dream
Makes me feel crazy
Makes me feel so mean
--John Cafferty & The Beaver Brown Band

Needed to take a brief time out from a personal 'fast market' for a quick missive. President Obama spoke to a joint session of Congress last nite. I usually don't listen to political speeches as talk is cheap, but I figured that the proposals floated during this speech would be pretty expensive.

Early in the speech the President said (paraphrased) that he wasn't a supporter of big government. I suppose he should have defined what he meant by 'big,' because the rest of the talk centered on the necessity of historic levels of U.S. government control over near and long term economic issues that will require $trillions in funding. In particular, his remarks focused on the 'essential' role of government in creating jobs, re-engineering energy and healthcare markets, and reviving credit markets.

The merits of specific programs have been and will continue to be debated.

But keep in mind the core problem. We're broke. We binged on credit for decades to artificially boost our lifestyle. Those debts are coming due. The natural market reaction to such a situation is to begin saving and pay down debt. Indeed, that is what is happening.

Bureaucrats don't want this. They think that we can spend our way out of debt with money that we don't have. They want to breathe life back into credit markets so that more borrowing and consumption can be done.

If, instead of being wowed by eloquent rhetoric and oratory skill, you engage your brain and reasoning power, then the sheer folly of the strategy articulated last nite should become painfully apparent. You should also gain a sense for the huge risk we're taking by seeking to borrow ever more from future generations in order to reclaim an artificially inflated present lifestyle.

Our current situation, where an administration criticizes others for making ill-advised leveraged bets while at the same time suggesting courses of action that will take leverage up to unprecedented levels, will not be lost on those who appreciate irony.