How Low Can the Bar Go?

August 8th, 2009

I can’t claim that I ever understood the world of high-finance or what drives the stock market — and now I’m more confused than ever, but I have a theory:

Since President Obama moved into the oval office the national debt has skyrocketed; unemployment is at a record high in many places; there is legislation pending that, by all indications, will eventually bankrupt the government (technically it already qualifies for bankruptcy) as well as the free-market; a judicial activist has just been appointed to the Supreme Court; the government is in the process of spending $3 billion to buy old cars and then, this morning, a story lead in the Washington Post informs me that “Dow and S&P Close at New ’09 Highs.”

Obviously, the current administration’s recession, compounded by its irresponsible behavior, has set the bar so low that bad news, that is not as bad as expected, becomes good news.

Here’s a paragraph from the article:

Investors have been clinging to signs that the economic downturn is easing, and their hopes were stoked Friday by a Labor Department report showing that non-farm payrolls fell by 247,000 in July, compared with a drop of 443,000 in June. The unemployment rate dipped to 9.4 percent from 9.5 percent the previous month. Both figures were far better than many analysts were expecting.

Hey wow! Let’s celebrate! Unemployment has momentarily slipped by 0.1% and only 247,000 people joined the ranks of the unemployed. Well, hold on to your noisemakers and bags of confetti for a while; Obama is promising us that unemployment will “top 10 percent” before it gets better. Personally, I believe the first part, that unemployment will go beyond 10 percent, but I have serious doubts that it will get better, if the current administration and the current Democratic majority have their way.

A perfect example of the reason for my skepticism is this August 7th article from the New York Times that tells how two Senate committees are still busily at work on cap-and-trade legislation that will, if passed, completely devastate the free-market and cause millions of more job losses. Oh, don’t believe me; take it from Joel Kotkin at Forbes in this article or from Daniel Whitten’s article at Bloomberg, both of whom predict very bad things for the economy — and for all of us — if this push for the “Green United States of America” continues.

But for now (a perfect example of how people will bet on anything) the stock market is rallying! But how low can the bar go before reality overwhelms even those high rollers?


Dow and S&P Close at New ’09 Highs, The Washington Post
Boxer, Baucus Headed for Turf War Over Cap-And-Trade Bill, The New York Times
Green Jobs Can’t Save The Economy, Forbes
Climate Bill to Raise Power Costs 20%, EIA Says, Bloomberg

(This article was also posted at My View from the Center.)

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Categories: Economics, News, Politics | Comments (7) | Home

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7 Responses to “How Low Can the Bar Go?”

  1. Tom |

    I’ve noticed the same phenomenon — just going from bad to a little less bad generates gains on the market. I don’t pretend to understand why that would be, but I like it. And who knows, maybe market gains can help lead the recovery, no matter why they happen.

  2. Clarissa |

    “the current administration’s recession, compounded by its irresponsible behavior, has set the bar so low ”

    -Harvey, do you honestly believe that the current situation is the result of the 6 months of Obama’s administration and not of the 8 years of what we had before? It’s not like he started from a clean slate or from a very good place economically, financially, etc. How can anybody expect to repair something that it took 8 years to destroy in such a limited amount of time?

  3. Tom |

    I agree, Clarissa. It’s not accurate to characterize current economic problems as being Obama’s fault, although if he keeps going the way he is now, he may eventually earn the credit. And let’s not forget that the first bailout, all the uncontrolled money that got thrown around, was Bush’s initiative.

    Truth is, presidents get way too much credit or blame for what happens in the economy. They can make things better or worse to some extent, of course, but the system is far to big and complicated to pin it all on presidents.

  4. Clarissa |

    “Truth is, presidents get way too much credit or blame for what happens in the economy. They can make things better or worse to some extent, of course, but the system is far to big and complicated to pin it all on presidents.”

    -As we say in my country, these words are golden. :-)I wish everybody could see it this way.

  5. Brian |

    It would certainly be accurate to paint this as the fault of a runaway house of representatives, both under the republicans from the late 90s up to the current group of irrational idiots under the queen of idiots, Nancy Pelosi.

    All appropriations bills MUST originate in the House of Representatives. Spending in this country starts with the Speaker of the House. What the president wants is largely irrelevant unless he has a fellow-traveler as the Speaker of the House. After all, why appropriate money without an intent to spend it?

    To that end, this is unfortunately far more bi-partisanship than is healthy for this republic.

  6. larry |

    Tis true that POTUS is only part of the process. However as Harvey pointed out Obama seems to have more than enough help in his efforts to give us “Change.”
    The desire to read some hope into the slim gain in the market and the employment figures mean nothing when compared to “Go for broke” spend and tax rampage we are witnessing.
    Say what you want about Bush, he seemed to have some respect for the people. Obama on the other hand is an arrogant in your face parasite. It’s not likely to get any better.

  7. Brian |

    Larry, the best case scenario I can come up with for Bush is a story related by then-congressman Davy Crockett about a constituent of his that showed him the error of his ways.

    I’m just not sure what to make of Bush. He seemed, on an individual level, a sincerely kind man. He inherited an executive problem that had been festering for the better part of 50 years, and I don’t think he was up to it. In ways, I think he made it worse. As if that weren’t bad enough, now we have a president that thinks, apparently, that we haven’t been nosy enough.

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