I’ve been kind of an observer of the stock market for quite some time now. I participated in it, either directly or inderectly, with my own funds for some 10+ years before I tried to get as far out of it as you can while still having money invested in money markets. So, during the last two weeks or so, as the DOW has moved from around 6500 to close to 7500 (I think it got there before it made a slight “retreat”) it has been interesting to read the comments from those who are imbedded in the investment business. It is no surprise to me that they are on the edge of their seats hoping and waiting for evidence that the economy has “turned around.” And, of course, they will measure whether or not the economy has turned around by the numbers generated by the different market averages. I, for one, don’t trust that to be the measure that will really tell when the economy is on the mend. I watched for the eight years of the Bush administration as the market moved higher and higher – while the wages of the middle class were stagnant at best, and by some measures moving lower – and wondered what do these market averages really tell us anyway?

I think, and hope, that dramatic changes lie ahead for our economy. To me, the idea that the stock market is the measure of the health of our economy is the rationale that leads us to measure Christmas by the profits made at Macy’s, Nordstroms, etc. I really hope that we can find a more people-friendly way to measure the health of our nation – and it seems we measure the nation’s health by looking at certain economic “indicators” defined by Wall Street. I believe that some of the statistics that we have grown accustomed to – translate into either confidence or a lack thereof which effects the willingness of Americans to spend their money – and who defines what statistics are important? I think it’s Wall Street. And, the spending – and saving – habits of Americans seem more to be at the root of our nation’s economic health. It seems quite obvious to me that we were living beyond our means in many ways – but that a small percentage of our population was taking a way of life for granted that is more un-sustainable than those of us in the middle of the middle class. Maybe the statistics which would really show the strength of the economy would be aimed at the health of the middle class (or Main Street) instead of the health of Wall Street.

Watching the stock market “move 10%” in the past 10 days or so, in my mind, only threatens to lite the same fire under the “money changers” on Wall Street that got us into this mess in the first place. I try to imagine myself as someone with a large amount of disposable income who might have purchased a million shares of Citi at $1 and sold it a week later at $3.50. I suppose if I was able to do that I would be in a very celebratory mood, but it makes me think that I’m hoping we don’t go back to the “same old, same old” as a way out of this mess. The end result of that, to me, would be more of what got us into this initially and would just mean that we will re-live this experience again, probably in the not too distant future. I’m pretty much expecting the market to take some more heavy drops – and soon – but I don’t pretend to understand how it works. (if you can’t tell, I don’t want to go back to what got us here as the solution to our problems) The other day I heard people talking about how much money has been “lost” in the past couple of years – but the thought came to my mind that – as the stock market is selling off, the money is going somewhere – it’s not like it’s totally disappearing. It seems to me that it just means that those of us who put our money in money markets and differing stock funds are the ones who lose (like the teachers I work with who claim their retirement accounts have dropped as much as 40-50%) – while the people who gamble every day probably are the ones who pulled billions out and are sitting on the “sidelines” waiting for the right time to put it back in. My point is that in my mind the money that got pulled out has to be somewhere – again, I don’t understand how this works, but it just feels like there is a lot of money just sitting somewhere waiting for the “right time” to “jump back in” and continue the get rich quick mentality of the previous few decades (my remembrance of the stock market when I was young – 60’s and 70’s – was that investments in the market were intended to be long term – a matter of years and not days.

This is the mentality that has brought us the banking failures of the past year and, worse to me, the government “bailouts” of the very people who have made bad judgements and have been overcome by greed. Now, the idea of these bailouts are totally on the watch of George Bush, Henry Paulsen, and Ben Bernanke. I mean Bernanke has been throwing money at the problem as if there is an unlimited amount just sitting around waiting for the opportunity to get into circulation. This not only has the hair on my back standing on end, I believe it is finally reaching fever pitch with the public in general. In my mind the AIG “bonuses” put many Americans “over the top.” (I’m still wondering where all this anger was when it was announced at the first of the year that other Wall Street recipients of taxpayer funds had paid out bonuses in the amount totalling 18.5 Billion dollars – including 3.5 Billion to Merrill Lynch executives to reward them for leading this stalwart American corporation into bankruptcy!) What I’m trying to get to here is my fear of where this might be leading us – as a nation.

I realize that Rush Limbaugh and the Republicans are rooting for President Obama to “fail” and I believe this bailout program might be their secret way of doing just that. Now, don’t get me wrong, I believe that Obama is making some very significant, if not huge, mistakes during the infancy of his presidency. This shouldn’t be too surprising to anyone, because the “mess” that was “left behind” by the Bush administration was about as close to impossible a mess as you could leave someone, if it wasn’t impossible. If for no other reason than if Obama is perceived to be failing we could get another dose of Republicans – I REALLY WANT PRESIDENT OBAMA TO SUCCEED! So, I’m going to tell you where I think he’s going wrong – even though some of what I will say will sound like a broken record if you’ve spent any time at all on this site – but, unfortunately, it’s beginning to feel like some of my biggest fears are coming true.

President Obama’s first, and possibly biggest, mistake is trying to work with the Republicans. While, in theory, that is a wonderful idea – IT IS IN THE PROCESS OF BLOWING UP IN HIS FACE. I would be OK with the strategy, if there was a parallel strategy of uncovering all the wrongdoing of the Bush administration that was proceeding forthwith – not at a snale’s pace, but a full agressive investigation of all their shenanigans – which would include the bailout of Wall Street – especially, the bailout of AIG – which seems to have been a totally unregulated gift from Henry Paulsen, via Ben Bernanke, George Bush, and very possibly Tim Geithner (ugh!! – that will be bad for Obama) – a gift that very possibly has an indirect effect on many of the recipients of the so-called TARP money, giving them a double “bonus.” Everyone knows about the torture, the illegal wiretapping, the rendition, the lying us into a war, the outing of a CIA agent by the Vice President of the United States, the corrupting of our Justice Department for political gain, and the destruction of our economy – What is a bit of a mystery is the connection Hank Paulsen had with the people who received about a trillion dollars in the dying days of the Bush administration – ALL OF THIS NEEDS TO BE AGRESSIVELY INVESTIGATED!

And I will tell you how things are going to transpire. If Obama doesn’t change his stance and move toward the investigations of the Bush administration, he is going to find himself on the defensive very soon. The stark reality for President Obama is that he doesn’t have the luxury of a bunch of blind followers who will approve of every decision he makes like Bush had for the first six years of his presidency. People are already questioning the competency of Tim Geithner. All I know about him is that he was head of the New York “Fed” when the TARP bailout was designed and when AIG was declared by Henry Paulsen to be “too big to fail.” Well, when the AIG money is investigated I believe we are going to find out that there was a lot of “benefits” going to “friends” of Paulsen and possibly (I hope not) Geithner. This is not going to look good, or go over very well with “Joe Sixpack.” If Geithner’s involved in this and Obama continues with his present “tact” all eyes will soon be pointed right at him – and it will be too late to do the investigations I’ve been calling for for months now. People are very angry about what is going on. Unfortunately, it appears that Obama is continuing the policies of Bush regarding these failed banks. Just last week it was announced by Bernanke that he’s “throwing” another TRILLION dollars at the mess on Wall Street saying “whatever it takes.”

These guys are causing General Motors to reinvent itself in order to get about $30 billion – including huge “givebacks” by the United Auto Workers – and they’re throwing money at Wall Street as if we can’t get along without them (and, unfortunately, as each day passes President Obama is gaining more and more ownership in the mess he inherited – because of his lack of will to punish those who created it in the first place). I honestly don’t know what those peolpe do that is so important that we couldn’t have just let them get the consequence they deserved a long time ago – which was bankruptcy. I’m sensing that in the long run we’ll discover it would have been much cheaper and more effective to have let them fail – and then come in with the trillions that the Fed seemed to have lying around in order to reconstitute these companies without all the multi-million dollar “risk managers” who have failed so miserably – FOR ALL OF US! For some reason President Obama’s administration has adopted the “They’re too big to fail” approach to this problem just like his predecessor and it almost appears as if all of his economic advisors come from the very environment that is at the heart of this problem – Wall Street. He is going to have to make some HARD DECISIONS – he needs to totally separate himself and his administration from the people who caused this (even if Geithner and Larry Summers have to “go”) and I so hope he succeeds. However, I’m feeling that he’s falling into a trap set for him by some very cagey Republicans – and the thought of them “coming back” makes me sick to my stomach (I’ll say it again, can you imagine John McCain and Sarah Palin in charge of this mess – and all the other things Obama is dealing with?). So my message to the President is: President Obama, put the Republicans on the defensive via agressive investigations, and make a clean break from the policies of Bush/Paulsen et al!