RAHN: Raising stock prices

Thankfully, Somebody finally had the guts to say it. One of the main reasons the market and the economy are going down the tubes is OBAMA. You promise to raise taxes on the investor class (kill bush tax cuts), to raise the cost of utilities (carbon taxes & ban on drilling and nuclear), to increase the cost of employees (increase minimum wage, mandate benefits, increase social security)and decapitalized business (take over 401K's) the market is going to react because business and investors are going to react. I stopped a scheduled increase into my 401k, an automatic monthly investment and I will reduce charitable giving. Add to that I have curtailed all but necessary spending. I HAD TO the above because when the Bush tax cuts expire I am looking at an additional tax bill of between $500 and $600 a MONTH. I am also figuring a doubling of my utility bills...That double whammy will eat up every spare sent I now have plus my entire food budget ...because I make way less than $250 thou a year and I can not absorb that increase without drastic action starting now.

Yes, MARKETS ANTICIPATE. Face it folks: the real reason the markets are tanking [and it is really not that surprising] is that they are anticipating the obama presidency [or are we not allowed to say this?]. We had all the talk of GWB being in bed with business, and markets did great; now we are facing a virtual socialist. What would you expect???

LOL...this article and comments demonstrate a complete lack of knowledge of how the market works. it is simply silly to think the market would move higher if Pres. Obama announced he would cut capital gains or dividend taxes. The market is moving lower because corporate earnings and forcasts are coming in lower. Most of that is from the problems in the credit markets. If the credit markets were reacting to tax rates why are Muni Bond prices severely depressed? It's simple, they're not. Mr. Rahn is asking for things human beings and gov'ts can't supply, certainty in what there actions will be in an uncertain world. This is just ridiculous.

Congratulations to Mr. Rahn for this "On the Money" assessment of our government's chaotic, ad hoc, incompetent, and self-serving response to various crises.

In response to kc's projecting his/her own ignorance on to Mr. Rahn, I repeat my comments of yesterday to Tella's article: Everything that Mr. Rahn says is true, and that is only a token of the misunderstanding about, not only this crisis, but other crises--and boom times. He does leave out much about the non-commercial/market variables and other factors that are always at work dynamically but unseen by even most of the "experts," whether economists, bankers, corporate officers, politicians, et alia. The greatest factor in ANY market, whether free, totally controlled, or anywhere in between, is the mindset/mood of the majority of the populace involved in the economic/market system in question. If the vast majority of such a population remains vigorously optimistic, not only about the marketplace itself, but simply about life, it is almost impossible for the economy to decline. In order to grasp this, to perceive it at all, one has to have the broadest of perspectives of history, and follow all of the dynamics of a society. Very few people are ever capable of such observation and vision. It takes one such as Alexis de Tocqueville to perceive the broad sweep of a society, and he was a genuine singularity, as it is an even greater rarity for one to be able to view a society, other than his own, so broadly yet deeply. O, I can imagine the rantings that my little comments here will produce, from the very "experts" who think that economics and the marketplace can be analyzed, understood, and predicted as free-standing "sciences," not to mention those who simply do not want to think deeply, and so are threatened by the notion that all things, including their pocketbooks, are so interconnected. Of course I am not really addressing such people here anyway. In truth, I am speaking more rhetorically than anything else, venting I suppose; it is simply excruciatingly annoying to hear all of the partial analysis, hyperbole, and plain old tripe, about something that should never have happened. In this case, this "recession" (which indeed it is becoming, ipso facto), we can thank the negativity that began when the realities of fighting terrorism, and the resulting actions taken by President Bush--and even that moo cow we call Congress--did not produce immediate, exquisitely joyous "success" in the way modern society has come to expect results in everything. Most Americans do not even realise that America would not even exist, had it not been for French intervention very similar to what we are trying to do in Iraq. YES, it was on a much smaller scale, but relative to French resources of the day it was not. Indeed, the "fallout" from the assistance that France offcially provided, not to mention the volunteers who brought expertise and resources of their own to bear, helped to further erode existing French institutions, ultimately leading to the French Revolution. Visit a large library, kc, and other wise armchair experts.

I don't think Obama knows what his policies will be. So we are left to guess that given his liberal record and the grip liberals hold on Congress, we will be in for a large dose of anti-business policies as outlined by Mr. Rahn. Uncertainty is always a driving factor in economic decisions. Risk analysis is all about trying to measure uncertainty. Right now there is a lot of uncertainty. Look at how the bailout is going. Already Democrats are trying to redirect the bailout towards auto manufacturers. So not even the financials can count on what Congress appeared to say (and pass) just a few short weeks ago. For almost two years Democrats talked the economy down. The media joined in and the consumer eventually grew wary and started reducing spending. Was it because of massive layoffs or negative GDP numbers? Not at first, just the uncertainty fed by nightly news and Democrat claims. Then as consumers started to slow spending, business reacted naturally and the GDP numbers started to dip (business spending drops along with dropping sales). Democrats jumped on that and started talking "Great Depression" instead of simply recession. Can this possibly be? Who knows but just in case let's prepare and avoid that new car and other non-essentials. And if kc thinks markets don't react to tax rates, well then I doubt kc buys and sells any stocks. Consumers react to taxes too. I sure would like a new car. I can afford the loan payment now. But what if Obama raises my taxes? I think I'll wait a bit until I know for sure, or have a much better idea just how much I can afford per month.

I agree with RDH's take that Obama does not know what his policies will be; hope and change are all we heard, and these are not policies. I also agree that, "For almost two years Democrats talked the economy down", except that the Democrats have been talking the economy down since the day President Bush first took office. Two months ago, the economy was doing quite well with the exception of the housing market and certain unionized automobile manufacturers, formerly known as the “Big Three”. Everyone else was rolling in cash. But something significant has happened in the last few weeks to cause the precipitous fall of worldwide markets, starting in the USA. What was it? Well, the trigger event was obviously the mortgage meltdown, fabricated by Democrats during the Carter Administration and maintained and enhanced by Democrats in the Clinton administration. At some point the number of unsustainable mortgages that had slowly accumulated for all these years reached critical mass and any shock could have set it off. The upward creeping unemployment rate, the slowing and then the fall of housing prices, and the widely discussed "uncertainty" of a possible Obama presidency all contributed. But "uncertainty" does not tell the story. Obama is a Marxist and every Marxist-orientated government in all history has performed poorly, or worse, or much worse. Obama even declared that "equality" was more important than gross tax receipts, meaning that there will be less money for investment, that we will then be less efficient, that there will be more people out of work, and that there will be more expensive products produced by a less efficient work force. Card-check rules, if enacted, will also raise costs and reduce productivity. Faced with this possibility, what good capitalist would let his investments remain at risk? Few would do so, obviously, and many bailed, leaving pension funds and 401Ks to suffer and decline. And this is before Obama even starts installing Marxist economic measures. FDR, the hero of the Democratic Party, prolonged the Great Depression by nine miserable, heart-sick years, but that was done in ignorance. Obama says he is going to raise taxes and restrict trade, two of FDR's principal disastrous policies, and Obama is doing it deliberately. My horseback estimate is this is going to get much worse before we go back to free-market, rule-of-law economics. Enjoy.

Since "bailout" has become a household name, how about bailing out the average stock investor that has selected certain stocks considered "quality" in which to invest their money for retirement and income generators. As opposed to the traders in the Wall Street financial institutions who day trade, short sell, and all the other schemes to deliberately raise, or more significantly, lower the "market price" to achieve borkerage commissions. Why doesn't Mr. Paulson say he wants to bailout all the people who have lost huge amounts of money in 401k's,and pension funds, and retirement plans by stating that "market prices" are no more than smoke and as of Jan 1 2009, all stock prices will revert back to their price as of Jan 2 2008 and every holder of these stocks will receive a check from the US Treasury making them "whole" again. In return, the Treasury has purchased these equities and will hold them for resale or place them in the Social Security Trust fund as investments. This sounds no different than what they have done for the banks, financial institutions, etc.