Landmines to Avoid in the Obama Administration

• Raising Taxes...Any Taxes: In light of the economic downturn, any action that would lead to less money in American pockets, which would lead to less money in the market, would be a critical mistake the country cannot afford right. This includes the capital gains tax, or any other taxes aimed at corporate executives. Any tax levied on that end will result in an increase in prices, cuts in labor wages and benefits, or even more layoffs. Every cost doled out by lawmakers always finds its way to the consumer, which is the last thing the market needs.

• Overall Increase in Domestic Spending: Leftist members of Congress are practically foaming at the mouth with thoughts of a unified Democratic government. With Bush out of the way, big spenders like Nancy Pelosi (D-CA), Harry Reid (D-NV), Ted Kennedy (D-MA), and David Obey (D-WI) think they will finally have their chance to provide significant increases to the areas that will benefit their "constituents." After years of accusing Bush of being the most fiscally irresponsible President, these geniuses want to turn around and start spending on all the areas they promised voters they would work on back in 2006. How do they plan to pay for it? Tax increases. See the previous point for why this is a bad idea.

• Immediate Withdrawal of Troops from Iraq: To be honest, I know Obama is not so naive to believe he can just yank the troops out in a few months. Despite what Democrats have promised worried loved one, they know the troops can;t just pack up and leave. However, for the ever ridiculous legislators like Dennis Kucinich (D-OH) and John Murtha (D-PA), there will undoubtedly be repeated calls for an immediate withdrawal. If this were to go through, what little credibility the U.S. still has in the international community would fly right out the window. While I still believe Iraq is better off without Saddam Hussein, I also acknowledge the U.S.'s hand in the current train wreck that Iraq has become. If we were to simply pull out and leave them to their own devices, without the slightest mention of a well-thought, carefully planned transition, any further blood shed would still be on our hands.

• Reducing the Size of the Military: I want America out of Iraq just as much as most others, though my reasons are different. Spending in Iraq is what led to the increase in deficit spending, and the sooner we end it, the sooner we can stop send $100 billion over there annually. Unlike President-elect Obama, who is banking on a near 100% "peace dividend," I realize that at best, we can hope for maybe a $50 billion dividend from ending U.S. involvement in Iraq. But $50 billion is better than nothing. We just have to make sure that in the process, we don't forget the returning soldiers. Considering the amount of money that nearly 50% of the Department of Defense's Budget is spent on personnel, the only way to try and achieve a 100% peace dividend would be to bring U.S. military personnel levels back down to the 2001 numbers. At a time when jobs are being cut on a daily basis, unemployment would sky rocket with the infusion of forcibly retired veterans entering the workforce. They went over there and bled for us, I think we owe them more than that.

Latest Bailout Good for Citigroup, Bad for the Country

Regulators produced two sweeping plans to bail out banks in the last couple of months. And both times, stocks bounced up but dropped quickly because investors remained skeptical. The latest plan, which emerged Sunday night, involves the government’s backstopping a portfolio of assets for Citigroup, the financial conglomerate whose stock lost more than half of its value last week. Shares in other banks, like JPMorgan Chase and Bank of America, also lost significant ground. The question, as a new week begins, is whether this plan will produce lasting effects not only for Citigroup but also for the broader stock market.

NYT Article

If at first you don't succeed, why try again? Legislators are looking for that one magic pill that will bring the economy back to life. The problem is, that pill doesn't exists. Even if it did, I am sure it would not be FDA approved. Seriously, how many times will Congress stick its nose into the market, hoping to cure all that ails it, only to find that what they do is, at best, meaningless (and at worst, ultimately detrimental). After announcing the latest bailout for Citigroup, the DOW has jumped up about 300 points this morning. However, as noted above, stocks jumped the last few times, and then went right back down the drain.

Congress needs to learn that there may be nothing it can do to bring the economy back to where it was, at least not right away. The market moves in cycles, just like the weather. Right not, the weather is bad. But rather than try to control the weather, we should just find someplace warm and dry and ride out the storm, planning on what we want to do when the weather is better. Congress should be focusing on ways it can help prepare the nation for better times, like investing in infrastructure and education and looking into possible changes in the tax code.

Congress already passed an "economic stimulus" package as well as a $750 billion bailout bill. Despite both of these bill, the economy has shown no signs of immediate improvement, as Congressional leaders were foolishly hoping it would. The sheer economic ignorance that lawmakers have displayed is terrifying. As a result of their lack of expertise, the U.S. Government is now billion of dollars poorer and no closer to economic recovery that before. It's true that President Bush supported the bailout efforts, but let's face it, President Bush has been a huge disappointment to true conservatives, especially in how high he has allowed the federal deficit to go. Tax cuts are great, but only if they are accompanied by a decrease in spending. Econ 101: If you decrease revenue, you need to decrease outlays. Instead, Bush allowed the continued increase or level spending on domestic affairs, and a sever increase in military spending due to Iraq and Afghanistan.

I can only hope that President-elect Obama, despite his proclivities, will implement a more intelligent fiscal policy. Oddly enough, I am slightly pleased to see the transition team looking to many former members of the Clinton Administration for high ranking positions in the new Administration. Say what you want about Clinton, he knew enough to ride Regan's economic wave for all it was worth, especially before the Dot.com bubble burst. I am hoping that, in light of the economic times, and staggering U.S. debt, President-elect Obama will wisely back away from his ridiculous campaign promises, and focus on fiscal responsibility. This means renewing the 2001-2003 tax cuts, accompanied by a decrease in federal spending. It is also my sincerest hope that Obama can take up efforts abandoned by the Bush Administration to reform entitlement spending.

Brief Post-Election Thoughts

So, I know I have been fairly silent over the last two months, but iis the price I pay for working full time and going to law school. However, I would like to share a few post-election thoughts.

First of all, the election went the way I thought it would, though Obama did win a few more states than I originally predicted. What surprised me was how poor Republicans did in the Senate. Despite his troubles, I honestly believed Saxby Chambliss (R-GA) would get the 50.1% he needed to avoid a December run-off. I also thought Gordon Smith (R-OR) would win in Oregon, and I didn't think Norm Coleman (R-MN) would such a difficult time with Al Franken in Minnesota, but I guess that is because I was unable to take Franken seriously.

Despite his recent conviction on seven counts of making false statements, I expected Ted Stevens (R-AK) to keep his seat, just long enough for the Senate Ethics Committee to expel him from office. Three of these races remain undecided, but I am hoping at least one Republicans holds on, so the Democratic majority does not get the 60 votes necessary to block filibusters. With increased majorities, and control of the White House, if the Senate Republicans cannot filibuster, then the Democrats will be in complete, unopposed control.

While I did not vote for President-elect Obama, he won. As such, once he takes his oath of office, he will be my President. I do not take that distinction lightly. While I may not believe he is the best man for the job, he is going to be leading my country, and he has my support. I pray that he does a great job and that he leads our country through the tough times ahead. I plan to follow this up with a few thoughts on the new Congress and what I expect to come out of the new unified government, but with finals just around the corner, I cannot guarantee I will have time.