The intransigence of the GOP righties pushed Obama to accept an increase in the debt
ceiling that runs only into Feb. 2014, and a re-opening of the Gov. for but a limited time.
This partial cave-in by Obama will be a drawback for him going forward with fiscal policy
and will be duly noted by foreign powers the US is currently engaging. For the GOP, they
retain their nasty options for possible use after both houses go to conference and set spending
It reminds me of GOP 1964 presidential candidate Goldwater's comment that "Extremism
in defense of virtue is no vice". The Goldwaterites got creamed back then because the
economy was growing fast, inflation and unemployment were low and liberalism was in its
hey day. Political conservatives make up about 25% of voters now, and are increasingly reaction-
ary in the classic French sense of the term -- hold back the future and bring back the past era.
As pundit Andrew Sullivan (The Dish) recently said "They (conservatives) want their president
white and the budget balanced now". The newer righties are both more militant and sharp at
building a power base.
The weak economic recovery in the wake of a deep recession has stolen US household
confidence, increased impatience with the status quo and is fertile ground for the growth of
both righty reactionary and lefty radical movements. The righties are way ahead now, but
continued subpar economic performance will bring on more interest in the left as well.
The bottom line now is the GOP's rightwing obsession with austerity to slam down gov't.
spending and reduce the budget deficit. Policies of this sort may well backfire in a slow
moving and still well leveraged economy and certainly could punish capital at risk.
That's why capital market players need to be very mindful of the power of the right.
- Peter Richardson
- Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!