The Destruction of Wealth

By Mike Myatt, Chief Strategy Officer, N2growth 

I received quite a few emails (more than 200) about Monday’s post entitled “Obama’s Early Report Card.” Most of the comments were in support of my observations and opinions, however there were a few (very few…3 to be exact) dissenting views that took exception to my assertions that President Obama is single-handedly destroying our free market economy and replacing it with Socialism.  President Obama is in way over his head, and I’m not the only one who thinks so…In addition to sharing a few more thoughts on the topic at hand, I’ll also cite other notable opinions on what we’ve witnessed in the few short weeks since President Obama has been in office.

I’m going to completely ignore business and financial logic, as well as complex economic theory, and focus on the simple reality of what is happening in the financial markets every day. The interesting thing about the stock market is that real people, vote with real money, every day… Since election day, the Dow has dropped almost 3,000 points and not that much has changed with regard to the economy other than Barrack Obama and his continued assault on free market capitalism. If you don’t believe me let’s look at just a few (there are many more available) representative examples of what some other’s are saying…

CNBC’s Jim Cramer: On the Today show this morning, Cramer called President Obama’s budget a “radical agenda,” adding, “This is the greatest wealth destruction I’ve seen by a President.”

The Wall Street Journal: In an editorial in today’s paper, the Journal harshly criticizes President Obama’s handling of the economic crisis, writing “As the Dow keeps dropping, the President is running out of people to blame.” The Wall St. Journal also noted that “Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can’t possibly raise enough revenue to fund Mr. Obama’s new spending ambitions.” In the same piece, the Wall St Journal also noted ”after five weeks in office, it’s become clear that Mr. Obama’s policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence — and thus a longer period of recession or subpar growth.”

Google CEO Eric Schmidt: In an interview with Neil Cavuto, Schmidt stated: “I think it’s a bad idea to raise taxes on anyone no matter who they are. This is not a good time to be raising taxes on anybody.” 

Dave Ramsey: Dave has vented on this topic several times, but the following video says it all…Let the markets take care of themselves…

George Soros: One of the world’s most astute investors, and an Obama supporter warned that the economy is doomed in an interview with the Financial Times. He went on to say “I think it’s going to be pretty bad…you face higher prices for food and energy, and the budget allows little room for fiscal growth.”

Robert Barro, Professor of Economics at Harvard University: Barro recently criticized the federal stimulus package as a “terrible piece of legislation,” and calls for permanent changes to the tax structure to spur economic growth.

Unless the silent majority begins to speak very loudly, and very quickly, don’t be suprised to watch the Dow fall below 5,000…