Obama to win fiscal cliff flap, taxpayers set to lose

Congress to go home without real deal. Just as the Administration intended.

WASHINGTON, December 20, 2012 – Nothing much new to contribute this morning, and we’re considering taking a few days off around the holidays. Federal government employees, loaded down with a rich mother lode of accumulated leave that most of the rest of us will never have, have already been buzzing off for the holidays. Many of them won’t return until January 2.

Congress is scheduled to turn out the lights sometime tomorrow and this Congress will never return. The new one will be sworn in just after the first of the year. And it will look surprisingly like the dysfunctional one that’s wrapping up the current dysfunctional lame duck session.

We say dysfunctional only as a matter of degree. They’re matched in dysfunction by the Chicago political mafia entrenched at 1600 Pennsylvania Avenue, surely the most arrogant batch of villains we’ve had to endure in modern times. Problem is, they were re-elected, too. Could it be that the average American wants to be like the average European who believes that living as if we weren’t in the midst of a fiscal crisis will eventually mean there’s no fiscal crisis?

In any event, John Boehner and his lieutenants in the House are hoping to pass what they call “Plan B,” if not today, then tomorrow. The objective: vote for what the Democrats essentially agreed to last year but won’t agree to now since Boehner is proposing it—a plan to leave taxes largely unchanged for those families making less than $1M per year. Sounds good to us, as we indicated in an earlier column.

Even we would agree that incomes over $1M per year indicate some degree of wealth, so why not latch on to some of it? After all, the bulk of these rich dudes and dudettes are Democrats and contribute to the coffers of Democrats, so hey, let’s. But again, since this idea is coming from Republicans, it’s now a bad one. And besides, the Administration really wants to get its greedy hands on the incomes of those making between $250,000 and $1M per year anyway as they know full well that this is where most of the revenue is—the upper middle class, part of the class, of course, that the Administration swears they’re out to protect.

It’s all a moot point, though. If the House Republicans (and/or the few remaining Democrats capable of non-ideological reasoning) pass Plan B, we will still go over a chunk of the cliff, most likely. That’s because the White House has always threatened to veto this—an empty threat since Harry Reid’s useless Senate will never take it up or pass it any way. It was never their plan to pass anything anyhow. The Democrats’ only plan is to do whatever necessary to cause a disaster and blame the Republicans for it. Hence, Plan B, the Republicans’ only viable defense and one that’s even supported by anti-tax cult leader Grover Norquist.

As someone pointed out somewhere, Republicans, since 1989, have lacked the Great Communicator they once had in Ronald Reagan who, even in this situation, would already have the Democrats on the run. The Stupid Party has Stupid Communicators. None of them have the wit or rhetorical wisdom to overcome the Communists Democrats in the propaganda game.

Thus, even though we think a majority of the nation at large actually agrees with the Republican program of raising revenue a little while whacking government entitlements a lot, the Republicans will still come across as losers and evildoers, courtesy of the 24/7 Democrat propaganda machine, which depends crucially on their water-carriers in the media to spread the message.

As is often the case these days, this is an awful lot of politics for what’s supposed to be an investment advisory column, but that’s the way Washington is these days. Business, such as it is, is always subordinated now to political convenience and Democrat propaganda. Which is precisely the reason why we’ve had no perceptible economic recovery. If you continue to crush business, you continue to thwart hiring and profitability, which, in turn, thwarts tax revenue. The Administration may understand this, but they don’t care.

Like the dying Hugo Chavez, they want an end to capitalism and the beginning of a new socialist era at all costs, so what better way to begin than to simply destroy business. In this, they’re a heck of a success. And they apparently inspired a slim majority of voters to think likewise back in November.

So, a series of events is set to unfold, and the people America re-elected to solve the country’s biggest problem—government spending—are all set to begin the New Year with a reprise of the old. Will we really have to mount a massive march on Washington with pitchforks and placards in order to scare these clowns into behaving like adults? Looks that way. But the populace still doesn’t seem quite that angry just yet.

But they will if they see a huge jump in withholding in their first January paychecks. Or at least in the January paychecks of those who still get paychecks.

In the meantime, we’re back to our Waiting for Godot motif and photo. If it looks that way tomorrow, too, we’ll just take a hike and see you in the New Year. There’s no point in writing something about nothing.

The market is a bit wan today. People and traders are leaving town, and even the HFT computers may wish to go down for a bit of maintenance before they relaunch their assault on the markets in 2013.

So let’s close today firm in our belief that there will be no real solution to fiscal cliff issues in this Congress—the cause of yesterday’s market swoon when that became obvious. Same old, same old.

And Godot has yet to show.

 

Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.

Any positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.

Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.

References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.

 

Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.

Follow Terry on Twitter @terryp17

 


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Terry Ponick

Now writing on investing, politics, music, movies and theater for the Washington Times Communities, Terry was formerly the longtime music and culture critic for the Washington Times print edition (1994-2009) before moving online with Communities in 2010.  

 

 

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