April 21, 2011--The Obama Bull Market
It's time to take stock. Literally.
As I write this, the Dow Jones Industrial Average stands at 12,429. On the last day of trading before Barack Obama was inaugurated, January 16, 2009, it was 8,281.
It has risen exactly 50 percent during the time he has been in office. Quite a good return by anyone's calculation. Some who know about these matters better than I claim that this is to most successful bull market in all of U.S. history.
And yet many of Obama's opponents continue to call him a socialist. Including a great number on Wall Street who have been the primary beneficiaries of this run up. What do you suppose the investment community (what a euphemism) would be saying if this incredible bounce-back had occurred during the Bush administration? Do you think anyone would be accusing him of being a socialist, or worse? That's an easy one.
Perhaps, then, Obama is a socialist because he led the government takeover of the banking system and auto industry. Remember all the hot rhetoric about that? "Let them fail. We're capitalists after all." Can you imagine what would have happened to our economy, much less than the world's, if he had allowed that to happen? The guys on Wall Street now enjoying their multi-million dollar bonuses would be standing on street corners with the rest of us selling apples.
So how is Government Motors, formerly GM and Chrysler, doing? Pretty well by the look at their recovery and sales. And what is the government's stake in these two legendary companies?
In regard to GM, taxpayers took about a 60 percent stake in exchange for the $50 billion bailout. We reduced that months ago by nearly half and the government is looking to divest itself of the rest some time this summer.
We loaned Chrysler $6.6 billion for about a 16 percent stake in the company. Most of which, $5.8 billion is still owed. But Fiat is planning very soon to pay off that debt as well as a smaller one to Canada.
It is likely, then, that before the fall the U.S. government will be totally out of the auto business.
If we look at the banks and investment houses that received bailouts, with the exception thus far of AIG, taxpayers have not only gotten almost all of our money back but with billions in profits.
Though I had my questions as to why we insisted on loaning money to institutions such as Goldman Sachs, which said it didn't need or want any, the return on our investment looks quite good.
More important, we will soon be entirely out of the auto manufacturing business, having saved it, and have already pretty much divested ourselves from our stakes in the banks and brokerage houses.
And yet, pretty much every day on Fox and talk radio and in Tea Party circles, we continue to hear about Obama the socialist.
To me he looks pretty much like an old-fashioned capitalist.
Besides the need to feed our current political-entertainment discourse, can anyone explain this to me?
My view--a large part of the American right wants to delegitimatize Obama's presidency by delegitimatizing him. In part because it makes them crazy that this black guy, in regard to this, is so smart and doing so well.
As I write this, the Dow Jones Industrial Average stands at 12,429. On the last day of trading before Barack Obama was inaugurated, January 16, 2009, it was 8,281.
It has risen exactly 50 percent during the time he has been in office. Quite a good return by anyone's calculation. Some who know about these matters better than I claim that this is to most successful bull market in all of U.S. history.
And yet many of Obama's opponents continue to call him a socialist. Including a great number on Wall Street who have been the primary beneficiaries of this run up. What do you suppose the investment community (what a euphemism) would be saying if this incredible bounce-back had occurred during the Bush administration? Do you think anyone would be accusing him of being a socialist, or worse? That's an easy one.
Perhaps, then, Obama is a socialist because he led the government takeover of the banking system and auto industry. Remember all the hot rhetoric about that? "Let them fail. We're capitalists after all." Can you imagine what would have happened to our economy, much less than the world's, if he had allowed that to happen? The guys on Wall Street now enjoying their multi-million dollar bonuses would be standing on street corners with the rest of us selling apples.
So how is Government Motors, formerly GM and Chrysler, doing? Pretty well by the look at their recovery and sales. And what is the government's stake in these two legendary companies?
In regard to GM, taxpayers took about a 60 percent stake in exchange for the $50 billion bailout. We reduced that months ago by nearly half and the government is looking to divest itself of the rest some time this summer.
We loaned Chrysler $6.6 billion for about a 16 percent stake in the company. Most of which, $5.8 billion is still owed. But Fiat is planning very soon to pay off that debt as well as a smaller one to Canada.
It is likely, then, that before the fall the U.S. government will be totally out of the auto business.
If we look at the banks and investment houses that received bailouts, with the exception thus far of AIG, taxpayers have not only gotten almost all of our money back but with billions in profits.
Though I had my questions as to why we insisted on loaning money to institutions such as Goldman Sachs, which said it didn't need or want any, the return on our investment looks quite good.
More important, we will soon be entirely out of the auto manufacturing business, having saved it, and have already pretty much divested ourselves from our stakes in the banks and brokerage houses.
And yet, pretty much every day on Fox and talk radio and in Tea Party circles, we continue to hear about Obama the socialist.
To me he looks pretty much like an old-fashioned capitalist.
Besides the need to feed our current political-entertainment discourse, can anyone explain this to me?
My view--a large part of the American right wants to delegitimatize Obama's presidency by delegitimatizing him. In part because it makes them crazy that this black guy, in regard to this, is so smart and doing so well.
posted by Steven Zwerling at
5:21 AM
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