12-15-2009

You're Out of Touch, I'm Out of Time

You’re out of touch , I’m out of time….so goes the refrain from the Hall and Oates song.  The administration should pay attention.  9 out of 10 Americans probably don’t believe that focusing on job growth and ignoring the deficit is a good idea.  Yet everyone with any consequence from the President’s economic team is out peddling this tradeoff as a good idea.  The administration is so out of touch with the American public that they think they will pickup brownie points for focusing on job growth, and pick up air cover for spending more money on their agenda by doing it in the name of job creation.   

The latest polls show that the population believes the country is on the wrong track.  About 60% of Americans think this and only 35% disagree.  A larger % of Americans believe that Congress is doing bad job.  Obama’s job approval rating is split about equally between those who approve of what he is doing and those that disapprove.  This is the lowest rating ever of a new President after 11 months.  After evening out after Obama’s push, those that don’t want the healthcare bill vastly outnumber those who want it, with about 53% against to 38% in favor.[i]

The message coming from the populace is quite clear.  The administration and the Congress have moved too quickly to the left to suit the vast majority of Americans.  The nine out of ten people that are employed are more concerned about runaway spending and the deficit buildup. They inherently know that taxes will be going up and interest rates will be going up to finance this splurge.  They are not as worried about the economy recovering as they are about mortgaging the future.  It’s fine for the President to beat up on “fat cat bankers”.  Most Americans believe that there is something inherently unfair about taxpayers bailing out a broken financial system only to see repulsively large bonuses paid the very next year.  However, designating a scapegoat only goes so far.  Americans can see past the smoke screen and understand that what the administration is doing in the name of “recovery” is potentially more detrimental than the abrupt end of the business cycle that occurred last year.  We’ve lived through a whopper of a recession, but we’ve lived through it.

The government, defined as both the Bush administration and the Obama administration, did what it had to, in order to prevent a depression.  We’re all thankful for that.  However, the Rahm Emanuel, “Don’t waste a serious crisis” logic does not resonate with the left of center, let alone with the right of center, citizens.  If the administration doesn’t get back in touch with the public they will be out of time by next November’s elections.

Fred S. Fraenkel
Vice Chairman and
Chairman of Investment Policy
Beacon Trust Company

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