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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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  • IT'S THE SAME OLD SONG - By Charles Payne 0 comments
    Sep 18, 2013 10:06 AM

    These days listening to President Obama has become like listening to pop radio, not only is it the same song over and over but it's a song that we've heard decades ago. I guess politics reflects real life or vice-versa but all of a sudden what's new is old except presented as new. Take the year's biggest hit Blurred Lines from Robin Thicke, which the heirs of Marvin Gaye and astute music lovers swear is a (unauthorized) remake of Got to Give it Up.

    That 1977 hit from the soul master Gaye was playing in our house when the infamous blackout of New York struck New York City that summer so it's a big part of the Payne family story. I think Blurred ripped it off. There are also lawsuits against Lil Wayne for supposedly ripping off the Rolling Stones Play with Fire and Alicia Keys from going back to Hey there Lonely Girl that first hit the charts in 1962.

    In Washington President Obama has followed the lead of liberals, going back to enlightened European scholars of the 1800's, Franklin Delano Roosevelt and Lyndon Banes Johnson. It is the LBJ tune, however, that seems like we keep hearing when the Commander in Chief speaks. In the process we are reminded that good intentions of so-called Great Societies can't be legislated or produced by the whims of occupants of the Oval Office.

    Still the slate of ideas hammered away at each encounter by President Obama comes from that Great Society hymn sheet.

    > Economic Opportunity
    > Elementary Education
    > Clean Water
    > Housing
    > Immigration
    > Healthcare Insurance reform

    The War on Poverty

    Earlier in the week I wrote that America hasn't won a war in decades besides Grenada but the war on poverty is without a doubt the nation's biggest failure. Not unlike wars with nations that have inferior weapons but stern resolve, this battle hasn't been lost for fire power. Trillions of dollars have been pumped into the system to ostensibly "help" the disadvantaged but somehow poverty not only has remained firmly rooted it has actually gotten worse. There is no doubt in my mind the reason for this is we have picked the wrong targets to attack and forgot in the end to arm the disadvantaged to fight for themselves.

    In the most recent report on poverty and income from the Census Department several shocking developments, already known on Main Street, were officially confirmed.

    Median Income of $51,000 is less than $55,627 in 2007, the year before the Great Recession hit, and lower than the $56,080 back in 1999. We are reminded why family matters.

    > Married couple $75,694
    > Family household $64,053
    > Female (no husband) household $34,003
    > Male (no wife) household $48,634
    > Female single $26,016
    > Male single $36,989

    The rate of poverty has climbed back to match levels of 1993, 1883 and 1965, when the war against poverty was at its strongest and promises were made but never fulfilled.

    (click to enlarge)

    (click to enlarge)

    While incomes have rolled back to 1988 levels, poverty levels are on the cusp of moving even farther back in time.

    Until recently poverty levels improved markedly at the end of recessions and made big gains during the presidencies of Reagan and George HW Bush which brings me to the targets in this war. The idea of taking wealth from any source and giving them to another only creates short-lived prosperity for the recipient. The source of funds doesn't make a difference if the help doesn't come with strong strings attached. Those trillions that have been pumped into the system thus far have come from taxpayers or Chinese lenders.

    There is a serious effort to pump those funds directly from corporate America, already burdened by the highest tax rates in the world, through unreasonable minimum wages seen as a catalyst for forcing higher wages throughout the corporate structure. The message for the recipient is multifold including:

    o It's not your fault it's someone you never met that happens to be successful
    o Sacrifice is too hard for you but you should be paid more for less skills
    o Poverty should be comfortable

    Since the Great Society kicked in poverty has gotten worse for everyone except those over 65 years.

    (click to enlarge)

    We are going to hear over and over again how the top 1% has a greater share of total income in this nation and the narrative will be they somehow stole that money from those earning less. It's a shameful spin on a dreadful predicament. The liberal agenda has failed miserably. The notion of targeted recoveries that would actually keep out job creators and investors has backfired because these people had to be determined in the first place. On the other hand the message to everyone else that somehow government will make it right so sit tight has created a static class waiting for a solution rather than creating it themselves.

    Nobody has fared worse than the constituents of President Obama and those that have clung onto the sales pitch of government engineered solutions and mandated fairness for the last five decades.

    A big part of the progress dream is the mega-city. Giant metropolises where 50, 60 million people live in tight quarters, ride bikes to work, use solar panels for energy and accept high taxes for the benefit of all. Giant metropolises are huge cities surrounded with large suburban areas. Like a dart board, the bull's eye has most embraced Great Society theory and they continue to vote for such policies (see the New York City mayoral race). Despite their willingness to pay sky high taxes, metropolises have the widest income inequality gaps and biggest percentage of people living in poverty.

    Metropolises (principle cities) 19.7%
    Metropolises (outside cities) 11.2%
    Outside Metropolises 17.7%

    Respect Yourself

    Respect yourself, respect yourself
    If you don't respect yourself
    Ain't nobody gonna give a good cahoot, na na na na
    Respect yourself, respect yourself
    If you're walking 'round
    Think'n that the world
    Owes you something
    'Cause you're here
    You goin' out
    The world backwards
    Like you did
    When you first come here
    Staple Singers

    The excuses for not doing what it takes to climb out of poverty have been so extensive that just about any behavior is overlooked and excused. Making babies out of wedlock, dropping out of school, doing drugs and now even killing your neighbor. This is the massage to black Americans via the progressive Machine of Fairness which sort of takes a Malcolm X approach - any means necessary, to keep them in mental and economic bondage.

    When I was growing up black people dressed up for church on Sunday and Easter was a fashion show. We didn't curse in front of old people and always checked on grandma. As I've witnessed those qualities fade, at the same time I see them in other communities. In religious Jewish neighborhoods the Saturday morning stroll to temple is heartwarming and Asian reverence for their elderly is legendary. Moreover, many are Christians and attend church more than once a week.

    Selling our self respect for government "help" has destroyed the black community's ability to keep up.
    There are outside obstacles and this still isn't a post-racial society but it gets better and it's not 1880. Mothers try to be tigers but it's a heavy task when you're all alone. We have to respect ourselves and at some point respectfully say no thanks to government help that includes the notion we're too inept to help ourselves.

    (click to enlarge)

    We're going to hear that tune of politics of envy a lot in the weeks and years to come the only change will be an angrier tone. If it gets to you click on Respect Yourself by the Staple Singers.

    After the excitement over Summers' retreat earlier this week, the Fed will meet today to discuss the state of the U.S. economy and the fate of the central bank's $85-billion-a-month asset purchasing program; tapering is expected, and perhaps this may change the Street's fortunes bit, so let's hang tight to see what the FOMC says later in the session.

    https://www.wstreet.com/user/register.asp?source=3

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