"In violent times, you shound't have to sell your soul
In black and white, they really really ought to know
Those one track minds that took you for a working boy
Kiss them goodbye, you shouldn't have to jump for joy"
These days that old saying about the "squeaky wheel getting the oil" seems to have taken on added life. Every time I look around there is another temper tantrum or public spectacle that seems to work in the favor of the demonstrator rather than the annoyed that must put up with the noise. So in addition to oil, there is fame, money, less responsibilities, and maybe even legislative policies.
Down in DC, the score is two to one, two key Republicans have bolted debt talk meetings and now so, too, Barack Obama. Now both sides are said to be miles apart, although that McConnell plan is shaping up to be an emergency alternative that both sides might accept. I think it would be a mistake as once again the solution would be no solution.
It's enough to make you want to cry.
Or shout in the case of Vladimir Putin, who protested the world's foreign currency reserve as he was making the case for the Ruble and other currencies to replace the dollar.
"They are behaving like hooligans, switching on the printing press and tossing them around the whole world, forgetting their main obligations."
It's nuts when a former KGB agent seems to have a better handle on the importance of taking care of our currency than the Chairman of the Federal Reserve. I'm sure Putin never cried, even as a baby, but the weak dollar seems to have put a lump in his throat.
Wall Street Wails
Speaking of whining, Wall Street sucked its thumb and refused to play nice after Ben Bernanke clarified his position and desired not to engage in more quantitative easing. It's too early for the Fed to make an official stance, but there is no way it's not an option. Because the Fed puts so much time and effort these days into selling their handy work it might put them further behind the curve in the future. That's because it's hard to tout success when it hasn't materialized yet, and taking action counter to alleged success makes the message even murkier. In other words, the charmed offensive could backfire to the point where it delays emergency measures.
For now, there is no emergency, right? Unemployment rate of 9.2% (up three months in a row) and higher prices on everyday household items doesn't constitute a problem in need of an urgent solution? I don't think the Fed needs to expand its balance sheet anymore, what they've done already is criminal. The answer is to get people into the game. First, people should believe in the system and be encouraged to participate. I know our psyche is so fragile that it's too much to say "man up" but let's at least act like big boys. Not easy when the adults in the room are having fits because it has to be their way or the highway.
On that note, John Boehner is right to say a deal shouldn't be done just to get this thing over with. This is a moment in time when someone has to take a stand. Higher taxes isn't a smart economic policy. Moreover, it's pretty transparent that such hikes come from an envious need to punish the so-called rich. We grew up in a house of three boys and I always monitored how much juice was poured into the cups of my brothers. Even if they had a sliver more than I did, I would protest or scheme to enact justice. It was childish. Now, the goal is to pour out opportunity and earned prosperity to bring workers and job creators down a peg.
This doesn't help those in dire economic straits, but might stop them from crying. Ironically, the money raised from those higher taxes will not change the lives of those that believe the system has failed them. That money will go to unions, solar panels, wind farms, Medicaid, high speed rail, and other toys but not sustained job creation (see stimulus plan results).
Animal Spirits at Google
Two days ago I mentioned the world is watching would-be saviors Larry Page and Michael Dell to see if they can match that Steve Jobs magic. It's still early, but Page might be pulling it off. He is bringing the energy and enthusiasm missing in Washington, DC. This is what greeted investors from the Google (NASDAQ:GOOG) earnings press release yesterday:
"We had a great quarter, with revenue up 32% year on year for a record breaking over $9 billion of revenue," said Larry Page, CEO of Google. "I'm super excited about the amazing response to Google+ which lets you share just like in real life."
Is anyone out there super excited about the nation? When was the last time an elected leader said he/she was super excited about the nation?
Google is beginning to live up to the hype. There are a lot of things about the company and the topic of privacy I don't like, but I love that a founder has brought the passion that had been fading. The company beat consensus on the top and bottom lines and sent shots across the bow of Apple (NASDAQ:AAPL), Facebook, and Groupon. As a mature company, it is also realizing there is an accountability, and that includes smart hiring. If I can extrapolate something for everyone to be excited about it's that Google is still an advertising company and improvement there bodes well for all. By the way, it's great to be a "cool" company like Google, which had an effective tax rate that was only 19% during the quarter. Of course, General Electric (NYSE:GE) has skipped any taxes some quarters, but Exxon Mobil ponies up over 40%.
The Minnesota Solution
It looks like a deal has been crafted to end the shutdown of Minnesota's government, and it could be a harbinger of the eventual deal cut on Capitol Hill. In the Gopher State, both sides will get things that play out on the national stage as well.
No tax hikes - This is the centerpiece of Republican opposition and an integral discourse as the old guard has come around (I think) to the voice of the American public (imagine that).
$500 million bonding bill for new building projects - President Obama wants a honey pot to build solar and wind farms along with other "infrastructure" projects.
State worker jobs will not be eliminated - Bloated government is an essential part of the Administration's plans, which include wars on multiple fronts against so many industries. There has to be an army of IRS agents along with new agencies to enforce the myriad of new regulations. If it is war... you need troops.
While both sides may be warming to the McConnell Plan, I think it's a huge mistake for Republicans to strike a tougher bargain. In Minnesota, the state actually shut down and the governor finally blinked...the most. I'm not sure if it was the specter of the state not getting beer because permits can't be renewed that tipped this, but I think it's a microcosm of issues holding up a debt ceiling deal in Washington, D.C.
Economic data is mixed, but corporate earnings are coming in ahead of the Street and there are some big merger news on Clorox (NYSE:CLX) and Petro Hawk (NYSE:HK); this is good stuff for the stock market in general. The economy is still in tatters, however.