I have essentially been away for a couple of weeks (at the Outer Banks working on my tan). I did not read a newspaper, nor looked at the news, nor did anything on the internet. When I got back I learned that the stock market has some wild swings - although it was almost at the same level as when I left. The Libyans had Qaddaffi on the run, Warren Buffett feels guilty about his tax payments, and the president has decided to run for re-election by bashing the Congress. First, I do not pay any attention whatsoever to the daily movements of the market. Since I am a long term investor, I care about trends and only look at what the market is doing quarterly. This day to day stuff can drive you crazy. It was shameful how the financial networks were milking the swings, actually saying that retirees should be worried about their 401Ks. Well if those accounts are not properly diversified then there should be concerned but otherwise - no. Second, I am certain that the administration's PR machine will tout the stance Obama took on Libya in supporting the NATO effort despite the criticism from Republicans for circumventing the War Powers Act. I guess this will be elevated to the "I got Usama" level. Third, there is already a mechanism in place for Buffett to send his guilt money to the IRS. However, in general if he is espousing raising the tax on the wealthy, he should know that there is not enough money there to make a serious dent in the deficit. Also, if the result will be to tax entrepreneurs and job creators, the result will be perverse. History tells us that when you raise the tax rates of upper incomes, you get less tax revenue. If you want to drive the high earners to shelters and off shore, then this is the ticket. Lastly, I am absolutely convinced that this president and his staff are tone deaf. Blaming the republicans in congress for the failures of this administration assumes that the voters forgot that Obama and the democrats had bullet proof margins in both houses of congress. Obama got health care "reform", Dodd-Frank, and everything else except Cap and trade (so he told the EPA to enforce it instead). His minions enacted the left's "progressive" agenda in all of the cabinets and agencies without a single republican vote. He surely can't be serious. Speaking of tone deaf, I have written before that this is a president that enjoys the trappings of the office but not the job. All the golf, parties, fund raisers and toney vacations speak to this juxtaposed to the lackluster leadership in the office of the president. What genius advised the president to go on a bus tour right after the Iowa caucuses in Darth Vader's bus? And what genius said take your vacation at the playground of the rich and famous during a time of perceived crisis, down economic times and general bad news? I would have advised the president to go to Dollywood or to Branson. Think of the power of those optics! I can't imagine Pat Caddell or Dick Morris or Bob Beckel advising any of this nonsense. The president seems clueless but perhaps he knows that unlike his predecessor, the media is going to be silent. But just ask yourself: what do you think the reaction would be if George Bush had done exactly the same things?
Harold A. Black is professor emeritus in the Department of Finance, University of Tennessee, Knoxville having retired after 24 years of service. He has served on the faculties of American University, Howard University, the University of North Carolina - Chapel Hill and the University of Florida. His government service includes the Office of the Comptroller of the Currency and as a Board Member of the National Credit Union Administration. He also has served on the boards of directors Home Savings of America and its parent company, H. F. Ahmanson & Co., Irwindale, California prior to its merger with Washington Mutual Savings Bank, on the board of New Century Financial Corporation, Irvine, California, then the nation’s largest real estate investment trust and as director and later chairman of the Nashville Branch of the Federal Reserve Bank of Atlanta. He writes an occasional article for the Knoxville News-Sentinel at http://www.knoxnews.com/staff/dr-harold-black/. His web page is haroldablackphd.com