My golfing buddy, Dan, is a man well attuned to the vagaries of the stock market.
He says it’s time to buy.
Two reasons. First, the third year of a President’s term of office has historically been a good year for investment. Second, legislative gridlock encourages investor confidence.
Makes sense to me. Mark Twain, Daniel Webster and others are credited with the quote, “No man’s liberty or property are safe when the legislature is in session.”
Whoever said it, there’s a germ of truth in it.
The sheer volume of legislation can befuddle the citizens, make businessmen timid, and cause economic activity to grind down to a snail’s pace.
The more new laws are cranked out of Congress, the more investors get jittery. Hiring decisions, equipment purchases, new product introductions, a whole host of business decisions become dicey when legal obligations and consequences are uncertain.
The Republicans are about to descend on Washington.
They come with a mandate to change the change, undo what has been done, and somehow get America back to full employment.
Not very likely to happen.
In the first place, the Republicans don’t control the Senate, so they can’t pass any legislation which requires the concurrence of both houses. Then there is the little matter of Presidential veto. The GOP can’t even override a veto in the House of Representatives.
So it looks like gridlock is coming.
Good for Wall Street, and probably good for Barack Obama. In 2012 he will no doubt take a page from Harry Truman’s playbook and rail against the “do nothing Republican Congress.”
That will be an effective slogan among those who insist that government must “do something” about jobs, mortgages, education, crime, or whatever. Fill in the blanks.
I happen to believe there are a great many things that government shouldn’t try to do something about. People have a wonderful way of solving their own problems, right from the ground up. Usually, the best thing that the government can do is nothing at all.
Anyway, there must be a point of diminishing returns when it comes to law making. The annotated version of United States Code runs to 370 big, fat volumes. The tax code alone contains over 44,000 pages and more than 5.5 million words. The Code of Federal Regulations which contains the authoritative pronouncements of all the national government’s boards, bureaus and agencies used up nearly 81,000 pages two years ago. No telling how many more pages are being added to accommodate the new health care bureaucracy.
Enough already. How about a moratorium on law making?
Or how about taking a look at the “Repeal Amendment.”
Advanced by Georgetown University law Professor Randy Barnett and William J. Howell, Speaker of the Virginia House of Delegates, the Repeal Amendment would give the state legislatures a way to undo unpopular federal legislation. Here’s what it says:
Any provision of law or regulation of the United States may be repealed by the several states, and such repeal shall be effective when the legislatures of two-thirds of the several states approve resolutions for this purpose that particularly describe the same provision or provisions of law or regulation to be repealed.
Much of the impetus for the Repeal Amendment flows from dissatisfaction with the legislation which has been dubbed “Obamacare.” But there is a deeper significance. The tenth amendment to the Constitution of the United States provides:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
Especially since the advent of the New Deal in the 1930’s, there has been a steady encroachment of the national government into the areas which were always considered the prerogative of state government.
States have always been considered to be the repository of the police power. In legal parlance, the police power is the authority to pass laws which affect the health, safety, welfare and morals of the people.
Education, marriage and divorce, criminal laws, corporations, the regulation of trades and professions, real estate, probate matters, and a host of similar areas of legislation have traditionally been within the jurisdiction of state and local government.
Unhappily, Uncle Sam has the exclusive power to coin money. And so the “Golden Rule” tends to prevail. He who has the gold makes the rules.
What authority was not given to the feds by the constitution has been purchased by a power hungry national government. Money for roads, money for schools, money for law enforcement. Whatever comes from Washington comes with the control of the national bureaucrats.
National Socialism rose up in Germany back in Franklin Roosevelt’s time. It became known by the acronym NAZI. The NAZIs were the bureaucrats, the czars, the bosses, the rulers who made all the decisions and issued all of the orders.
National Socialism in America?
Not here, please God. Not on this hallowed ground.
The only thing that probably can be done, aside from the flurry of work about to be accomplished in the Lame Duck session from Nov 15 through December 23rd, is to do something about underwater mortgages.
ReplyDeleteI predict (as well as advocate) that the Fed will buy Freddie and Fannie, which were bought under fairly broad TARP authority, and will do mortgage modifications on the underwater loans they already hold and those in Freddie and Fannie. The VA and FHA could do the same thing, or could sell to the Fed as well. The Federal Reserve could then do IPOs to reestablished regional GSEs in each bank region to defray some of their costs, if not all of them.