Despite one of the most massive money printing efforts in the history of the world, no jobs have been created in months. As the cartoon video nearby explains in hilarious detail, Ben Bernanke has lied to Americans about inflation. It is rampant and can be seen today inflating the price of assets in a new bubble by all who are willing to look.
Interest rates other than the Fed Funds rate are starting to ramp up. How will that play out in the real estate market as droves of ARMs begin to reset, sending monthly mortgage payments soaring while unemployment still hangs at lofty levels? The Sears strategy for Christmas sales is layaway, which generates no cash flow. Does that sound like a smart strategy for business to you, when your customers are looking at drastically higher living expenses a few months down the road?
Meanwhile, in Washington the president is focused more on scoring cheap political victories during the lame-duck session than on straightening out the damage that the federal government has done to the economy. As John Fund notes, the lame-duck congressional session was supposedly put to bed by the 20th amendment, which sent Congress home in January. The amendment’s writers figured no one in Congress would want to take the long train ride back to Washington after Thanksgiving, only to head right back out before Christmas. They didn’t anticipate air travel. This is a constitutional issue that should be dealt with by the next Congress.
The president used the lame-duck to make political hay, but other than the deal worked out on tax rates, nothing substantial was done. And with that deal, the president set himself up for some serious debating in 2012. As Ross Kaminsky writes in The American Spectator:
With Obama on record as (still) opposing that extension for the upper bracket but nevertheless agreeing to it, he’s put himself in a nearly no-win situation going into that critical debate in 2012. If the economy is going badly, he may try to argue “see, the tax cuts didn’t help,” but that argument is a loser among everyone but the far left. Nobody gets punished like incumbents for persistent unemployment. If the economy is going well, Obama may try to argue “now that we’re back on track, we don’t need to give this gift to rich people,” but that argument won’t work because the facts on the ground will lead people to understand implicitly that lower tax rates, even on the evil rich, are good for everyone who would like to be employed.
Though the repeal of DADT, ratification of New Start and the passage 9/11 First Responders bill will earn the president points among certain constituencies going into 2012, none address the real issues that will dominate the election cycle. Americans will be focused on the same issues in 2012 that they were in 2010, cutting the size of government, starting with a repeal of Obamacare. Spending and taxes are paramount, and changes in both will only be accepted if they serve to reduce the two.
Obamacare may not make it to 2012. Judges Vinson and Hudson are capable of putting a few nails in the coffin and America will continue to see the judicial battles waged over Obamacare’s finer points for another two years to be sure. The battle highlights an oft-overlooked problem in American politics, liberal judges. If the lawsuits against Obamacare come up against a Supreme Court stacked with a liberal bias, Americans will be looking at unbridled government overreach for decades to come. However, if Justice Kennedy holds true to the conservative territory he has staked out in recent decisions Obamacare may be stricken from the U.S. code.
Senators will be asked to confirm numerous Obama-appointed judges in the near future. Obama has had 62 of his nominated judges confirmed in his two years in office. Democrats are holding it against Republicans that President Bush had 100 of his nominations confirmed in his first two years, but in a congressional session that couldn’t even find time to pass a budget, is it any wonder that the Senate couldn’t find time to vet and confirm an extra 38 judges? Perhaps in the next two years Senate Majority Leader Harry Reid (responsible for scheduling in the Senate) won’t bog down the process with transformational liberal legislation like Cap and Trade and Card Check, and will instead focus on running the country. But don’t count on it.