Friday, October 24, 2008

Bush's Socialism Shortens the Recession

I know I'm just a branding guy, but you have to remember that a big part of branding is about the linkage between how the brand is perceived and what the brand delivers . I constantly tell my clients that "Brand is not product. Brand is brand. Products are proof of what the brand promises.

Which leaves me somewhat confused regarding everyone's misperception of what Socialism actually is and is not.

Don't get me wrong, I'm a firm believer that the business of America is business. As far as I'm concerned, if General Motors and Bank of America go down, you might as well use your dollar bills for kindling after the power goes out. The American economy is way too important to the entire planet to be allowed to falter and die. The global economy is, to the chagrin of some, far more global than anyone really cared to admit. It being the most coveted market in the world, if the United States goes down, it takes the fortunes of every off-shore enterprise with it. Flushed along with your domestic job are thousands of foreign dependents, knocking out the foundations of other countries' economies, the strongest of which barely hold their own even in good times.

So it makes sense to me to help things along. Just as a father instills character in his kids by providing matching funds for their cars instead of simply buying them, I see no real issue with bolstering support for a national economy that drives the international economy. I especially have no problem when (as has happened in the past) the government program turns a modest profit for its taxpayers. What could be more capitalistic than that?

Yet there are Conservatives out there who object to the program as Socialism. In one sweeping move, they decry any means of injecting a speedball into our national economic arteries as socialistic. Curiously, the Socialism to which they object carries over to tax increases, but doesn't attach itself as easily to tax cuts. Aren't both products of government intervention? Even if you subscribe to this latest definition of Socialism, shouldn't it apply equally across the board?

More to the point, if Conservatives insist on calling the bailouts Socialism, aren't they labelling George W. Bush, arguably the most conservative president in American history, a Socialist?

I can't answer that one just yet, but one thing I can tell you is that this "recession" isn't going to last nearly as long as anyone in the media thinks. Despite the volatility of the stock market, there's still plenty of money out there. And it's the smart money guys that are going to make sure this recession doesn't last long. You want to know why? Because it's way too huge a profit opportunity, that's why. Here's the proof:

You may have read about all the vanishing wealth from this economic turbulence. Really? According to Reuters, October 24, 2008, it hasn't vanished at all. It's simply been diverted from commodities like oil into real estate:

Sales of previously owned U.S. homes rose 5.5 percent last month, the biggest gain since July 2003, and the inventory of unsold homes fell, a hopeful sign for a housing market mired in a long slump...The National Association of Realtors said on Friday that sales of existing homes rose to a 5.18 million-unit annual rate from the 4.91 million unit pace set in August. Economists had expected sales to rise to only a 4.93 million unit rate.

Still think I'm nuts? Check back several blogs ago, when I went on the record to state that gas prices at the pump would start falling just as soon as the market manipulators grabbed their profits from that little panic. Never before have oil prices jumped as high and then fallen as fast as they did in 2008 -- totally according to plan:

Hmmm. Where can we put all that money, do you suppose? Why, in foreclosed real estate , of course! It's next on the buy-low-sell-high circuit. And as soon as all that capital quietly snaps up all those foreclosures, guess what's next? Institutional stocks. Banks. Industrials. All those companies that the smart money boys need to rehab and finance those foreclosures they just bought.

Housing prices recover. Companies start hiring again. The consumer economy breathes new life. And Joe SixPack gets his home equity back, enabling him buy that 60 inch plasma television which, after five years, will be paid off at twice the price it should have cost.

And who do we have to thank for this quicker recovery? America's first Socialist president, George W. Bush.

I mean, it was his idea, right?


Blogger Stevie said...

I think GW Bush would puke if he read this post because he isn't a socialistic kind of thinker. He's not much about thinking -- but he is about following the suggestions of others and I think this suggestion came from elsewhere.
I am a firm believer that at times the government must be hands off, there are times that a little of FDR's New Deal programs would be of immense help
YES there was a panic and the speculation over gas prices distinctly drove up the price and it was stupid for the govt not to stop it-- but that's the what Phil Gramm and fellow oil men Cheney and Bush absolutlely love-- is that rise in prices to whatever the market will bear. Granted it affected every other aspect of the supply chain in this economy here and around the globe.

Consider that every time Bush goes on tv to reassure the US public, the stock market takes a dive. (how reassuring is that and doesn't it show a lack of faith in his leadership?)

What happens is dependent now on the election results and as things settle down in the next few months, the economy will start to rebound. I totally agree with you on the real estate market

2:46 PM  
Blogger Rob Frankel said...

You bet. What we're seeing here is a crisis in confidence, which is what happens when brand trust breaks down. When people have no more faith in your brand, they switch to another one. America's brand value has been severely damaged, causing heightened concerns and withdrawals.

Once that faith is restored, the markets will recover much more quickly.

Life is a branding problem after all.

7:46 AM  

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