Here we are in the middle of an economic sh** storm. Bad stuff. And in the face of that the current administration is backing massive tax increases. Oh sure, I have heard the pitch, higher taxes are only for the “rich” guy. The plan will test once and for all the notion of “trickle down” because the President believes that taxing upper income earners will have no affect on anyone else. It will all be a surgical strike to take from the evil richies and give to those less fortunate. And we all know that the richies faced with less money will of course keep spending the same amount before having their pockets picked. Are there academics who actually have papers backing this crazy plan? This whole script plays out over an economy that everyone is calling a Depression. Ladies and gentlemen, the unintended consequences have been set in motion. Let’s see where the dice land.

Watch video:

Now the debate: Watch video.

If you don’t like him personally, sure go ahead. But this is just another example of creeping socialism and “feel good” politics.

Read (PDF). Excerpt:

As the year progressed, a series of life-threatening problems within many of the world’s great financial institutions was unveiled. This led to a dysfunctional credit market that in important respects soon turned non-functional. The watchword throughout the country became the creed I saw on restaurant walls when I was young: ‘In God we trust; all others pay cash.’ By the fourth quarter, the credit crisis, coupled with tumbling home and stock prices, had produced a paralyzing fear that engulfed the country. A freefall in business activity ensued, accelerating at a pace that I have never before witnessed. The U.S. - and much of the world - became trapped in a vicious negative-feedback cycle. Fear led to business contraction, and that in turn led to even greater fear. This debilitating spiral has spurred our government to take massive action. In poker terms, the Treasury and the Fed have gone ‘all in.’ Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation. Moreover, major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind-boggling requests. Weaning these entities from the public teat will be a political challenge. They won’t leave willingly.

From the AP comes this article titled “Economy moving in reverse faster than predicted“:

WASHINGTON (AP) — The economy is moving in reverse faster than the government can measure. The contraction for the fourth quarter of 2008 had been estimated at 3.8 percent just a month ago. Then the Commerce Department raised it to an astonishing 6.2 percent Friday — the largest revision since the government started keeping records in 1976. That was the economy’s worst showing in a quarter-century and raised the prospect that the nation could suffer its worst year since 1946.

You think a majority will ever understand that the so-called people in power have never had the ability to predict anything? How is it that so many have this need to believe in “predictions”? How can any thinking person believe that they can predict what comes during the meltdown when they could not predict the meltdown?!

I know some thought this film was a perfect fit for the Bush administration. Correction. “V” is for right now too. In the years to come we will find out how obedient we have all become:

I just heard Cramer say that his goal starting today is to “Obama-proof” (like bomb-proof) his viewers’ portfolios. Before the election last fall he said:

What will New York look like a year from now? The answer: bad and probably worse, and perhaps downright catastrophic. Three degrees of awful. The first step was passing the bank-bailout legislation. Now that its doneand if it didn’t get done we would have been looking at a guaranteed economic collapse…the critical issue will be presidential leadership. And while any president will be an improvement over the current one, there is a growing belief on Wall Street that Barack Obama has the capacity to lead us out of this wilderness while John McCain does not. I’ll go a step further: Obama is a recession. McCain is a depression.

Cramer is a smart guy. Knows a lot. But how do you know the 5 questions when listening to him:

1. How do you determine what market to buy or sell at any time?
2. How much of a market should you buy or sell at any time?
3. How do you determine when you enter a market?
4. How do you determine when you exit a losing position?
5. How do you determine when you exit a winning position?