The arrogance of the Obama Administration is pointing to failure

Jan
23

By Charles Biderman

 

As some of you keep reminding me, I am an old man. Yes I am as old as I am and I believe I have lived an interesting life. Three times, starting from zero, I have created a multimillion dollar net worth. To make three fortunes starting from nothing, means that I lost two fortunes. In other words, I know a great deal about success and failure.

 

What I have learned is that success usually comes from hard work and constantly adapting to reality. That means being totally engaged in what you are creating and being fully present in all parts of the process, particularly when you do not want to be. I have also learned that I have to be willing to fail, and most important learn from my failures.

 

Although hard work can create success, what follows, as night follows day, is arrogance. Most people get arrogant after being wildly successful. We all want to enjoy our success, In other words, enjoy the fruit of our labor. That is OK, if you get back to work soon after. However, real arrogance all too often leads to forgetting about the hard work that got you there and coasting on your laurels. It is like saying: “I am so great, look at what I did. Obviously I can do that again any time, but for now I just want to enjoy my life.”

 

That is how arrogance can create failure.

 

The Obama administration is the epitome of arrogance gone wrong. Yes, over the past two hundred years the US economy has been the most successful ever in the history of the world. Therefore, since the Obama Administration believes that our past results guarantee a great future. So he and his supporters are out there shilling that worrying about deficits is dumb. Just give the Obama administration all the spending authority it wants and not only will the poor and downtrodden rise up, but the overall economy will soar as it always has. And all will be good.

 

But that is the arrogance speaking. There is an underlying assertion that the Obama government, or any government, can effectively provide services, much better and fairer than the free market. But there’s little proof to back this up.

 

Let’s look at the result of recent wars. The US government under the Bush and Obama administrations, have done a horrible job since 9/11, killing hundreds of thousands, spending trillions and accomplishing nothing! The Post Office? The War on Drugs? The War on Poverty? Trillions spent and nothing gets done other than giving government workers paychecks.

 

This year the US government will collect $1.9 trillion in income taxes and spend $2.6 trillion on whatever, resulting in a $700 billion deficit. In addition, while only $600 billion in employment taxes will be collected in 2013, $1 trillion or so will be spent on Medicare, Social Security and government pensions. That’s another $400 billion gap.

 

And where will the government get the $1.1 trillion to fund that combined deficit? By printing as much paper money as necessary. After all government bonds keep going up in price and down in yield. So why not? What’s the problem with printing money forever?

 

The true arrogance of the Obama Administration is that it believes that the world will always treat the dollar as being as good as gold. Yes, since World War II the world has relied on the US dollar as the reserve currency. If our government stays as arrogant as it is, at some point soon the Black Swan will fly and the rest of the world will get smart and dump the dollar.

 

In recent videos I predicted that Barack Obama will go down in history as the worst fiscal US president ever. The railroad tracks that the US government has laid is leading us straight to bankruptcy before the end of Obama’s four years, unless of course we get off the train and point the tracks in a new direction.

 

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12 Responses to The arrogance of the Obama Administration is pointing to failure

  1. Dave in Canada on January 24, 2013 at 5:57 am

    Best post ever Charles Biderman, let the truth roll out. Most people are blind to the truth of the financial situation of America and other countries. How long the U.S. can print and still hold reserve currency will depend on a lot of factors. However, one day, the rest of the world will figure it out, then look out below.

    Thank you for your honest assessment on the economy and in general. Don’t listen to critics, they are jealous of what you have worked for and earned.

  2. Kochvilledi on January 24, 2013 at 1:46 pm

    Great post Charles.

    The world is trying to deny 1+1 = 2. Good luck with that. I have decided that it is impossible to estimate how much longer “they” can get away with resisting reality. There are dark, powerful forces at work that can not be underestimated.

  3. John Hansen on January 24, 2013 at 4:32 pm

    Hi Charles,
    The new video format is not working on:
    Mac – Firefox16.
    It does work on:
    Mac Safari 5.0.6
    Keep up with the good work.
    John

  4. josh in new york on January 24, 2013 at 8:34 pm

    charles, i do enjoy your posts. however, i think it’s a little unfair to keep harping on obama. he just works for the banks. i’d like to see you talk more about the fed buying up the mortgage backed securities, etc..

    p.s. i like the backdrop of the ocean but you need to make sure the horizon is level!

  5. Robert Johnson on January 25, 2013 at 4:20 am

    Have listened to you for the past year and really enjoyed it. You present numbers backed up with logic and facts. Excellent reasoning and information. Keep it up. And please be “unfair” if needed.

  6. Alan on January 25, 2013 at 11:57 am

    Charles,

    Obama is the worst President period, not just fiscally.

    He is doing a fine job of achieving his goal. This is to bring America down to a more “even and fair” level compared to the rest of the world.

    He is just “spreading the wealth”. All of it. All over.

    Meanwhile when the bridges begin to fall in the rivers at an increasing pace. And the sink holes from broken sewers open there will be no money from China to repair them. It was spent on boondoggles and union paybacks.

    Crazy like a fox he is.

    The terrible thing is….. it will get worse before any better at all.

    He is just the latest to take more money and liberties. Both parties have been at it since they created the FED and then took the gold.

    Obama seems to have a good case of “Hey y’all watch this!” when it comes to his turn to take a whack at destroying the fabric of our nation.

  7. Joey Anchovey on January 25, 2013 at 5:26 pm

    With the Trillions spent in his tenure, i just dont see how the Obama administration or the Fed or the Treasury can “unwind” all that money without serious deleterious effect on the economy. Its sitting in TBTF banks coffers and not allowed to be released to the public – but that cant last forever. At the end of his 8 years he will have spent as much money as all presidents before him, including Bush 43 and his two wars. Thats simply incredible and unfathomable. The US economy is going to crash….and Obama will again hold himself blameless. indeed, arrogance.

  8. Dan on January 25, 2013 at 9:42 pm

    Charles, I always enjoy your cogent videos. You are completely correct about Obama, but he starts from such a deep level of economic ignorance and by using the multiplier effect of arrogance he is destroying the nation I love.

    I noticed a Bloomberg article, “Hedge-Fund Leverage Rises to Most Since 2004 in New Year” that seems to tie in with your 1999 call of a market top that was later caused by the dot.com bust. Your 1999 article states, “Margin Debt Is Usually The last Source of Cash At The End Of A Bull Run” The Bloomberg article also states, “Hedge funds are borrowing more to buy equities just as loans by New York Stock Exchange brokers reach the highest in four years, signs of increasing confidence after professional investors trailed the market since 2008″. Do I have this similarity correct between your 1999 call and the current heavy borrowing by hedge funds equals a close to market top or is this to be expected in a market that has shot up dramatically, since 3/2009?

    Thanks,

    Dan Morris

  9. Chuck Szkalak on January 26, 2013 at 6:43 am

    Charles, best keep a sharp lookout for domestic drones. The Dear Leader may have you on a list.

  10. Tom Sullivan on January 26, 2013 at 5:46 pm

    Obama & Co. are some combination of: most reckless, most ignorant, most evil and most cynical. Crimes against the future.

  11. Ed_B on January 28, 2013 at 5:38 am

    Charles,

    This is an excellent call on Team Obama for arrogance but allow me to suggest that this is a two-sided coin and that the other side is incompetence. Obama has one and only one great attribute: he is excellent at running for office. He is not worth a toot in a whirlwind at actually running anything, however. But why should he be? He’s never run anything before. He’s never met a pay-roll or had to sweat out meeting a contract in spite of multiple obstacles and set backs. Most of our better CEOs would not hire this man to run their smallest and least important division. So, WTH did the American people decide to hire him for the most difficult and complex managerial job on the planet? Twice! If you answered “beats hell outta me”, join the club!

    Of course, elections have consequences and America will be paying a terrible bill for this little excursion into feel-good politics for generations to come, thanks to his Supreme Court appointees and the squandering of the public treasury.

  12. Davecydell on January 29, 2013 at 1:41 pm

    I have to take issue with one word: “print”.
    The days of treasury printing currency on 14th Street are waning.
    I envision Bernanke sitting at his private table in an exclusive DC restaurant/bar with his iPad.
    There is a beep, he says “Oh, Timmy needs another billion.”
    He takes a sip of his single malt scotch, taps a few keys and puts in an order to buy treasuries through a primary dealer.
    Talk about the bitcoin, the USD has become a bitcoin in its own right.

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Charles BidermanCharles Biderman is the Chairman of TrimTabs Investment Research and Portfolio Manager of the TrimTabs Float Shrink ETF (TTFS)

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