Republican luminary Donald Luskin, the author of the book I Am John Galt: Today’s Heroic Innovators Building the World and the Villainous Parasites Destroying It is calling on like minded investors to halt the current market rally and bring on a Bear Market leading up to the election to help Mitt Romney's chances.
First Luskin tries to attribute the current stock market rally to Romney's selection of Ryan as VP, signaling to investors that happy days will be here again with Ryan as Vice President.
Better to Be Bearish
By Donald L. Luskin
If stocks continue to climb, confidence in the economy will climb too, and Obama could win. On the other hand, a falling stock market will poison confidence, and Romney will win.
What’s an investor to hope for — a stock-market crash? Perhaps, but happily the best outcome is the most likely one — a polarizing, down-and-dirty, rock-’em-sock-’em campaign that maximizes uncertainty and keeps the economy and the stock market on tenterhooks from now till November.
Luskin believes these poor beleaguered investors who (like him) imagine themselves to be John Galts, should follow the example of the central character in Ayn Rand's famous novel, and turn their backs on the economy. Luskin calls on wealthy elites to halt their investments that stimulate the economy and push the stock market up, in order to create a Bear Market and all the economic pessimism that goes with it.
These Galt wannabees see themselves in the self aggrandizing role as the mainsprings of our economy, from who all prosperity and progress flows out to American society. They want Americans to feel pain from the withdraw of their beneficence so they will see the wisdom of putting their spokes-model Mitt Romney in the White House.
Luskin also hopes that the viciousness of the upcoming Super PAC attacks will create more uncertainty and spook less ideological investors.
Today's situation for Obama is similar to what FDR faced in 1938.
Are we stumbling into another recession?
By Robert J. Samuelson
There are eerie parallels between now and then. Then as now, commodity prices (grains, minerals) were rising rapidly; fears of inflation grew. Then as now, the federal budget deficit was criticized as too large. Then as now, the president was widely perceived as being anti-business.
What caused the recession? President Franklin Roosevelt blamed a "capital strike" by monopolistic companies determined to weaken him. As Kennedy notes, "net new private investment in the mid-1930s was running at only about one-third of its rate of a decade earlier." Roosevelt responded by creating a presidential task force to investigate monopoly power.
For their part, business leaders blamed Roosevelt for poisoning the economic climate. Said one: "Uncertainty rules the tax situation, the labor situation, the monetary situation, and practically every legal condition under which industry must operate."
I have to wonder if this sort of thinking hasn't been affecting the behavior of investors who share both Luskin's delusions of grandeur and his doctrinaire politics, for some time now.