Post Partisan Syndrome is Catching - State of the Union

Weariness with politicians spinning the truth into their viewpoint, a lingering sense of malaise arising when polarizing political figures talk over each other on TV shows and a feeling of apathy or dread when considering who to vote for. These are all symptoms of PPS, Post Partisan Syndrome, a condition that is reaching epidemic levels judging by the 83% disapproval rating of Congress in recent polls.

Last night, the President made a break out move towards becoming a true leader. The State of the Union address called out the big issues of the day. The economic pressure and joblessness of the middle class and young people, the lopsided trade regime with China, the poor outcomes of our educational system, the escalating cost of college, the loss of competitiveness, building an energy infrastructure that is ours and clean.

He also called Congress on to the carpet for their partisanship, their obstructionism and favoritism. Did we really hear Obama even question the sacred cow of our political class, the role of money in the system and how it is undermining democracy and effective governance?

It wasn't all middle of the road. He wasn't didn't sound ready to cut spending or entitlements generally, but the President was aiming towards the middle and he was close. I think with three years experience behind him, he has learned the President can choose to lead the way he thinks it is done best and that is for benefit of the nation as a whole, not the moneyed groups that helped him get there.

In his usual affable way, Obama has thrown down his gauntlet at the actual problems we face, not just a party platform. Reagan had that ability to keep things pleasant and true. If Obama keeps going this way, he will become a real President and no longer be the tool of Pelosi and company. Having crossed the threshold, President Obama is no longer in denial. No he made out like he is confronting PPS head on. For the first time in quite a  long while I had a glimmer of hope that America's leadership will set us in the right direction again. Hope so.

The Economy Wants to Turn Up - Global Debt Crisis May Have the Veto

There is a lot of evidence that business is improving. Employment trends are improving, exports improved, retail sales improved and none of that was predicted four or five months ago. To some extent, this is what America does. 

There are millions of young people who want to get on with their lives and establish a household. Car sales have been running millions of cars a year behind the trends of the previous decades and the demand for new more fuel efficient cars is huge. Entrepreneurs by the millions in this country strive every day to build a business, improve a product or find a new and better way to do things. No wonder the economy seems like it wants to grow. 

The line up of threats to this scenario are daunting, however. Over the next couple of months, Europe will have to come to grips again with a crisis it may not be able resolve. Greece may fully default in March, while other indebted countries in Europe may have trouble financing their bonds. If Europe unravels, the spillover here will be substantial. There is also a risk of conflict with Iran and a spike in oil prices. 

Meanwhile, the US is still forecast to have a Federal deficit of over $1 trillion in 2012. Another year or two of that and we may be in debt crisis too. 

The business cycle wants growth and increased investment. The debt cycle wants productivity, reduced government spending and austerity. Which trend will prevail?