Freedom of Speech and Regular Elections will Always Resurrect the US Economy

The US has freedom of speech enshrined in the US constitution. As we have seen anyone can say anything about any public figure and get away with it.

Witness the beauty pageant, Sarah Palin and others who have been vilified by blogger’s and news services alike.

But that’s the worst of it. The best of it is the open debates on Pelosi and what she knows and GITMO battle of the titans between Obama and Cheney.

In the financial sector we have Geithner, Bernanke and others all having to be mindful of what they say and what they do, but having to do it regularly. Geithner is on a power trip which he genuinely believes will enable him to save the US economy. We will see.

This is a good thing.

The US is self-correcting. I believe it is due to two things. Free speech and regular elections. Very few nations come close to this ideal.

In short America can screw up, and that’s okay. (That’s one reason for making sure you look after yourself and your nest egg and not leave it to others). Nations that don’t allow themselves to get it wrong occasionally will always live or live off the coat-tails of dynamic countries like the USA.

What it means for Baby Boomers is things can change in America very quickly in the short term. If something isn’t working and many felt that was the problem with the Bush years, then put some else in power for four years so they can have a go.

In less than two years there is a vote for congress. A time to mark the score card for Obama and give him some real feedback on how he is going.

If it doesn’t work out, off with his head and try someone else.

This is really what makes the US the great country it is. It’s the land of “Have a Go”.

The trick is to find ways to make all the changes work for you.

Right now government is taking over a significant portion of the economy. The pendulum is swinging towards more government and less private sector. They are likely to employ many more people to carry out their “mandate”. Obama knows he has a window of opportunity to get his programs implemented because as with all things, there will be some down-side.

In this climate it seems the best thing to do is get a government job if you can. If you work for a small firm you could be in danger of losing your job (if you haven’t already) and possible losing your nest egg if it is in the firm or has not been paid up.

Put as much of your money in safe assets and sit out the volatility that is bound to happen when such massive structural changes are taking place. Forget the credit crisis, the changes taking place at the federal and state governments will have far greater affect on you and your well-being.

Now is not the time to be looking for high returns. It is a time to hibernate and wait. By all means put some money at risk if you want to, but keep the bulk of your money safe if you can.

With your money safe and a safe government job you could sit this one out. If Obama succeeds and gets a second term, unless he reverses direction and downsizes government and unleashes the regulatory tsunami that is planned you can continue to expect low returns from your investments.

What will happen is money will flow under government control to those selected industries and business that have been chosen to carry the economy forward.

As with Follow the FED, it might be a good idea to follow Obama. Where he sends the money might make a good investment in the short term anyway.

If he throws billions at GE for a national wind farm then that might be a good place to invest, or even in the national health database. The government will not want to fail so will keep pumping money into any chosen industry regardless of its ability to create a profit without government funding.

Didn’t the Investment banks declare profits in the last quarter? Strange that they seems to forget the billions of dollars in bailout money they have to pay back and the relaxing of the mark to market rules. But their stocks are risking 😉

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