Mish's Global Economic Trend Analysis

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Does Mitt Romney Really "Know Better" Than the Silly Things He Says? Posted: 22 Sep 2012 01:07 PM PDT Does Mitt Romney really "Know Better" than the silly things he has said on the campaign trail lately? I ask the question because that subject came up twice recently, once in Time Magazine, and once in the Financial Times. Writing for Time Magazine, writer Joe Klein brought up the subject in The Imaginary Campaign It is the business of a presidential challenger to overstate the dire situation the incumbent has inflicted on a betrayed public. Bill Clinton certainly overstated the extent of the economic recession in 1992. But there are limits. There is reality. In this country, successful politicians have always avoided apocalyptic predictions. This year, however, Republicans have routinely embraced the dark side. If Obama is re-elected, "I don't know that our country really survives four more years of all the regulations," Senator Rand Paul told CNN's Wolf Blitzer during the Republican Convention. Blitzer called him on it, saying, "Wait a second. If President Obama is re-elected, you think the United States of America, in four years, will not be the United States of America?" Paul beat a hasty retreat. Romney has lived the past six years in his party's overheated shark tank, spending more time pestering plutocrats for cash than meeting with and listening to the general public. I suspect Romney doesn't really believe that 47% of the electorate are moochers; he was just dialing for dollars. But it's becoming increasingly difficult to see how the man who mouthed those words, whether he believes them or not, can be elected President. Foot-in-Mouth Disease I wrote about that set of now infamous statements by Romney in Foot-in-Mouth Disease. Shortly after Romney made that huge gaffe, Tim Pawlenty, a Top Romney Adviser Quit the Campaign. What caught my eye in the Financial Times article was an analysis of some of the statements made by Romney regarding trade with China. Let's take a look. Chris Chocola, president of the influential Club for Growth lobby group, gave the most tepid of endorsements of Mr Romney on Thursday, saying he could not be sure that the former Bain Capital executive would be a "pro-growth" president. "I think he has the potential to exceed expectations. But it's a mixed bag with Romney. That's his problem . . . you don't really know how he'll serve," Mr Chocola told reporters at a briefing organised by the Christian Science Monitor. "When you start to threaten a trade war with China, when you start to pander politically on trade issues, you're hurting the economy, you're not helping it," Mr Chocola said. "What we need is politicians who stand up and [say] trade with China is good. Yeah, this is why." With his background in business, Mr Romney "knows better", Mr Chocola said, "but he says what he says". Mr Romney has vowed to label China a currency manipulator on the first day of his presidency, while Mr Obama this week took action against China over its export subsidies for cars and car parts. Does Romney Really Know Better? Chocola says "Romney knows better". Really? Why should anyone believe he does? In fact, it is far more logical to believe Obama "knows better" for the simple reason Obama has resisted huge pressure from trade unions to label China a currency manipulator for the last four years. Understanding Smoot-Hawley One would think that Romney ought to know something about Smoot-Hawley Yet, off he goes, threatening a no-win trade war with China when instead he ought to stand up and explain why trade is good (with China and everyone else). A Fool or A Liar? If Romney does what he says he will do, he is a fool. If he doesn't, he is a blatant liar. Now, we all know candidates lie. However, Romney made a pledge to do something blatantly stupid on day one. Is he going to lie about a "day one" promise? If that is the premise (and several high-placed Republican friends suggest that), I have to ask: why should anyone believe anything he says at all? It is far easier to believe Romney is a complete dunce regarding the benefits of free trade than he is purposely making a pledge of this nature. The only other possibility (and it is a far worse possibility), is Romney knows his position on China is wrong, but he will do what he says anyway, if it helps him get elected. Regardless, of whether he "knows better" or not, Romney certainly "says what he says", frequently flip-flopping in the process (as he does on health-care reform). Those actions have him in extremely hot water. Thus, I side with Joe Klein on multiple grounds, on several issues: "It's becoming increasingly difficult to see how the man who mouthed those words, whether he believes them or not, can be elected President." Please bear in mind, this is not an endorsement of president Obama. It is simply a statement of political reality regarding hopelessly inept statements by Romney. The fact remains, both Obama and Romney are fatally flawed, and I will not vote for either of them, but I will vote. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Greek Bailout on Hold Again, Is Obama Partly to Blame? IMF Economic Hit Man Hypocrisy Posted: 22 Sep 2012 08:52 AM PDT Once again talks between the Troika and Greek politicians broke down. Talks between the Greek political parties have also broken down. Meanwhile support for Golden Dawn, a political party with a Nazi-like symbol is on a huge upswing. For details, please see, Greek State Tries to Stem Neo-Nazi Rise. Talks in Greece over the next tranche of loans are now on hold until after the US election. There were numerous reports this week that Obama did not want failed talks before the election, preferring instead they not fail until after the election when it will not matter to him. Limits? What Limits? The talks broke down when the Troika asked for more wage and benefit cuts. The finance ministry says it can make the required savings from cuts in operational expenses and the restructuring of the public sector. But the troika of international lenders, especially the IMF, is unconvinced. It has asked for more wage and pension cuts, according to a person familiar with the talks. Talk of tension between finance minister Yannis Stournaras and a member of the troika as well as strains within the coalition have fuelled rumours that talks have reached stalemate. Fotis Kouvelis, the leader of the moderate Democratic Left party, said: "The troika must stop attacking Greek society. The troika must understand there are limits." Greek Bailout on Hold Again So ... Greece Braced for Bailout Delay No deal was clinched on Friday, and the troika's chief inspectors announced a pause from the discussions. The troika said in a statement that the mission was expected to return to Athens after about a week, saying "good progress" had been made during this period. People familiar with the situation said the US presidential elections had played a role in delaying the disbursement of the loan tranche to Greece, although others disputed this interpretation. "Everything is being put back," said one senior Greek official, insisting that the troika's report and the disbursement of the loan tranche would take place after the US elections. "The disbursement may even be pushed back to late November." IMF, Economic Hit Man Note the hypocrisy of the IMF, insisting Greece tackle its pension and deficit problems now, but urging the US to not do a thing about its problems. I discussed this at length in Christine Lagarde, IMF Chief, Warns US About Short, Medium, and Long-Term Problems; Like All Keynesian Clowns, Lagarde Does Not Want to Deal With the Present. The IMF is the protector of interests of big banks and does not give a rat's ass what small countries it destroys in the process. Bear in mind, Greece does need reform and plenty of it, especially in regards to pensions and work rules. However, Greece does not need tax hikes and nor does Spain. Yet Brussels and the IMF have insisted on that, while openly cheering more deficit spending in the US. Countries accepting money from the IMF on IMF terms are fools. Greece and Spain both need structural reforms, but they also need to default on foreign debt if they are to have any chance of recovery within a decade. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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