The running of the bears

I had to chuckle last week when the Dow tipped up a few percentage points on news Congress had passed a sweeping financial-services overhaul. Many in the media said that was because financial institutions such as banks would now have some sense of direction as to how their industry would be regulated. Yet like many policies of this administration, the security and sense of direction lasted about as long as a sugar high.

The market is trying to tell us something, folks! This economy is headed in the wrong direction. And no matter how hard he tries, Obama can no longer lay this at the doorstep of his predecessor. I know every morning, the administration has some intern who scours the papers just for the mess du jour. More governing by victimization …

To be more specific, our private sector (the true job creators) is still reeling. It’s struggling under the crushing weight of impending fixed costs such as healthcare, higher wage pressures, more reporting requirements and fewer incentives for innovation. Even with the dollar rising against foreign currencies such as the euro and China’s modest actions last month, the bears still run Wall Street.

If such moves were part of a larger correction that many analysts say was needed, then I would be less apt to point a finger at the White House. But such market fixes should have taken place months ago. What we have here today is more tinkering by federal fiat.

If anyone outside Washington actually believed Congress’s steps through “overhaul” last week would yield any positive benefits, then forecasts for Q3 and Q4 of this year would be far better. And still, they are not.

As I’ve said before in this column, an economist I am not. But I do know that one of the single largest indicators of the economic health of this nation is hemorrhaging. The Dow, and our nation’s critical private sector, need help. The longer the White House views the private sector as some harem of fat-cat capitalists, the more our workers will be out of long-term jobs.

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