The president's cavalier bet

Obama is focused on 2014, not the US economy.

By Jim Cramer Oct 14, 2013 10:08AM

President Obama delivers remarks on the government funding impasse in Rockville, Md., on Thursday (© Jason Reed/Reuters)Either someone knows something about a deal in Washington, or we are beyondTheStreet.com logo complacency and have decided that, whatever happens to the bond market because of the debt talks, it doesn't matter.

 

How else could we not have given up the gains from the other day -- gains based on a compromise that would have forestalled default?

 

Now, it is true that the senators are talking. But without someone from the White House being involved, you have to believe that nothing can get done. From what we can tell, President Barack Obama's stance is that the debt ceiling must be raised, the government must be opened and nothing has to be given up. To me, that's a statement that says the American people and the people of the world are being held hostage by the government. But the president will be able to portray it as being held hostage by the minority of the Republicans, because the position on the other side of the trade -- the Republican side -- is too difficult to understand.

 

The president will be able to say, "I want to send those Social Security checks out, but John Boehner and the radical Republicans won't let me."

 

What's weird is that the market is acting as if, at the last minute, the Republicans will simply say: "We lose. We've accomplished nothing, and now we are all going to go back to being a minority party in the country even as we are the majority party in the House." The president is betting that the GOP will avoid the third rail or lose a huge number of seats next year -- this is all about 2014, and not about the U.S. economy, which could go down for the count by next week -- because he will say the GOP kept you from your check.

 

I think that's way too cavalier of the president. The GOP has so far not taken any stance that involves anything other than "We will give you a couple of weeks, and then we will do this again." That is a nonstarter. I think the president has the upper hand, because he doesn't care about the economy or the stock market -- he just cares about unilateral victory -- and it isn't as if the press is going to call him out on it. After all, other than a few people at various Murdoch enterprises and a commentator here or there, I don't know a soul in the media who thinks the Tea Party is anything but the worst the American people have to offer.

 

So it is hard for me to envision a case in which the market shouldn't be down much more as we approach the debt ceiling deadline. It should be falling at least as much as it has gained, if not more so, because the downside is asymmetrical. The dip seems too shallow without more concrete information that I think no one actually knows.

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565Comments
Oct 14, 2013 10:56AM
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Help me understand; how anyone can think it is ok to continue to spend money, we don't have; continue to borrow money & give it to countries that don't like us; waste money on foolish & greedy perks. Everyone in Congress; Senate & the President should be FIRED.  This mess is so ridiculous; it is pathetic. RJO 
Oct 14, 2013 12:23PM
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If  Mr Obama does not act soon, he will be remembered as the President who:
-- Oversaw the first ever fiscal downgrade
-- Oversaw China replace the US as the world's largest economy
-- Oversaw the dollar replaced as the world's currency
-- Made the US the laughing stock of the World
-- Made the US a reviled country
-- Increased America's poverty, where 20 million people go hungry
-- Gives away billions to often countries who hate America
-- Shamed America for wanting to invade Syria
-- Was shamed by the Russian President and German Chancellor over leadership qualities
-- (there are many more)

Sadly, Mr Obama (the 'yes  we can' President is rapidly becoming the most unpopular President in history)

Oct 14, 2013 11:12AM
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America already has more government programs then they can afford and now we are arguing about adding another program (Obama care). In addition we are paying for these programs with funny money printed by the fed. Are we insane!!!
Oct 14, 2013 10:24AM
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It is hard to understand isn't it Jim?  The passengers have been told the airplane does not have enough fuel to get to the airport and they are now arguing amongst themselves who is at fault. Humans acting in groups can look very foolish and we are seeing this now.  Good Lord people are you totally blind to the fate before us?  Like the Romans screaming for more blood the masses seem now to be screaming for more debt. Oh what I would give for the voice of one adult to be heard above the screaming children.  I believe we have passed the tipping point. This is why we will end up with an autocrat like Putin to make our decisions for us as those in the system we have now are incapable. JMHO
Oct 14, 2013 11:10AM
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Cramer is right - Obama is more focused on the 2014 elections than he is on the economy.  But that's nothing new.  Obama hasn't stopped campaigning since he first ran for the US Senate.  His entire administration has been one long campaign and it's getting old.

And the Repubs are no different - all of their focus is on 2014 and 2016, and they aren't willing to realistically address any long term solution to our weak economy in the meantime.  Ted Cruz won a 2016 straw poll over the weekend.  What the hell is the point of having a presidential straw poll a full year before the mid-term elections?

Both parties are only interested in short term extensions for everything - budgets, debt ceiling, sequester, tax policy, etc....  They are too paralyzed and polarized to come up with any substantive long-term reforms or solutions.

We have to find a way to break out of this constant and never-ending, 24-7-365 election cycle, and the only way we can do that is by voting out the establishment and voting in a bunch of 3rd party candidates.

Oct 14, 2013 11:06AM
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We are currently the most hated, most maligned, most ill-governed country in the world. The country is about how much we make the middle class suffer.  Our taxes are worse than burdensome, they are crippling.  The rich pay little or no taxes and the poor get back more than pay in.  That leaves the middle class to foot the bill for all.  Until the government realizes that you cannot destroy the middle class without consequences, we will never again lead the world in anything.

I encourage EVERYONE to vote out all sitting Congressmen.  Hey, can it get worse??? 

Oct 14, 2013 11:28AM
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HIS ARROGANCE HAS PUT WHERE WE ARE. THANKS BO
Oct 14, 2013 10:51AM
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next time up i agree.  what in the world is going on?!  how can we be initiated with so much debt but not want to make spending concessions to help bring that debt down (military cuts, nation building overseas cuts, entitlement cuts and so on)?  is there something we don't know?  an ace in hand?  are we OK as a gov't with all this debt because as a country we have so many assets that we could knock all those trillions of dollars out if we really need too?

 

if not...then again...what in the world?  where is common sense?!

Oct 14, 2013 11:07AM
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So this is Obama's plan to put Pelosi back as Speaker of the House. 

Oct 14, 2013 11:32AM
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Here's an idea.  Let's extend everything as is until Dec. 2016. No increases no decreases.

Vote all the bums out of office and let the next group understand that they are next, unless they do it better than the previous bums.

It make take a few voting cycles but maybe they will understand that "We the People" control their fate.

Oh hey!!   We didn't forget that last raise you approved either!!!

Oct 14, 2013 11:14AM
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It is really dumb to have this debate come up every 1-6 months...
Oct 14, 2013 11:09AM
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Well, not a good combination down here today; low volume, plenty of manipulators and an arrogant, incompetent, socialist, inept, evil so called president that is destroying our great country....And you wonder why we are going down the toilet this morning? Will be a long day...Lets see if anything positive happens this afternoon.
Oct 14, 2013 11:32AM
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- Balanced Budget
- Lower Taxes
- More freedom

All things many countries have got ,, without shutting government down and threatening World economies. There is a right way to achieve these goals ... where people will not be hurt,
Oct 14, 2013 11:07AM
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I am happy to be an Independent during times like this. Both parties have politicians that claim they stand for certain ideals, but just do what it takes to get re-elected. This is their number one concern, not fixing the problems of the country. I will stay in the middle and not be sold and support false promises.
Oct 14, 2013 12:22PM
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This author has got it right. President Obama wants to rule the world. It is time for the American people to take back this country. We should not let President Obama get by with his tactics. This only proves that he will not compromise and he is not concerned with the livelihood of the American people or those in the world unless he gets his way. It is time to set aside difference between Democrats and Republicans and let all our voices be heard. The Affordable Care Act is illegal because it was suppose to be voted on by the PEOPLE OF THE UNITED STATES who are registered voters. So this Act has to go because the majority of the American people do not want this, and never wanted it.

President Obama is about lying to the American people and those leaders in the world. Presdent Obama needs to be IMPEACH for violating the AMERICAN PEOPLE'S RIGHT OF THE FREEDOM TO VOTE.  I believe with all my heart, and it doesn't matter what political stance you take, THAT AMERICANS LOVE THEIR COUNTRY AND BELIEVE IN THEIR FREEDOMS THAT MEN AND WOMEN DIED FOR.

We have a President that just says things to make this country do what he wants. This is not leadership and it is no way to run a country.  TAKE A STAND AMERICA AGAINST OBAMA AND MAKE HIM ABOLISH THE AFFORDABLE CARE ACT WE DIDN'T GET TO VOTE ON.

Oct 14, 2013 10:56AM
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now is the time for all good men to come to the aid of their country!!!!!  time to take the check book away from john k
Oct 14, 2013 12:06PM
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"because the position on the other side of the trade -- the Republican side -- is too difficult to understand."

It really is not that difficult to understand. There are two groups on the republican side. The career politician republicans who were brought on for the long haul with the direct purpose of "BETTERING the country" (this is up for debate whether either side is benefiting the country). Collaboration should be expected from these Republicans.

The other group are the Tea Party Republicans. There purpose is to CHANGE the country. They were voted in because they ran on a platform of lower taxes, lower spending, and smaller government. Many of them said that they were going to do whatever it took to change Washington. Now whether or not you agree with this philosophy, it is what it is. Why would they collaborate and try to meet half way with Democrats when they campaigned that they wouldn't. Hell, if this were the case they should of just voted normal Republicans in.

(I'm an Independent who does not support Republicans or Democrats)
Oct 14, 2013 12:53PM
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This says it all " From what we can tell, President Barack Obama's stance is that the debt ceiling must be raised, the government must be opened and nothing has to be given up."
Oct 14, 2013 10:44AM
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Reid and Boehner have given the market manipulators the soundbites they wanted on the debt ceiling ...  its as if they were working in collusion ...
Oct 14, 2013 12:22PM
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obuma is the best thing to happen for jimmy carter---obuma the anti-America muslum is now the worst excuse of  a USA president in history!! ----that said--watch--now I will get audited by the bum's irs cronies!

 

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