Fonzi vs Clint

If they don’t compromise, we are sunk.

By Jim Cramer Nov 8, 2012 9:53AM

thestreet LOGOWhich is more realistic: Conjuring a Happy Days Are Here Again Democratic Party or expecting the Outlaw Josey Wales part of the Republican party to vanish?

 

Right now I would say the next 1,000 to 2,000 Dow points rest on these curious visions of the future.

 

Let me explain.

 

First, there's some amorphous talk out there that the president, in his second term, will become more hospitable to big business, to the trigger pullers, to the corporations that have not had his ear. The idea is that there are enough companies out there that want to break bread with the president and there's enough give to the president in his second term that a new rapport, a new friendship, is about to break out.

 

Somehow, that Happy Days skein of thought is in the ether, and I have to tell you I don't understand it at all. Why does Obama have to compromise? What did he do to have to make peace or break bread with anyone? He won this victory by appealing solely to his constituency, which is growing much faster than the Republicans' constituency. I see him going the opposite. Big business doesn't want to play ball with him? To heck with them. Banks and bankers gave tens of millions of dollars to defeat him? Forget about them. Bury them. 

 

I saw nothing in this election that would make the relationship with business cozier. In fact, I think quite the opposite. Things are going to get chillier because he believes they aren't going to hire no matter what he does, or at least hire here.

 

The idea that he is suddenly going to make nice with the potential big hirers, the oil and gas and refining and chemicals businesses, because energy is so cheap? Good luck with that. The companies and leaders in those industries tried to bury him. They did everything they could to crush him. Now he is supposed to be magnanimous? Why? Would you be? I sure wouldn't be. Because of legacy? What's the legacy of the fossil-fuel gang in a Green Presidency.

The bankers and the oilmen were the big losers Tuesday night, and the stocks reflected it Wednesday. They can recover because they did well before when he disliked them and they will do well now when he dislikes them. But they won't ever have a friend in this White House.

 

Don't believe me? Consider this. In the first Obama campaign he received tens of millions of dollars from bankers and businesspeople, and he did little to help them. Then they turn on him, and now he's supposed to help them?

 

The president will not get you 1,000 or 2,000 more points on the Dow because of some new attitude. That attitude doesn't exist. Stop your dreaming.

 

Now the other side is more intriguing and more important. There's a battle for the soul of the Republican Party, and it is made up of people who fear losing their seats in Washington, D.C., verses the true believers, the guys who holed up with the Outlaw Josey Wales at the beginning of that fabulous movie. These are people who refuse to surrender when the War Between the States was over, because they never accepted that it was a lost cause and intended to fight on no matter what.

 

Call these people the Tea Partiers. They have no sense of self-preservation, because it doesn't intrigue them. What matters is the cause or causes.

 

I think the leadership of the GOP, whoever that might be right now -- let's call it John Boehner, because he's trying to lead -- is worried about losing in 2014. Boehner seems worried about not even being speaker. You have to figure that he and the party minions have figured out that if they can't sweep when unemployment is almost 8% they aren't ever going to sweep. The idea of throwing us into another recession where unemployment goes to 9% isn't necessarily a winning strategy if it didn't work at 8%.

 

So rational people would argue that you have to eliminate the Outlaw Josey Wales factors. I say factors because some of them have to do with social issues, which lost the votes of women. I don't know if the GOP can ever stop single-issue candidacies.

 

But the major Outlaw Josey Wales factor has to be dealt with, which is the perception that no matter what, rich people must not pay more taxes. That tenet, I believe, made it almost impossible for anyone who doesn't make a lot of money to vote GOP.

Put simply, the Tea Party was perceived as class warriors, not the Democrats. They were perceived as warriors carrying the plutocracy banner. The presidential candidate didn't help because I think the vast majority of people, including the considerable number who pay little or no federal income tax, can't believe that he paid little or no federal income tax.

 

These people are lost to the GOP. They went Democratic.

 

So here's what all of this comes down to. Does the GOP leadership realize that running on the principle that the rich should never have to pay more taxes is a LOSER? Does the leadership recognize that 90% of the country is being sacrificed for the right of the 10% to pay less?

 

Forget ideology. Forget what the government does with the money. Forget the bloated budget. Accept that without compromise we will fall over the fiscal cliff and back into recession and it will be man-made because the losing party didn't adjust.

 

No one is going to blame the winning party for not adjusting. It won, for heaven's sake.

 

The losers have to adjust. If they cast out the Josey-Wales lost-causers and stop defending the 10%, particularly the 1% that funded so much of their campaigns, then we go higher, much higher.

 

If they don't compromise we are sunk. The next 1,000 to 2,000 is down until we readjust to a worse economic world where we can't be the engine and China can't be the engine and Europe just splinters and falls apart. 

 

That's why, reluctantly, I can write 1,000 words on politics, and not stocks, and actually have it matter!

 

Jim Cramer's face

 

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust.

 

 

 

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31Comments
Nov 8, 2012 1:45PM
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Actually, Jim, I think a little of both is needed here.  Obama has to make an effort because it matters to him that he's seen as a conciliator, as the guy who TRIED, and the effort might just succeed -- at least a little.  He went to Harvard, for goodness' sake -- he's not a complete stranger to the world the one-percenters inhabit!  But you are correct that the Repubs have to move as well.  As Joe Scarborough said yesterday morning, the leadership has to eliminate the lunacy from their party or they are doomed, and so are the rest of us by extension.  The irony is that our politicians never learn from history: Extremism of any sort does not win elections in the US of A.  Never has, never will.  We the people want these guys to ditch the b.s. rhetoric and GET TO WORK, just like the regular citizens do every day of the week.  Enough.
Nov 8, 2012 1:44PM
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Best post you've had in a while. Excellent view from the political side.
Nov 8, 2012 1:49PM
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How can you say he did nothing for the banks? Under Obama's direction Ben was given another term at the Fed. and pumped 0% money into the banks, feeding them like slopping the pigs they are. The banks were given a lease on life despite their insolvency by allowing them to carry bad assets using a market to model instead of a market to market value accounting model. Otherwise they would have been forced to immediately deal with those bad assets and not carry them as performing good assets. The banks have shifted the burden of defaulted mortgages to every citizen of this country with these policies, and the institutions continue to speculate and create market bubbles.
Nov 8, 2012 1:44PM
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The Repubs still arn`t smart enough to know they got their butts beat.They supported a lying

corporate raider.I`m a lot better off than I was four years ago.It`s all about having an education.

If the far right wants to waste their time listening to Rush and watching nascar:go ahead.

Nov 8, 2012 12:23PM
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Impossible to vote for the Republican? Romney got 49% of the vote.
Nov 8, 2012 1:52PM
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OBAMA WON THE PRESIDENCY AND EACH CONGRESSMAN WON IN HIS DISTRICT THAT REPRESENT A SMALLER SIMILARLY INTERESTED GROUP. THE PRESIDENT HAS TO FIGURE OUT HOW TO COMPROMISE WITH ALMOST 1/2 OF THE POPULATION AND 200+ CONGRESSMEN...MORE THAN 1/2 OF CONGRESS FOR THOSE COUNTING. ITS ABOUT CHECKS AND BALANCES. THEY MUST WORK TOGETHER.  HE IS THE LEADER AND NEEDS TO LEAD BY EXAMPLE AND WORK WITH BOTH SIDES AND STOP DICTATING. KRAMER SAID HE WON. YES HE DID BUT IF HE...OUR LEADER DOESN'T LEARN TO COMPROMISE THEN...WE THE PEOPLE WILL LOSE.
Nov 8, 2012 5:15PM
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Probably the best political commentary I've read in a long time.  If Republicans can't win a Presidential election with unemployment at 8%, and can't figure out they need to start putting the interests of the country first and the 1% second, they deserve to become an irrelevant footnote to history rather than a viable alternative to Democrats.  And if that happens who steps in, the Tea Partiers?  God forbid.  
Nov 8, 2012 1:43PM
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I think Cramer got it right this time, even though I think most of his stock picks suck or he is selling something.
Nov 8, 2012 5:32PM
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Juiceman175:  Compromise is when a president offers a budget plan that cuts 4 trillion with 6 dollars of cuts for each dollar raised on the rich. Republicans said they wouldn't accept any plan that raised one penny in  taxes on the rich even at a ratio of 20 to 1. Trying to paint Obama as the one unwilling to compromise shows ignorance. I finally agree with Cramer on one of his comments.
Nov 8, 2012 6:07PM
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What Obama needs to do is put things out in the open. If the GOP refuses to compromise again, he needs to tell the public what they're doing.

 

The DEMS need to at least propose a budget, or propose raising taxes, and let the GOP fillibuster themselves out of a job.

 

The GOP stonewalled the last 4 years, and now they say Obama needs to reach across the aisle??? WTF????

 

Eat crow GOP, you lost.

Nov 8, 2012 6:25PM
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Jim, give it up. The stock market is a fools investment at this point in our history. Obama wants to nearly triple the tax on dividends and hates all business that is not green. The only good investments are in emerging markets or outside the USA.
We are headed full speed into a downgrade and the market will be tanking soon. If you are a real cowboy, and want to throw caution, and your money, to the wind...be sure you have lots of antacids near by. 
I am always mystified by the educated and wealthy Obama supporter. Then it was explained to me that since they have already climbed the ladder of success, they just want to pull it up so others cannot join them at the top. 

Nov 8, 2012 5:48PM
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Hey cramer can you tell your FREE MARKET CAPITALIST CNBC buddy Bilbo Baggins Kaminsky that it's not cool to bitch about govt, getting your power back on quick enough for you .......I thought you types did not like govt intervention ....if you were a true FMC why don't youo pay more for power ....db
Nov 8, 2012 5:49PM
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This makes sense to me. I did not support Obama. But I NEVER agreed with repub tax policy. Look, President Obama won fair and square. Romney was a terrible candidate. It's time for the repubs to work with the President, tear up their no new tax pledge and give the President the props he deserves. The only way for the repubs to survive is to work closely with the President, give him even more than they think possible and hope the Presidents plan works. Two options. 1) Keep playing the same game and take the hit if the economy does not improve or  2) Give the President what he wants and lay the future of the economy at his feet.
Nov 8, 2012 8:31PM
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This was the biggest load of crap I have ever read. Obama lost 10 million voters compared to 2008. Over 3 million republicans refused to go out and vote because the "republican" establishment put up another big government democrat. Why must the republicans compromise? The democrats never compromise, but always bitch that the republicans are not caving fast enough for them. 
Nov 8, 2012 6:34PM
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As bad as it may be there will be no compromise.  Mr. Obama believes compromise means doing things his way and the republicans are stuck on the belief that tax policy is stunting business.  The truth is clearly somewhere else, looking at balance sheets most businesses have surplus cash for investment but are not investing.  If they are making solid profits with the current tax situation, one might assume its not the regulations that are affecting them.

 

No one wants to expand because they don't need to, as long as they have a product that is making money and new products on line to come out why invest in new plant?

 

It is going to be a long cold winter.

Nov 8, 2012 6:31PM
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 The Repubs have not had a strong canidate in the last 2 elections and got there BUTTS KICKED both times and until the Repubs get a good canidate that knows what they are really doing, They couldn't even answer questions on the debates like toddlers trying to walk. We need some one that understands Business and Really cares for the People of the United States, our Rights, our Beleifs,and will Put His Hand Over His HEART for the PLEDGE and NATIONAL ANTHEM. We have a DICTATOR in OUR WHITE HOUSE. This is OUR COUNTRY and we are letting the government Dictate to us, They should be there for US not Bend Over and no LUBE
Nov 8, 2012 2:09PM
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Actually, Jim, the President does have to compromise. 

He won by a narrow margin in the popular vote; so clearly his agenda is not supported by close to half of all voters.

Hopefully it won't be too late for us to dig out of his spending hole in 4 years.

Nov 8, 2012 2:14PM
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Cramer is a psuedo intellectual BS'er. Plainly speaking, the Republicans DIDN'T get out their base -  Romney received less votes than McCain did.  Also too many people are expecting the government to give them something and Obama wins hands down in who is more likely to do that.  I love these lines... "  Forget ideology. Forget what the government does with the money. "

 

THAT'S  THE WHOLE  FREAKING POINT OF EVERYTHING !!! 

 

"No one is going to blame the winning party for not adjusting. It won for heavens sake. The losers have to adjust "

 

SO MR. CRAMER... COMPROMISE IS ONLY FOR THE REPUBLICAN PARTY TO DO ??

 

Where is the talk of fiscal sanity from the Democrats - who among them is warning of the catastrophe that awaits the United States if these deficits are not brought under control ??

Frankly, if Obama and the left got whatever they wanted from the "rich", as far as an increase in taxes go, they would spend it on some program and not for deficit reduction. WE ARE SUNK CRAMER... AND IT WON'T BE BECAUSE THE REPUBLICANS DON'T COMPROMISE. DO YOU SEE THOSE NICE PICTURES FROM GREECE - THEY'RE COMING TO THE US SOON !!!!!

 

 

Nov 8, 2012 9:04PM
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I just don't understand why anyone believes that by taxing the 1% it will solve our deficit and financial problems.  Again the middle class will bear the burden through high taxes, higher costs for products, healthcare, and energy.  The next 4 years should pretty much kill what is left of the middle class.  The wealthy and politicians will have plenty of money to take care of themselves.  The middle class will be gone and unable to pay for the entitlement class and we can join the ranks of Greece, Spain and most of Europe. 

Nov 8, 2012 5:50PM
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Oh and tell santelli he looks like alfred e neuman from MAD magazine .....he also has about charisma as the paper MAD was printed on .......

As for the money phoney bartiromo ......well I hope you are not crying yourselves to sleep after tuesday night !
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