Dear Igor, I'm supporting Obama, but my husband says I'm unrealistic: Wall Street will never let him win. Is this paranoia or fact? Hopeful, Chimera, Pa
EDITOR of paranoiaisfact.com, Igor Yopsvoyomatsky, answers readers' questions
This is paranoia. The fact is that Obama is the fair-haired boy of the super-rich. They are audaciously plotting to change the regime and install him as their standard bearer.
Why, you might ask?
Because the Bush administration has abjectly failed to protect their wealth and privilege.
Newton's Third Law states: "Every action has an equal and opposite reaction."
The theory of Reaganomics was that the wealth accumulated in the cisterns of the very rich would "trickle down" into the tin cups of working classes. Now this has been reversed: the poverty of working classes is "trickling up" to infect the very rich.
Corporate profits are decreasing. "This will be the first year since 2001 that domestic profits are down," says Robert Barbera, chief economist for ITG (Investment Technology Group.
Wall Street shed 7600 high paying jobs in the first quarter of 2008. More "pain" is forecast as banks retrench, hedge funds shut down and private equity reneges on deals because of inability to raise capital.
Populist anger has forced regulators to suspend, price-fixing, "naked" short sales and insider trading schemes, which had made billions of dollars for "barely legal" investors and were immediately sheltered in off shore tax havens.
Corporate executives are being publicly humiliated by dismissals, law suits and indictments
The rich just aren't having as much fun as they used to and they blame Bush.
The National Marine Manufacturers Association announced that yacht sales in 2007 suffered their largest decline in more than a decade.
Luxury jeweler Tiffany reported a 19% drop in profits for the last quarter of '07.
Minks and sables are being offered at 40% discount by desperate retailers.
High end real estate values are plunging. "Upscale foreclosures are a growing trend," says Florida real estate consultant Jack McCabe . In bubble markets like Las Vegas, Miami and Orange County California, mansions are being abandoned..."This is just the tip of the iceberg," McCabe says.
Domestic discord is suddenly roiling the lives of the rich.
A survey reported in the Economist predicted an "upsurge" in divorces among "high-earners" in the major financial centers. Wives are hurrying to dissolve marriages to lock in big settlements before their husbands' fortunes are wiped out. Both parties will want to sell community property--houses, cars, boats--before they lose value.
Out of a job, facing indictment, their houses gone, their wives frolicking with the pool man, these angry plutocrats know who to blame---George W. Bush.
All of the Bush schemes have backfired.
The price of oil has increased 1000% since his 2001 inauguration and oil companies have consistently declared higher profits every quarter of his presidency. But the trillions spent in Iraq and the fallout from the credit crisis have devalued the US dollar, diluting their profits. In addition the price of gasoline has risen so high that the American consumer, known as "John Q. Sucker" in certain quarters, has stopped driving and is demanding alternate sources of energy. Big oil is stuck with a sudden surplus that nobody wants. Speculators are pricing oil at $70 a barrel oil by 2011.
The Bush Fed under Ayn Rand acolyte Alan Greenspan had a clever plan: lend money to "ninjas" (no income, no job all stars.) Then, when they defaulted in the booming real estate market, the banks would repossess a property worth more than its mortgage. But the market plunged, leading to foreclosures on worthless property, causing big losses to banks.
Hell hath no fury like a banker who can't pay his greens fees or get his boat in the water for the club regatta.
Obama has sent discreet signals that he feels Corporate America's pain. He has voted for tort reform and to protect telecoms against lawsuits by private citizens. He even floated a plan to give tax incentives to companies that kept jobs in the US.
The formerly fat cats have reciprocated with discreet contributions and clever sabotage . Their most brilliant move has been to invite Vice-president Cheney to address the GOP convention. The site of thousands of protesters being clubbed, maced and run down by mounted policemen will be broadcast instantaneously around the world and will doom McCain's already faltering candidacy.
So don't worry, Hopeful. Obama will win. He will help the merchant princes regain their regal status. And if you stay in your place and hold out your hand, you might catch a few crumbs as well.
Causes Heywood Gould Supports
Leukemia and Lymphomia Association
American Cancer Society
St. Jude's Children Research Hospital