The Long Road Home

Stocks plummeted again today. The Dow Jones Industrial Average sank over 200 points to finish at 6600. That's its lowest close since April 15, 1997. 15 months of recession and no bottom yet.

Wait--I'm not even to the bad news yet. The bad news, as Jason Zweig wrote in last week's Wall Street Journal, is that the road back from a calamitous recession like this can be long and filled with potholes.

In his piece, Zweig describes the work of finance guru Elroy Dimson of the London School of Economics. Professor Dimson and two colleagues studied 17 stock markets from around the world, going all the way back to 1900. Their takeaway: We'll have to wait another 9 years before the Dow has even a 50/50 chance of getting back to where it was two years ago.

If you're looking for some advice on what to do in this market, good luck. Prof. Dimson's conclusion: It's pretty much hopeless.

A double whammy awaits your IRA or 401(k). First, stocks have lost a great deal of their value. Some portfolios are down 30% or more. But second, when stocks to begin to appreciate, don't look for the tremendous increases of the past decade. Having suffered third degree burns on equities in this recession, investors will be leery of stocks. The result: slow appreciation of value.

Let's add a third whammy. As you read this, the government is inking the presses, printing banknotes to cover the record spending spree that the President and the mob in Congress are engaged in. The result will certainly be rampant inflation. So those stocks you bought with 1988 dollars, believing that they always appreciate in value? They'll be worth a lot less in 2009 or 2010 dollars. If you try to cash out of the market, the value each dollar you receive will be less than the real value of each dollar you paid.

Nobody here gets off without blame. Not the Republican president who presided over the biggest growth of entitlement spending in the history of the Republic. Not the Republican Congress who squandered the trust of a nation on an orgy of earmarks and corruption. Certainly not the Democrat Congress which has seen the economy tank virtually since the day it reclaimed the legislative branch from the Republicans. And most of all the current president who hijacked his party's nomination as an English speaking Hugo Chavez populist, then masqueraded as a somber, statesman-like centrist to win the presidency, and now presides over the country's rapid decline, which he has neither the experience to the aptitude to stop.

Just thought you might like to know.

Fascism You Can Believe In

Fascism is an authoritarian ideology marked by the following beliefs:

• A single party state
• Subordination of the individual to a central government
• Centralization of authority
• Reliance on central government for national solutions and services
• Opposition to conservatism, capitalism and entrepreneurship

I bring this up because virtually unnoticed this week, amid the political background noise of Roland Burris and Al Franken, the House of Representatives (actually the Democrat majority) adopted their House Rules for the 111th Congress. Included in these Rules are significant changes from the past. These changes say a lot about the Democrat majority and where this country is headed over the next several years.

The changes include:

• Elimination of term limits for committee chairmen. No longer will chairmen be elected on merit. Now the old leftist bulls who came to Washington in the radical '60s and '70s will be in charge again.


• Suspension of cost-containment measures for Medicare. Medicare is the fastest rising entitlement program. Now there are no controls on it, paving the way for socialized medicine.


• Fast track tax increases. Gone is the ability for the minority (Republicans) to strike any tax increase that does not have a corresponding way to make up the lost revenue.


• Virtual elimination of any chance for tax cuts so long as this gang is in power. The only way to pass a tax cut now will be to propose a tax increase somewhere else in the budget. In effect you can change taxes but you can't lower them. Call it permanent taxation.


• Elimination of the "motion to recommit" tactic. This little-known procedure is a cherished right of House Members. It has been in effect, supported by both Democrats and Republicans, for more than a century! It gives the minority party one last chance to work out a compromise with the majority party before a bill is passed. Speaker Nancy Pelosi has eliminated this hallmark of the two-party system in order to jam her leftist agenda down the throat of House members.

Before my leftist friends accuse me of over-reacting by using the F-word, please look at what these changes mean a few things for the House and for the country:

1. There is little stopping Congress now from taking a new, sharp tack to the left. This includes socialized medicine, expansion of entitlement programs on a scale not seen since Lyndon Johnson, neutering of our military and intelligence capabilities, and punitive taxation of those people who have supported this country for so long.
2. All of those pro-life, pro-Second Amendment, pro-defense Democrat Members recruited by party leaders over the last two election cycles so the Democrats in could take control of Congress have been duped. They have no pull in a Congress controlled by Nancy Pelosi, Barney Frank, Charlie Rangel and Henry Waxman They're simply the Chorus in this Greek tragedy.
3. All of those conservatives and centrists who voted for "change" in the last election, will probably end up with more change that they bargained for. The mischief the Pelosi gang can cause over the next two or four years will take years to unravel, if it ever can be unraveled.

Just thought you might like to know.