Economics guru predicts Obama would lose

By Frank Wenceslao

I HAD an enlightening conversation with a friend from U.P. who stopped over in LA on the way home. After years with the World Bank he’s now with a Washington DC think tank. He told me President Obama blew enormous political capital from his 2008 landslide that he may not be reelected.


My friend further said that people who voted for Obama in 2008 feel insulted when asked if they’d vote for him again. In fact, my friend is ashamed to admit voting for Obama and failing to recognize his gross inexperience and cluelessness of the workings of the U.S. political-economy. Obama’s 2008 supporters are vocal they’d be doubly stupid to vote for him again.


They rely on historical precedents why Obama is toast. No U.S. president ever won a second term with his dismal economic record of 9% unemployment, over $4 trillion budget deficit and $15 trillion national debt in his first term expected to be carried through 2012. I was told Obama would be in a worse position compared to President George H.W. Bush whose approval rating hovered at about 90% after driving Saddam Hussein out of Kuwait with minimum loss of American lives, yet this favorability banished in six months to lose the 1992 election to Bill Clinton based on the latter’s bumper sticker. “It’s the economy, stupid.”


With no foreign policy success except the killing of Osama bin Laden and Anwar aw-Alawki likely to be overshadowed if Egypt and Libya were lost to Muslim Brotherhood and Sharia law, Obama can’t win with only the support of his liberal base and African Americans without the Democratic Party’s moderates or so-called “Reagan Democrats” likely to stay home and even now avoiding to be identified with Obama, or they’d vote with the independents for the GOP nominee.


In addition to dismal economic record, Obama has corruption scandals like barnacles around his neck. The Chicago Tribune has reported that Antoin  “Tony” Rezko was sentenced Tuesday (11/22) to 10 years in prison for extorting millions of dollars from firms seeking state business or regulatory approval. Although Rezko’s crimes were committed while a top fundraiser and adviser to Illinois politicians, only Gov. Rod Blagojevich was mentioned and not President Obama when yet Illinois state senator.


However, it’s rumored that had Rezko been asked to testify against Blago, he’d be open to cross-examination by defense counsel and Rezko’s relationship with Obama and his political career would’ve been more than that with Blago. According to Donald Trump, Obama’s deal was with Rezko smelled like rotten cheese when the latter bought an adjoining lot, sold almost half of it at less than market price to Obama to expand his Chicago house and lot.


Rezko was convicted by a federal jury of extorting millions of dollars from firms seeking state business or regulatory approval while he was a Blagojevich confidant. More than two years later, in October 2010, he pleaded guilty to wire fraud over the bogus sale of his pizza restaurants. He still faces sentencing for that conviction as well.


Surely, Obama’s relationship with Rezko as well as with Rev. Jeremiah Wright and unrepentant terrorist Bill Ayers for which the president got a pass in 2008 from the mainstream media would be widely examined because if it’s true that his campaign would be mainly to demonize his GOP opponent, it takes two to tango. Obama’s personal and official records will naturally be opened up and examined through a microscope that will include the scandals during his administration.


They include Solyndra and at least three other green projects that altogether have caused the loss of $3.5 billion of the $800-billion stimulus package. Surely, many of the 16 million jobless and 9 million underemployed Americans were looking at the stimulus package to return to work.


The New York Times reported that Solyndra, a California-based solar panel manufacturer, declared bankruptcy in August 2011 after having received $528 million in federal loan guarantees. But the failure of Solyndra which could cost taxpayers more than a half-billion dollars has renewed the highly partisan debate in Washington over the benefits or failings of Obama’s stimulus program and the wisdom of clean energy subsidies in general.


Solyndra’s problem, according to analysts, was that the product looked better when it was conceived on paper than when it hit the market. Solyndra’s design avoided the use of silicon, a commodity that was selling at very high prices in 2009 when the loan guarantee was approved but that since crashed.


The design also sought to cut costs with an innovative cylindrical design that reduced the labor required for installation. But the capital costs for manufacturing were high. At the same time, Chinese companies had ramped up their output, flooding the market and pushing down the price of solar equipment at a time when slack demand in Europe contributed to a surplus.


Solyndra became one of the administration’s most costly fumbles after the company declared bankruptcy and lay off 1,100 workers and was raided by FBI agents seeking evidence of possible fraud.

Although the government in such programs typically guarantees loans made to a company by a commercial bank, this was not the case for Solyndra. It borrowed the money from the Federal Financing Bank, part of the Treasury Department; in effect the government was lending the money to the company directly. The Energy Department gave Solyndra a conditional guarantee for $535 million, in multiple stages, contingent on reaching a variety of milestones, and it had received $528 million before going under.


The Solyndra loan guarantee was the Obama administration’s first. The administration, seeking to forge a  “clean energy” economy and provide jobs in the face of a growing recession, picked the project partly because it’s what government officials were then fond of calling  “shovel ready.” The government’s backing of Solyndra came as the politically well-connected business began an extensive lobbying campaign that appears to have blinded government officials to the company’s financial condition and the risks of the investment, according to a review of government documents and interviews with administration officials and industry analysts.


Of course, there’s the Justice Department’s and Bureau of Alcohol, Tobacco and Firearms’ botched “Operation Fast and Furious” attributed to have led to the death of Border Patrol officer and Iraq veteran Brian Perry.


In summary, my friend justified his prediction that Obama won’t be reelected. He said there’s no way the president would win if swing states such as Ohio, Florida, Nevada, Michigan, Pennsylvania, Virginia, Iowa, Missouri and Wisconsin had each 500,000 unemployed and underemployed. They won’t vote for Obama if he’d promise again to do what he’s failed to achieve during his first term and his strategy is only to demonize his GOP opponent for some past mistakes that may not happen again and matching his “do-nothing” administration with a “do-nothing” Congress when the Senate is still controlled by his party whose Majority Leader invariably follows his wishes.


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