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Varchild2008 (84.35)

Obama the Brilliant Supply Side Economist



December 08, 2008 – Comments (2) | RELATED TICKERS: SNHY , GENC , MSM

Why are the markets trading up today?  I'll tell why.  It's because President Elect Barack Obama is an absolute Genius.. Actually he's just a teleprompter that gets his Ques from people smarter than him.  But, he's got lots of brilliant people surrouding him to shape his economic plan to what works.

The markets are trading up broad based because I challenge anyone to come up with a sector of the economy that will NOT BENEFIT from Obama's Brilliant Infrastructure Spending Strategy.

Hey... I am a conservative Republican in the fashion of Rush Limbaugh/Sean Hannity.  

I don't believe in anything but Supply Side economics.  But let's face it...  No matter what administration you have in power, they both want to fund money to fix our Roads and Bridges right?

But only OBAMA wants to turn this simple idea into a brilliant strategy to lift America out of recession.  Granted... I don't think this alone gets us out of recession.... I think it's a temporary fix to the unemployment numbers...  And there's plenty to whine about regarding the communistic aspect of it all... But focus on the trickle down, supply side, effect of infrastructure spending and you can not stop from grinning if you are a Wall Street investor with shares in an Indunstrial company today. 

Here's the trickle down supply side effect coming:

1)  Bridges are built and Steel Companys line up to take the Fed contract money.  Are jobs created? maybe....maybe not.... Track record shows that existing employees are more frequently used rather than hiring new ones.  But the company itself is able to increase production, open up factories, and start fixing those bridges.

2) Cement is needed for Roads and Bridges right?   Companys like (GENC) Genco Corp. are going to benefit from all of this.  And not surprising GENC is up huge today!

3) As these roads and bridges are built, tools will break and parts will need to be replaced..... Supplies need to be ordered... hmm....  well...

(FAST) Fastenal
(MSM) MSC Industrial Direct
Ad Nauesum are up HUGE today!

4) As companys are out in the heat of Spring/Summer/Fall fixing up stuff...Guess what?  They get hungry and thirsty and thus buy Food and Beverages...Bottled Water....Etc.

All of your confectionary companys are UP HUGE today!

5) If there's job security (even if no new hires are created) then the employees feel safe to spend their cash.....on what?  On anything!  Clothes....Technology....   NASDAQ skyrockets today!

6) Retail Sector sells the stuff these newly confident construction workers want for their familys and guess what?  BAM!  Retail sector up huge!

So all the whining and moaning about how construction spending creates 0 jobs....does 0 to the economy from conservative Republicans upset for losing the election are ignoring something key....Something brilliant.

Supply Side Economics is about tax cutting the rich with the intent to indirectly effect positively the poor.

Isn't that what happens with Obama's plan?  Spend in construction to positive effect everyone else?
So even if no new hires happen..unemployment remains high.... Those numbers over the long haul will come down as the trickle down effect of Supply Side Economics takes hold.

Of course...Obama needs to halt is Tax Hikes for this plan to really, really, shine.

2 Comments – Post Your Own

#1) On December 08, 2008 at 12:03 PM, Gemini846 (34.49) wrote:

Basically you are saying that spending money we don't have to build bridges and roads > spending money we don't have to bail out banks.

Ok. I'll buy that lol. At least we know these ppl will actually spend the money (and likley spend 2x as much).

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#2) On December 08, 2008 at 2:22 PM, Varchild2008 (84.35) wrote:

Well yes. I'm not a big fan of throwing money around here... Don't misunderstand...

Even F.D.R. said his spending was meant to be temporary.  And my post was intended to leave a little leg room for criticism of Obama because I don't think he's the type who will shut off the Spending Valve once he opens it.  That IS damaging to the economy.

But, if we can get the Steel Companys and Construction Workers back to work for a couple years and the trickle effect occurs then Obama CAN shut off the spending valve and let the Free Market sort itself out.

of course many argue that spending just delays the markets ability to fix itself and rather than help the economy long term, all you do is produce a facade of economic growth for a few short years.

So.. there's plenty to be worried here regarding this plan of his..But, I think the advantages of getting people back to work outweigh the risk in this one...for now.

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