Trader’s Narrative

Somehow, for some strange reason a progressive tax system which is what the US has had and which it will continue to have, has been called a “socialist” system by the McCain campaign:

“His (Obama’s) plans are redistribution of wealth.. that is one of the tenets of socialism.”

But as anyone will readily attest, a progressive tax system does exactly that, it “spreads the wealth around”. The only question which the government and candidates haggle over is not if wealth will be spread around, but how much.

By now Obama and McCain’s tax plans have both been picked cleaner than a carcass by a pack of economists from both sides of the spectrum. There is unanimous consensus that Obama’s tax plans will give more money to lower income earners and tax the wealthy a little more. Take a look at this excellent visualization for more details (courtesy of ChartJunk)

So is taxing the wealthy a tad more a bad thing?

John McCain doesn’t think so. Or at least, didn’t used to think so.

Listen as he answer’s a young woman’s question in this following video. She even brings up the “S” word (socialism) and McCain rightfully bats it down graciously.

“When you reach a certain level of comfort, there is nothing wrong with paying somewhat more”

“I think the first people that deserve a tax cut are working Americans with children…”

Where did this McCain go? This version would have stood a chance of actually winning against Obama. This version wouldn’t have given more tax cuts to millionaires while ignoring “working Americans” as his current tax plan does.

Look, I consider myself a capitalist through and through. Having said that, it doesn’t take a genius to see the inherent problem that concentration of wealth presents to any society. We are not a collection of individuals, we are a community, a society and we need to understand that. What is best for 0.1% of the wealthiest shouldn’t be ahead of what is best for the 99% of the rest of society.

For this and (many) other reasons, I’m saddened that as a non-US citizen I can not take part in this US election and vote for Barack Obama.

Rove could teach Machiavelli a few tricks. But he isn’t infallible by any stretch of the imagination. In classic Rovian style, he brought in Sarah Palin to persuade disenfranchised Hillary Clinton supporters to vote for the McCain ticket. He knows that the GOP desperately need the woman’s vote to stand a chance in this election:

As one McCain aide put it: “We either get Hillary’s voters and we win, or we don’t. It’s not a mystery.” Said another: “This campaign is all about the middle.”

But he accomplished more than that. With Palin, he also makes it politically incorrect for either Obama or Biden to go after McCain’s VP because she is a woman. It would look unseemly to have two seasoned, eloquent politicians wipe the floor with an attractive mother of five who has no experience and no relevant qualifications.

Here is an easy way for the Democrats to checkmate Rove’s move: Have Hillary Clinton rip Sarah Palin apart.

She is more than capable. If she devotes half the tenacity she showed in the Democratic party nomination process, Palin doesn’t stand a chance.

She is the only person who can do this. Not only is she the right gender, she is eminently more qualified, experienced and educated. If I were advising Obama, I’d have him suggest the possibility of an appointment, say, Secretary of State - depending on how well Hillary demolishes Palin in the run up.

Oh, and by the way, three years ago we were told that Katrina was God’s punishment for all the sin in New Orleans. So how are we to interpret Gustav interfering with the GOP convention this year?

Unless you’ve been hiding under a rock, you know 2008 is an election year in the US. Will it be Hillary? Obama? Romney? Huckabee? When it comes to the stock market, it may not matter. Just the fact that this is an election year should put a smile on your face.

Like the 4 year cycle, an election year is a powerful cyclical pattern in the market:

So far this year, we’ve stumbled out of the gate. OK, more like tripped on our laces and landed square on our collective noses. But according to the election year seasonality, that’s in line with other years.

In fact, we could be in for more pain all the way to the summer. But as we get closer to November 4th, 2008, the market should pick up steam. Or rather, more accurately put, it has performed better in the past.

So even though we can’t count on the boost of the four year cycle this year, we have this to look forward to. It almost makes it worthwhile to sit through all those political TV ads, doesn’t it?