Tuesday, October 21, 2008

Is Obama's Poll Strength a Chicken or an Egg?

The overwhelming consensus suggests that as the financial crisis has unfolded, and as the stock market has tanked, Obama has gained substantially in the polls.

There is certainly a great amount of truth in the analysis, especially in the early days of the financial crisis. But that may not be the entire story. As this financial abyss widens, and as I sit here today watching the Dow fall yet again by hundreds of points, I am beginning to wonder if there is not also something else going on.

I would suspect that a great percentage of people and institutions who are causing the fall of equity markets today are reasonably sophisticated financially. This is especially so if a good portion of the movement in equities is, as has been suggested in many financial publications, due to massive redemptions in hedge funds.

The implications of Obama's "spread the wealth" philosophy are anathema to the health of corporations and the robustness of financial markets. The implementation of Obama's worldview would result in the institutionalization of high unemployment and low growth rates.

Is it not possible that we are seeing, right now in the equity markets, a reaction to a general consensus that Obama is going to win this election? The market may be tanking because it thinks Obama's going to win. While Obama may have benefited from the beginning of this financial mess, we are all suffering greater financial distress because of Obama's benefit.

What cruel irony!

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