Yesterday Europe unveiled a rather crude two-step plan for solving its financial crisis. Step 1: Agree to dump a ton of money into the markets in order to create unnaturally low prices for worthless debt. Step 2: Redefine “default” by putting the word “selective” in front of it. Unless I’m losing something in translation, which is entirely possible, step 1 is essentially what I’m calling “Euro-TARP.” And step 2 is akin to redefining “deadbeat” to only refer to those who refuse to pay any and all debt. For instance a deadbeat dad could only be deemed such if he failed to pay child support and rent, his cable bill, his bookie, his drug dealer and whomever else he owes. So I believe it was a great day for European deadbeats.
Illogical or not, at least Europe has unveiled a strategy. It’s more than America can say.
Brian Belski, Chief Investment Stategist at Oppenheimer, says U.S. lawmakers should be going a little European sometime soon. “We need a plan…whether it’s from the left or the right or whoever, let’s just see a plan and, more importantly, how we’re going to enact it,” says Belski.
Belski wants clarity, the more the better. He wants answers to questions such as, “Is my after-tax pay going to drop by 20% or is my kid’s teacher going to be forced to live in a van by the river?” The nervousness on Wall Street, currently masked by a rally in stocks, stems from the realization that such logical clarity from Washington is a pipe dream. In the real world anything taking a U.S. debt (NYSE:TLT) downgrade out of play would be close enough for now.
What kind of deal would go beyond “good enough?”
For Belski it would start with anything seemingly sustainable enough for us not to be dealing with this same mess “in six months.” That’s Brian’s American version of a Step 1. The next item on his wish list is fiscal, not monetary, stimulus. “Fiscal stimulus is providing more clarity on tax cuts for corporations”, he says, baring his ribs to accept the spears of more Left-leaning viewers. “Let’s call them incentives for hiring,” he says.
Like me, Belski is one of those wacky idealists who believes having citizens gainfully employed would help our economic situation. “What we need to do in this country is create [tax] revenue. How to create revenue is create jobs,” he offers in an apparent effort to secure my vote in a future political campaign. Belski says American corporations are the “best positioned in the world for the next 10 years” and logically concludes that the best-positioned players in America’s theater of the absurd ought to be “leaned-on” to get us back to work.
All of this makes sense to the point that it raises the question, “Can DC possibly get something such as this passed?”
“Sure we can!” says our plucky guest. While I don’t share his optimism, I emphatically agree with his opening point: Please, oh, please, all-powerful politicians we were silly enough to elect, just give us some sort of plan. It really is the least DC could do and it beats the heck out of the nothing we have now.
Breakout is a YahooFinance production.