As Adam Smith remarked, a country can bear a lot of ruin (ie, a lot of damage from government policies). And I had been assuming O's second term would be largely ineffective due to his lame duck status, the Republican House, and the country's and even the media's becoming bored by and turning against O the way it eventually did with Jimmy Carter.

But now we have (i) O's hard-line, no-compromise inaugural address, (ii) clear indication O's policies will be implemented by executive order rather than attempts to pass laws through Congress (eg, earlier announced non-enforcement of laws dealing with illegal immigrants; last week's gun control measures; budget and debt ceiling measures; today's announcement the long-standing ban will be lifted on women in combat), (iii) the Republicans' total wimpiness and ineffectiveness in countering or standing up to O, and (iv) the public and the media seemingly loving it all and just wanting more (as one tiny example, the very popular Phil Mickelson having to apologize for a fairly mild statement about his work incentive under a 60% combined Fed and Calif service rate).

I know the stock market is very smart, far smarter than any individual theorist like me. But I have to ask, is the market discounting all that will be coming from the administration during the next four years? O's second term is only two days old and look what we have so far. Four years of it can perhaps be a lot more ruin than Adam Smith could imagine in smaller, less sweeping governmental days.





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