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American Voters Will Surprise Political Operatives

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- Socio-Political Commentary -

July 13, 2011 (FinancialWire) (By "The Political Prophet"(R)) -- Editor's note: Socio-political events and developments have a direct impact on the market. In the interest of providing shareholders and investors with a broad spectrum of information in regard to such potentially impactful occurrences, FinancialWire(tm) contributor, "The Political Prophet"(R), offers advanced insight with potential ramifications for virtually the entire market spectrum, perhaps best represented by bellwether-type ETFs such as the Health Care Select Sector SPDR ETF (NYSE: XLV), the Market Vectors Agribusiness ETF (NYSE: MOO), the SPDR Gold Trust (NYSE: GLD), the iPath Goldman Sachs Crude Oil ETF (NYSE: OIL), the iShares Dow Jones US Real Estate ETF (NYSE: IYR), the PowerShares Global Progressive Transportation Portfolio ETF (NASDAQ: PTRP), the Claymore U.S. Capital Markets Bond ETF (NYSE: UBD), the Technology Select Sector SPDR ETF (NYSE: XLK), the Industrial Select Sector SPDR ETF (NYSE: XLI) and the PowerShares DB US Dollar Index Bullish Fund (NYSE: UUP), to name just a few. To that end, here's the latest entry from FinancialWire contributor, "The Political Prophet"(R):

The outcome of the debate on the debt ceiling, spending cuts, deficit spending as well as the size and scope of our federal government will ultimately determine the job creation environment in America for the future. The current give-and-take is very volatile, so accurately predicting actions and outcomes with precision is especially challenging right now. We will, however, do our best to give our readers insights they can rely on today.

We Predict: American voters will surprise many political operatives with their understanding and intuitive grasp of economic issues leading up to the 2012 elections.

Republicans will benefit at the ballot box in direct proportion to the growth of such understanding. They can help themselves by using direct communications techniques that are meaningful to voters in general and to Independent voters in particular.

For example: A tax increase is the "price" Democrats demand for allowing Republicans to save and repair the economy so new jobs can be created. The GOP wants to cut government spending, move toward a balanced budget and prevent defaults on America's debts. Spending cuts are economic necessities. President Obama's demand for a tax increase is purely political. In fact, when powerful people like the President, Majority Leader Reid and Minority Leader Pelosi advocate new tax increases, it immediately hurts our efforts to assure small business owners and investors that now is a good time to grow jobs. Millions of Americans already understand or intuitively sense that tax hikes would be counter-productive for the job creation effort. Obama has not tried to claim that his tax increases would create even one new job.

Obama's characterization of his tax increase as "balanced" is silly. If you need apples, you don't go to the store for oranges. Tax hikes are not what we need in this economy because they would hurt our job creation efforts. Compromise that forces a negative component into the economy right now would devastate millions of Americans who are looking for work or who are underemployed and the small business owners who want to grow would be stopped in their tracks. Shamefully, Obama has admitted publicly that he needs to use the tax increases as bait to keep the most radical elements of his political party happy.

We Predict: Now that it is clear that Obama plans to hold on to his tax increase plans until the last minute, some Republican members of Congress will demand to know why the administration didn't enact the new tax legislation during the two years Democrats had complete control of the government. It is obvious that Obama is using the tax increase threat as leverage against the Republicans. It is not a serious policy proposal that even his party would pass.

We Predict: Congressional Republicans can gain ground by announcing that they will accept Obama's proposal for a ten-year program of spending cuts, totaling four trillion dollars, as long as there are no tax increases. They will also help their cause by calling for a mediator to help with the negotiations when it appears that an impasse is imminent. That will shift the "be reasonable" burden back to Obama, where it belongs. There is a high probably that Obama's ego will compel him to reject mediation and that will be seen as an unreasonable act, especially by independent voters.

We Predict: Republican Congressional leaders will continue to stand firm (some more than others, but that is another column) against Obama's tax increase. Ultimately, Obama will capitulate. A minor symbolic concession will be needed to give him a little Presidential "face saving" and the deal will be done. The crisis caused by this President will be averted at the last minute and the Chicago politician who has been recklessly gambling with our nation's good faith and credit while playing political class warfare games will be recognized by most Americans for what he is.

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Resource note: Predictions prepared July 11, 2011; Of special Interest to political leaders, candidates, staff, donors, campaign professionals, journalists and investors; Original June 14 article posted by Investrend Syndications (at http://www.investrendsyndications.net/content/prophet/2011/07/11.php).

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POLITICAL PROPHET®

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*Reporters tell us what happened yesterday. Pollsters tell us what is happening today. POLITICAL PROPHET(R) tells us what is mostlikely to happen in the future. Our elite team of political strategists with Presidential campaign experience provides analytical predictions that tend to be more precise than offerings from those who have never been "in the arena". To assure objectivity, team members are not currently consulting with individual candidates but our Predictions often provide valuable strategy insights for party leaders, candidates, staff, contributors, campaign professionals, journalists and investors.

The Political Prophet(R) and all derivatives of The Political Prophet(R) in any form are registered trademarks of The Political Prophet(R) and are subject to proprietary trademark, intellectual property and copyright Laws. Copyright (C), The Political Prophet(R), All rights reserved.

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