Election 2012
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The Ugly Truth About the Promise of the JOBS Act
Last week I wrote about how the Jumpstart Our Business Startups Act (the JOBS Act) can be a pathway to funding brand new businesses as well as small operating companies to further American entrepreneurship and create jobs.
I even called the legislation, signed into law on April 5, 2012, a "light at the end of the tunnel" in terms of its potential to stimulate the economy.
But I also warned you there are elements of the Act that are bad, if not downright ugly.
So, let's take another look at the JOBS Act to see if that light in the tunnel is a freight train headed straight for us.
First, it's instructive to learn that the JOBS Act came into being, not as an original piece of legislation, but as an amalgamation of six House bills, four of which had strong bipartisan support.
What began as a series of bills proposed to facilitate "access to capital" and "capital formation" and incorporated those terms in their former titles, eventually were cobbled together to become the Jumpstart Our Business Startups Act, whose title highlighted this year's election mantra: it's about jobs, jobs, jobs.
Too bad there isn't anything in the JOBS Act that says anything about hiring anybody.
The Masquerade Behind the JOBS Act
Some of you might call me cynical for this, but another way to look at what the JOBS Act amounts to is to see it as a deregulatory push masquerading as a job creation scheme.
And therein lies the problem.
It's all well and good to make raising capital easier for startups and small operating businesses, but altogether disquieting to clear that path by weeding out investor protections that have been on the books for decades.
It's like dj vu all over again.
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Tonight's Presidential Debate: Time to Talk Economics
Tonight's presidential debate will be the first time incumbent President Barack Obama squares off against GOP challenger Mitt Romney, in a race that's still too close to predict.
According to a trio of national polls published Monday, the two candidates are running neck-and-neck ahead of tonight's presidential debate. The results show just three percentage points separate the two.
This first of three sessions focuses on domestic policy. It's divided into six 15-minute segments; the first three focus on the economy, then healthcare, the role of government, and governing.
While many political analysts say Romney's chances hinge on his performance tonight, President Obama doesn't have enough of a lead to sit comfortably.
Following are some key issues that each much address and explain in the first debate of Election 2012.
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Election 2012: Five Tough Questions That Need to be Asked at Tonight's Debate
I hate to break it to Ben Affleck, but he is wrong about the election. With just 34 days left until voters head to the polls, the election 2012 race is still completely up for grabs.
Even still, in a recent interview with the AP, Affleck lumped Romney comfortably in with the likes of such memorable losers as Michael Dukakis, Al Gore and Bob Dole.
However, a recent a poll released by Rasmussen yesterday would seem to suggest this contest is far from over.
According to the survey, President Obama only leads Mitt Romney by a razor slim advantage of 48% to 47%--well within the margin of error.
That makes tonight's presidential debates in Denver all the more critical for both candidates-especially since they will be devoted primarily to the economy and domestic policy.
Of course, here at Money Morning we have our own ideas on how the economy ought to be run, and a few questions of our own for each of tonight's debaters.
But we'll bet most of the tough questions will be completely missed by the media, who have an altogether-too-exalted an idea of the candidates' competence.
With that in mind, here are five questions that should get asked at tonight's debate-but won't.
Five Questions About the Economy That Beg To Be Answered
- Mr. President, Governor, study after study has shown that the healthcare system in this country is absorbing a larger and larger share of our Gross Domestic Product, and will bankrupt us all by 2050. Yet neither of you has any reliable plans to deal with this. Mr. President, your Obamacare makes matters worse. Governor, your Romneycare in Massachusetts has also run wildly over budget and your Vice President's plan loads most medical cost increases onto individuals who get sick.
Other countries cope with medical cost inflation better than us; which of their schemes should we adopt?
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If Romney Wins Election, Make Sure You Own These Six Stocks
With U.S. President Barack Obama holding a narrow lead in the polls over Republican challenger Mitt Romney, investors need to be prepared for a win by either candidate.
Strangely enough, history has shown that the stock market actually does much better under Democratic presidents than Republican ones - three times better since 1913, according to The New York Times, and more than five times better since 1960.
Of course, that doesn't mean there won't still be plenty of stock market opportunities if Romney wins the election. It just means investors must be a bit more selective, targeting leading stocks in industries that have a history of prospering under GOP policies, especially those directly affected by planks in the Republican platform.
Sectors that fall into this category include certain health insurers, medical device makers, energy companies, domestic oil exploration outfits, utilities, transportation firms (especially railroads), and defense contractors.
Let's take a look.
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If President Obama Wins Election 2012, What's Next?
With nearly four years under President Barack Obama's reign, America's economic recovery is struggling to pick up speed and unemployment remains above an unhealthy 8%.
The Obama administration has repeatedly been harshly criticized for bailing out corporate businesses, for the massive national deficit and for the creation of the controversial healthcare bill dubbed Obamacare.
Yet, with just six weeks left before Americans head to the polls to cast their vote for the 45th president, President Obama has managed to eke out a slight lead.
In a mid-September interview with "60 Minutes," President Obama defended his term and said he and we need more time with him in office.
Here's what to expect if President Obama wins Election 2012.
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If Romney Wins Election 2012, Here's What's In Store for America
While Mitt Romney's political plans are a stark difference from opponent President Barack Obama, they agree on one thing: When it comes to this year's election, "this is a very clear choice for the American people as to what America's future will look like."
They disagree, however, on what that "clear choice" is.
That's what Romney said in a "60 Minutes" interview with Scott Pelley that aired yesterday (Sunday), where he detailed his plans to restore America to fiscal health.
Romney explained he would shrink the size of the government, overhaul entitlement programs and implement individual and corporate tax breaks-all with the help of Congress.
"I'm going to win this thing," said Romney when asked if he could win the November presidential election. "Washington is broken and I think that flows from the President. I think ultimately that the buck stops with the President."
If Mitt Romney wins Election 2012, here's what he has planned for you.
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What Happens to the Stock Market in an Election Year?
With just about six weeks to go until Nov. 6, many investors are wondering how Election 2012 will affect the stock market as a whole and their portfolios in particular.
There are many theories about what can happen to the stock market following a presidential election - although the performance spread is pretty wide.
The highest election year return for the Standard & Poor's 500 Index takes us back as far as 1928, when Herbert Hoover beat Al Smith. The S&P 500 returned 43.6%.
But the heady atmosphere just before the 1929 stock market crash probably had more to do with that high return than Hoover's election-or Smith's loss.
The lowest return in the 80-year period came in 2008, when now-President Barack Obama beat John McCain. The S&P 500 dropped 37%. Once again, the 2008 financial crisis probably had a greater impact on that result than who won or lost the election.
So what is likely to happen four years later, with the economy still struggling to recover and the S&P 500 ahead about 15%?
Let's take a look.
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AIG Stock Sale Doesn't Justify Bailout Package
The U.S. government, for the first time since 2008, is officially a minority stakeholder in American International Group Inc. (NYSE: AIG), with an $18 billion stock sale that made money for taxpayers.
The AIG stock sale will reduce the government's stake in the insurance company to about 22% from 53%.
The U.S. Treasury Department announced Sunday it was selling a large chunk of shares in the bailed-out insurer. The government saved AIG in 2008 and 2009 with a bailout package that totaled around $182 billion.
Including Monday's sale and money from AIG, the Treasury claims it has recovered a total of $197.4 billion from AIG - a $15 billion profit for taxpayers.
It's not surprising the government is selling AIG shares. What is unexpected is that such a large chunk of AIG stock will be released into the market at once, instead of spaced out over time.
One reason to shed the stock faster than planned is to credit U.S. President Barack Obama with taxpayer profit ahead of a tight race for the White House.
White House Press Secretary Jay Carney said Monday, "We have been committed to exiting those investments as quickly as practicable. What it does demonstrate is an ongoing commitment to recover taxpayer money. It's safe to say the president is pleased with the progress being made as we wind down these investments."
But even with a multi-billion dollar profit, defending private-sector bailouts is an impossible sell to most voters.
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August U.S. Jobs Report Critical for President Obama
The August U.S. jobs report is critical on many levels.
Due out tomorrow (Friday) by the U.S. Labor Department, the August report isn't expected to be enough to lower the U.S. unemployment rate.
An uninspiring 120,000 jobs are expected to have been added in August, according to a CNNMoney survey, a notable slowdown in hiring from July's seasonally adjusted 163,000.
July's number was the strongest showing in five months, yet it still was not vigorous enough to keep up with population growth. The unemployment rate actually ticked up a notch to an unhealthy 8.3%.
Here are two reasons tomorrow's U.S. jobs report is a biggie.
August U.S. Jobs Report: What's at Stake?
- President Obama's Obstacle
The employment report comes just weeks before the November presidential election. President Obama and his administration have long been blamed for the stagnant and elevated unemployment level, the lack of job creation and as a result, the slow going economy.
With just three more monthly jobs reports due out prior to the November election, Team Obama could certainly use a boost from better-than-expected numbers. The president is treading at break-even level on jobs and it is very doubtful that the unemployment rate will fall below 8% by then.
"The soft economic environment that we're having is not going to be good for any incumbent. It's a tough sell for anyone in office," Sam Bullard, a Wells Fargo senior economist told CNN Money.
No incumbent president has won re-election with an unemployment rate greater than 7.2% since FDR's rein.
On the other side of things, according to a piece in Business Insider, a top Wall Street source who backs presidential hopeful Mitt Romney said a robust showing in Friday's report bodes well for President Obama. "If the number is good Friday it doubles his [President Obama's] bounce. Maybe triples it. If it comes in really low, it could extinguish it. I don't think there's ever been a more important jobs number, politically, than this one."
If the report nearly meets or matches the expected 120,000, it "won't matter as much" according to the source.
- President Obama's Obstacle
