A law professor for 12 years, he had published only an autobiography.
As a state senator from Illinois he voted "present" an embarrassing number of times.
He gave a magnificent speech at the Democratic Convention, but is that enough?
President Reagan was called the Great Communicator. President Obama is flailing despite obvious speaking skills. Could it be Reagan had great ideas to communicate, or at least ideas he believed totally in, and President Obama is searching for his meaning and his stance?
In the other corner are ideologically embedded believers who would allow the full faith and credit of the United States, the promise of our nation, to be a sometime thing to be honored only if convenient. Perhaps they truly believe in what they espouse their cause to be. Or perhaps they are willing to sacrifice our sacred promise to pay our debts in order to capture the White House by trying to tank the economy any way they can. Either way, they are wrong.
What we now have are vast number of Americans unemployed or underemployed. Consumers burdened by debt they assumed during the housing bubble (was Greenspan really "The Maestro" as Woodward's book proclaimed?) and unwilling to spend; businesses mistrustful of Washington and hoarding cash since there is little final demand; and government locked in an ideological death battle with, I think, little honor or ethics being shown by either side.
I don't think the markets are worried about the US's ability to pay its debts. The US Treasury market will still be a haven of safety. The markets are being jarred by the obvious lack of growth in the US and by the terrifying lack of confidence in our institutions. People wonder why the banks were saved when the mortgages they issued, and then threatened their solvency, are being foreclosed on. There is no obvious incentive to take risk to start a new business unless it's a dot.com type thing that is an idea and not a capital user. The global economy is over-indebted and there is borderline idiotic leadership in Europe and a refusal to deal with reality (more on that tomorrow.)
I can't help but think if a guy like Jack Welch, formerly head of General Electric , was President, there would have been a titanic battle royale with the White House and the rating agencies before any downgrade took place. I also suspect that we desperately need business acumen in Washington. This is a big business and class warfare rhetoric doesn't help.
But as the man has said, the situation is critical, but not serious.
We will get through this.
I find it hard to come up with what might be a proper valuation multiple for the market with all the now moving pieces. So be cautious, but have faith that balance sheet strength, dividend paying capability and sound, calm management will prevail. These guys in Washington turn over often enough that we can outlast them .
"Have faith, there's magic in the night,
We ain't beauties, but hey, we're alright.” —The Boss - "Thunder Road." (with a little poetic license applied.)
Vincent Farrell, Jr. is chief investment officer at Ticonderoga Securities and a regular contributor to CNBC.