I will admit, these days, to enjoying bad news about the economy. Not because I am a “pessimist”, whatever that is, but because it feels less dishonest. In my own little Unexpectedly bubble, I’m not seeing the recession sink in for most people, and whatever else you might say about it, this is the kind of recession that ought to go to the bone. Not that everyone’s not talking about it around me; everyone is. Talk is cheap (though more expensive than many stocks these days).

In short, I am rooting for the recession-is-good-for-America argument to take hold, because as later posts will elaborate, America has needed an overhaul since about 1983. (For the record, no, I haven’t read that Time article I link to. Time has sucked since time immemorial. I link to it as an easy shorthand, so that you my FR do not think I’m claiming to invent the idea.)

So yeah, anyway, bad news. Here’s some more, from esteemed prediction ‘n’ analysis master John Mauldin: Is That Recovery We See? (Spoiler short answer: Uh-uh.) He makes (or, in many cases, merely repeats) numerous cogent arguments for this rally being a matter of scarce negative earnings surprises, failure of analyst estimates, shadow foreclosed houses, underingested commercial real estate implosion, recovery speed of corporate earnings, etc. Good stuff, go read it and play with the charts.

But I mention this analysis, number 31,427 I’ve read in the last six months telling us exactly what’s going on (shouldn’t it only take one? We could, y’know, send it around, repeatedly even. The internets are good for that) also because there is something in it that is a shame, and helps me launch a theme I will return to often in this “blog”:

Further, the Democratic Congress and the Obama administration are going to enact the largest tax increase in history in 2010, just as the economy is barely recovering. The Bush tax cuts go away, because the Republicans could not make them permanent when they had the chance. We are going to pay for that with a likely dip back into a recession in 2010, or at the very least a prolonged weak economy.

This statement is false, even just by logical standards. No taxes are being “increased”; it is merely the largest tax cut in history that is being allowed to expire. Moreover, there is no indication that keeping the rich from running away with the country (cf. all of recent American history) will cause or prolong economic hardship. In 2009, one could very easily make the case that allowing the rich to run away with the country has caused a lot of economic hardship, such as, for instance, the entire global meltdown currently underway. The average American will be unaffected by this tax cut expiry, and if the average American isn’t driving the economy up by next year, any attempt to frame what is going on as recovery will be laughable.

But the larger point here is that the statement has nothing to do with the rest of the newsletter. It’s two-cent political hectoring dropped into a bunch of decent, reasonable economic and financial analysis. Why? Because, apparently, Mr. Mauldin is so good at economic and financial analysis that he can accurately characterize the direction of the political winds, too. (And more power to him. It’s his damn newsletter, after all.)

This is not at all uncommon among the financially savvy; their ability to read markets well in a relatively free-market country, they believe, qualifies them to read all sorts of other things having nothing to do with markets accurately too. America is, thank our lucky stars, much more than its markets. Market-obsessed, certainly, but much, much more, and that moreness moves according to many laws unknown to marketeers. This is why, as a gross generalization of an example, finance types have such crap taste in popular music, in a country that is still a drivin force in popular music around the world. (Seriously, investigate for yourself, and if you find a trader who doesn’t love Skynyrd and/or Jack Johnson, report back.)

It is my great hope that the continued implosion of these markets will finally allow the much, much more to gain a foothold, an audience, and, ultimately, control, of which more in coming weeks. As for the accuracy of Mr. Mauldin’s extra-financial pronouncements, we’ll start keeping score on him right now. His current score is zero.

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