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Just a couple of weeks ago we were told that Congress absolutely had to pass the financial bailout bill, or we would face the Cashpocalypse… that worked out well didn’t it?

James Pethokoukis with US News and World Report has an interesting post talking about what might be causing the Dow to stumble. He says that it’s not fair to say that Wall-Streeters are scared silly by the prospect of an Obama presidency and that’s causing the dive, but he does compare the conditions now to when Reagan entered office in 1980.

After the Bailout: Is Obama Depressing the Market?:

Let’s compare and contrast for a moment. When Ronald Reagan was elected in 1980, he faced the following problems:

1) Confiscatory tax rates. Not only was the top rate 70 percent, but the brackets were not indexed for inflation.

2) Sky-high energy prices. Gas prices moved to $1.25 a gallon, twice what they were in 1976.

3) Credit market turmoil. Interest rates were about 20 percent, and housing was in the tank.

And look what our next president will have to face:

1) Confiscatory tax rates. The United States has the second-highest corporate tax rate in the world, with 70 percent of the burden falling on workers.

2) Sky-high energy prices. Anything lower than $100-a-barrel oil and $4-a-gallon gas looks like a bargain.

3) Credit market turmoil. As bad as anything we have seen since the Great Depression.

But in 1980, we chose to unleash the free market through lower taxes and less regulation. And the stock market boomed, as did the economy. In 2008, we may as a nation choose the opposite path by raising taxes on business, big and small, and on the financial markets through higher capital gains taxes. Also, regulation seems to be the new black. It’s like that Seinfeld episode in which George decides to do everything the opposite. Should be an interesting experiment, America.

Things work out well for Costanza when he does the opposite of his instincts, but I doubt that the economy will do the same. I’m increasingly beginning to believe that no matter who gets elected, we will be looking at a one-termer.

Maybe the Wall Street crowd is jittery about an Obama presidency, maybe they aren’t, but I want to know why we just paid $700 billion only to have the market tank anyway.