The presidential State of the Union address had some tawdry political theater with Warren Buffett's secretary who pays a higher tax rate than her boss sitting with the First Lady. There's little doubt the re-election campaign of this anti-capitalist president will feature class warfare and the politics of envy. When they urge fairness in tax matters it inevitably translates into envy.

The American political process has a destructive spending addiction… not a revenue problem. They arrogantly believe they can solve any problem by throwing money at it. More troubling is the blatant disregard for honesty when citing convenient "facts."

With sovereign debt and national credit ratings now openly questioned, I continue to believe in the secular trend view that the great bull from 1982 or 1974 peaked in 2000, and has spent a decade topping out in stages. While many factors fueled that run, there's little doubt the biggest debt bubble in history ranks near the top of the list, and that bubble burst with the 2007/08 meltdown and bailout of the banking system. The central banks notion of sustaining near zero interest rates to get borrowing cranked up again is unlikely to succeed until the de-leveraging process and debt liquidation cycle runs its course. A generation of American consumers was encouraged to live on debt that has now destroyed the value of their homes, and put one in five out of work. Those borrow and spend shopaholic ways will not likely return to Main Street for many years.

The bank stocks rally in recent months encourages bulls to believe a decent bottom was put in on both U.S. and European banks in late 2011. Add in the 61 percent rebound by HGX -- the U.S. Housing stock index, apparently expecting some measure of political relief or bad debt forgiveness to put the brakes on the relentless decline in the value of homes as a vote-winner in 2012. The overhang of foreclosures and stricter credit requirements for marginal buyers will continue to stretch out any turn in housing for several more years.

Obama clearly believes that the government should shape society, focus on and cater to the lowest social common denominator, with government taxing the "rich" to pay for it.

That mindset is scary with all the talk of taxing the rich, when they won't seriously address the thousands of loopholes structured into the tax code for the super rich who fund so much of their re-election campaigns. A simple flat tax and elimination of 98 percent of the tax code might produce more revenue, but each loophole typically represents an ongoing flow of lobbyist re-election dollars so don't hold your breath on any tax simplification from either major party.

There's no less efficient allocation of capital than the politically motivated redistribution of the fruits of productive labor to those encouraged to become ever more reliant on the state, with promises to look after them from womb to tomb.

Apparently he still believes every problem can be solved by more government spending, or at the least they want their voters to think that… Watching the bitter negativity of the GOP leadership contest sounds like a series of Democratic ads for the campaign that I'm afraid will lead to a second Obama term that America can ill afford.