Tech rally is an anti-politician indicator

As much as CNBC’s Jim Kramer has taken a beating in the past year from Comedy Central fans, he still has a die hard set of fans who keep his Mad Money ratings and book sales high. He said something last night that seems very insightful, but I hope it is not true.

He noted that it is the tech companies that are leading the stock market rally over the past few months. The NASDAQ index is way way up. He speculated that the tech sector is the one industry that the government is not trying to “reform.” We have tons of reform and regulation activities already in the finance/banking sector. Health care is being debated and something will come out of that. The cap and trade bill and other environmental reforms will change energy and utilities hugely. Real estate will be affected by the financial reforms and probably the energy reform. The auto industry is virtually owned by the feds. Tech is the only one they have left alone.

So why would that make the tech sector rally? The idealist in me really wants to believe that the government can improve our lives by making intelligent decisions regarding how to regulate industries and the market. But the evidence tells another story. Our government is made up of politicians – not policymakers. They are electioneers – not statesmen (or stateswomen). Senator DeMint (R-SC)’s exultant comment about health care reform being Obama’s “Waterloo” tells the story. He would rather achieve a political gain for the GOP in the 2010 elections than to see a successful reform of the nation’s biggest albatross.

And its why being left alone is the best indicator of success. Because government intervention invariably leads to losses, not gains. This is very sad.