Partisan Politics

So I have been meaning to post on this whole financial meltdown for quite a while. I am amazed at what has happened and how mainstream media has pandered to Obama over the last week or so. The whole issue of McCain flying in as a stunt, and how the "Radical Republicans" are responsible for killing the bailout, etc. It is all pandering, the bailout was killed by both parties, and they both were lacking a significant number of votes. Sort of a moot point now though I suppose.

Granted McCain's flight back to DC may have had some political motivations but he wasn't the only one plus it was requested that he and Obama both attend the meeting. So why isn't it a White House political stunt by all parties? Because the media loves Obama.

I find most ironic the continued battering of Obama that this crisis is a result of deregulation. It is actually the opposite. It is the result of improper regulation. Here is a video link that explains it quite well though it does have some very obvious political overtones I think the facts that it presents are very valid.
http://www.youtube.com/watch?v=1RZVw3no2A4&feature=iv&annotation_id=event_597487

Here are some key facts out of this video that it blows over very quickly.

• The Community Reinvestment Act (CRA) was regulation designed to force banks (in order to get FDIC approval) to provide loans to low income. Initially created in 1977 this program was helpful and housing prices grew consistently with inflation.
• In 1994 under the Clinton administration the CRA was expanded and forced higher levels of low income "affordable" mortgages from banks. Housing "value" exceeded inflation by monstrous amounts for the next 10 years.
• Who gets money from Fannie Mae & Freddy Mac. Why are these "government regulated" companies making campaign contributions? Seems like a massive conflict of interest to me.
• There were attorneys who actually sued banks for not maintaining their minimum required "affordable" loan packages, Obama was one such attorney.
• It takes time for the effects of bad politics to make an impact. I think both Bush Sr. and Clinton were riding on the coattails of Reagan's fiscal plan. Unfortunately "W" got stuck with the mess that Clinton and company made. I think they were too distracted by scandal to actually take care of the economy.

In other news the stock market has been tumultuous at best over the last couple of weeks. I think it is going to get worse before it gets better. I am most concerned by Obama's supposed "economic plan". Can't say that I would personally hate having all my personal income exempt from tax, but I don't think many people realize what the other consequences of that "benefit" really are. Under an Obama administration businesses would be taxed to death, small businesses would likely suffer the most, since the tax burden would be proportionately larger. Obama's plan is a completely backwards form of economics. The Reagan administration has often been referred to as following the idea of trickle-down economics. Basically what this means is that if you reduce the tax burden on businesses they can thrive. When businesses thrive people have more job opportunities, more competitive pay, and the capital required to invest in further R & D. Obama's concept is "trickle-up" economics. By relieving the tax burden on individuals making less than 250k the idea is to give consumers more money so they can spend more then the businesses have more revenue to compensate for the higher tax burden. The problems with this philosophy are: it completely removes a huge source of tax revenue generated by illegal immigrants (since they don't file tax returns), it doesn't work if people don't spend money, and most of the products that would be purchased with additional expendable income are not manufactured in the United States (it would likely benefit China a whole bunch). The reason I draw the last conclusion is base on the tightening of the credit market. The US has primarily converted to a services based economy, the products that we do create are often very large and require credit (houses, cars, etc.), as the credit market continues to tighten it becomes more and more difficult to afford these types of products.

Alright well there is my political post for the last little while. I am sure everyone was just dieing to know what I was thinking.