America is about to make the worst voting mistake in our lifetimes. If polls are to be believed, the junior Senator Barack Hussein Obama, who never had to meet a payroll or held any serious private sector jobs (except being a leftwing activist for ACORN in Chicago), will be our Chief Executive.
One of the reason Obama is doing well is that people are worried about the economy. While there are reasons for concern, the current crisis has been overhyped to stampede Congress into an unwise bailout and stampede the people into voting for Obama. Our current hangover from a housing bubble induced by excessive subprime lending is leading to home prices defclines, higher foreclosure rates, a weak economy, and a crisis in the financial industry as bank and investment houses have lost significant capital and some have gone under. As with the bubble bursting in internet, techs and telecoms in 2001-2003, this bubble bursting may well lead to a recession, although we were not in one up until this quarter.
At times of crisis like this, it makes sense to ask:
How did we get here?
Obama says that deregulation caused the current crisis. He is wrong.
This was partly due to over-expansionistic Fed policy, but mostly, the core problem was and is subprime lending combined with the housing bubble (which subprime lending helped foster). Subprime lending combined with a fall in housing values post-bubble has led to higher foreclosure rates, which has fed even more housing price declines.
The seed of this core problem was planted by ACORN and their push for sub-prime lending with the CRA. CRA led to massive increases in subprime lending, and massive increases in subprime lending is at the root of this. ACORN was represented by Barack Obama when he was a leftwing community activist. Barack Obama was the attorney representing ACORN in their effort in the 1990s to loosen lending standards. The efforts by ACORN worked. An enthusiastic Fannie Mae Foundation report in 2003 singled out one paragon of nondiscriminatory lending, which worked with community activists and followed “the most flexible underwriting criteria permitted.” That lender’s $1 billion commitment to low-income loans in 1992 had grown to $80 billion by 1999 and $600 billion by early 2003. That company was Countrywide Financial, which also gave sweetheart deals to Democrats in Congress like Sen Chris Dodd for political cover.
Bad underwriting was getting hidden by corrupt CEOs like Franklin Raines and Jim Johnson at Fanne Mae and hackles were raised. But Democrats turned back the efforts to reofrm Fannie Mae. In 2005, Obama protected Fannie Mae when McCain and Republicans wanted better oversight of them. Fannie Mae underwrote close to a trillion in subprime loans in the past 4 years, inciting the current mortgage crisis.
What's our current situation?
The financial system is ailing, but most banks that we not overleveraged are doing well. Unemployment is still lower than the average of the past 30 years, but is rising. The stock market is volatile and in a bear market. We are not in a very serious crisis, but rather we are in a difficult time of readjustment from a bubble. Just as there is no way to survive a cat 5 hurricane without damage, there is no way to get through this without some economic pain.
The media want to tell you its the end of the world. Its a lie. Its just a narrative designed to get Obama elected and viewers biting their nails. Relax a bit. There have been recessions about once every 6 to 8 years, and financial crises of various types over our lifetimes. An economic cycle gets over-extended, investments go sour, people pull back, and we repair and move on. Now is a good time to gut-check your investments, your debt and credit rating, your job, your bank account, your housing situation, and your life goals. Now is a good time to invest sensibly if you can, cut debt you shouldn't have, and make sure you aren't an unemployment statistic. Now is not the time to panic or think the world as we know it will end. It won't.
What's the best way forward?
The best way forward is a policy of long-term economic growth. Short-term quick fixes like "stimulus" payments will only make the Government's fiscal condition worse and will not do much good. Stable, low tax rates and regulation reform is the best way forward. McCain has the right approach, Obama has the wrong approach.
Obama wants higher taxes on income, on payroll, on companies and small business. His 'middle-class tax cut' is actually a welfare payment scheme that makes the system more complicated and puts top earners in 50%+ ranges, at levels where the disincentives are so great it will harm the ecnomy without raising revenue.
Worse, Obama will add excessive spending, pork, and earmarks to worsen our fiscal condition. The Democrats run Congress now and have always had enough influence to protect their own special interests. The Dems protected fannie in 2005 when Republicans wanted better oversight. Obama is in deep with Raines and Johnson and got more Fannie Mae money than anyone except Chris Dodd, who was #1 recipient. Fannie Mae incited the subprime lending boom and bust. Meanwhile the Dems are the majority in Congress and have managed to destroy trust and confidence in Govts handling of the economy through repeated attacks on CEOs, on business ('big oil' etc), tax hikes, regulation attempts/sprees, and wild meddling. In this bailout bill alone, they wanted a budget-busting diversion of money to ACORN, a 'destroy-mortgage-contracts' clause on bankruptcy, unions on corporate boards, and Govt ownership of banks. Socialist is no longer a hyperbolic term for these guys (the good news is that the bailout bill has removed most of the poison-pill provisions).
What a sad and sorry spectacle: The Dems cause a problem, the Repubs get the blame, the Dems gain more power and cause more problems - rinse and repeat. We had FDR, we had LBJ and now we will get BHO, the third Liberal Reich.
Putting leftwing activist Obama and his fellow Democrats Dodd etal in charge is rewarding incompetence, corruption and bad intentions. The pro-Obama media will not tell the truth about Obama’s links to ACORN and CRA, and will not point out the serious links that tie him to left-wing extremists or to the corrupt insiders to incited this crisis. They will continue to lamely and falsely blame "deregulation" when in fact Government INTERVENTION AND LEFT-WING ACTIVISM is the real problem.
Putting Obama in charge of the economy is like putting an arsonist in charge of the fire department.
THE #1 THREAT TO OUR FREEDOM AND PROSPERITY RIGHT NOW IS ELECTING OBAMA.
ALL WE HAVE TO FEAR IS OBAMA HIMSELF.
That is what we need to make everyone we know aware of.