Let’s face it, even the Obama campaign is not calling for Universal Health Care. I just want to make that note, because even Obama seems to believe or recognize (depending on your leaning) that the government can’t afford to run a big health program. There are two reasons that come to mind: 1) it’s expensive and 2) the government is inefficient. McCain knows this, so he would rather just give a “tax credit” and “encourage” reform. In fact, McCain would like to deregulate the Health Care industry because it was so “good” for the financial industry:
McCain wrote, “Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.”
Bad timing, McCain? Well, it couldn’t really be worse, now could it? Of course McCain’s crew said that they were talking about deregulation of ATMs and that Obama is just twisting McCain’s words. The pot, of course, knows that the kettle is black. [And that's an old saying, not a racist comment. I have to clarify that after the McCain campaign spun Obama's lipstick comment.]
Obama, too, knows that Universal Health Care is not obtainable in the near future (and perhaps undesirable, as well), so he plans a rethinking of the insurance coverage and some subsidies for the almost-poor.
However, when it comes to financial institutions that crash and burn like an Iraqi SCUD, the two of them (and their parties) will just give, give, give, give away the whole treasury and create socialist financial companies, while the CEOs of these failed companies receive millions upon millions of dollars in unearned bonuses. And of course our fearless leader, George W. “cut and spend” Bush, will lead the pack. It must be an election year.
As I’m sure you have noted by now, the Bush administration has come out with a grand idea: let’s bailout the failing financial industry! That’s right, the “economy is strong,” saith the GOP time and time and time and time again. The Wall Street Journal, a.k.a. the GOP Daily News, has argued that Bush has done a grrreat job with the economy. He’s done such a splendid job that they can write Op-Ed after Op-Ed praising Bush and denouncing the “Angry” Left and the “Liberal” media for saying that things aren’t going well. But a funny thing happened on the way to the White House in 2008; the GOP’s loverly economy has not screeched to a halt, it has exploded mid-air and now the debris is being scattered to, you know who, the taxpayer! That’s right, the same taxpayer. The same taxpayer that the WSJ didn’t think should have to pay for an increase in Veteran’s Benefits. The same tax payer the WSJ didn’t think should bailout companies… last week. The same taxpayer that shouldn’t be strangled with the cost of providing health care for all American citizens. That same taxpayer should, apparently, pay EIGHT-HUNDRED BILLION DOLLARS to bailout CEOs who should have failed-out of their MBA programs. What happened to the strong economy, Mr. Bush? Well, Bush is starting to think that maybe, just maybe, there is something amiss on Wall Street:
The legislative proposal – the centerpiece of what would be the most sweeping economic intervention by the government since the Great Depression – was sent by the White House overnight to lawmakers.
President Bush said Saturday that the plan matches the scope of the problem.
“It is a big package because it’s a big problem,” he told reporters at a joint news conference with Alvaro Uribe, the president of Colombia.
“The risk of doing nothing far outweighs the risk of the package,” Bush said.
Oh… There is a big problem now. I’m surprised that President Bush was even able to hear the crash of the economy– what, with his head buried in the sand and all. Kinda reminds me of another President. That one kept telling us that the war in Iraq was going just fine and that things were turning around, until one day he realized that things were going very badly and he needed to send an additional 30,000 troops, which he should have sent in the first place. Shoot, no, wait, that wasn’t a different president. Once again Mr. Bush is cleaning the sand out of his ears has he re-emerges to the land of reality and now he’s gonna makes everything better by simply throwing money at the problem. So much for the stereotype that the Democrats are the Big Government, Big Spenders.
Surely, the Republicans and McCain are clamoring to spin this to call for tax cuts or to say this was the fault of the Democrats. Well, perhaps I’m being a bit surly this Saturday when I say “surely”– I’m so surly when I say surely– because McCain has already blamed the crisis on Obama.
“While Fannie and Freddie were working to keep Congress away from their house of cards, Sen. Obama was taking their money,” he said. “Maybe just this once he could spare us the lectures, and admit to his own poor judgment in contributing to these problems.”
Maybe just this once McCain can spare us the half-truths. Obama’s poor judgment “contributed” to these problems? Every day McCain loses a little more of my vote with his false blame placing and stratches of the truth. One day McCain thinks that Obama lacks experience and is never in Washington, but the next day Obama is to blame for whatever bad happens in Washington. But what about that money that Obama has been taking as he “contributes” to this crisis? Well, he has received $126,349 from Fannie and Freddie in some way. However, McCain has also received money from them: $21,550. It is true that Obama received 5 times as much, but in this case that only amounts to a rough 100K. Do you really want to compare, McCain? Well, OK, let’s look at a different number. What percentage of contributions to each of your campaigns comes from individuals? McCain = 81% (as of today 9/20/08). Obama = 96% (as of same date). Furthermore, both of you receive money from “Securities & Investment” (Obama = $9,873,356 McCain = $6,893,293) as one of your top five contributing industries. Obama then has “business services: inthe top five as well, but you, Mr. McCain, also have real estate and misc. finance. I don’t think you want to start talking about who has received money from whom?
That being said, it is extremely troubling to me that “Jim Johnson, the one-time chief executive of Fannie Mae… headed Sen. Obama’s vice presidential search team.” Jim Johnson is a businessman and political partisan of very questionable character:
From 1991 to 1998, he served as chairman and chief executive officer of the Federal National Mortgage Association (Fannie Mae), the quasi-public organization that guarantees mortgages for millions of American homeowners. Previously, he was vice chairman of Fannie Mae (1990-1991) and a managing director with Lehman Brothers (1985-1990). An Office of Federal Housing Enterprise Oversight (OFHEO) report[1] from September 2004 found that, during Johnson’s tenure as CEO, Fannie Mae had improperly deferred $200 million in expenses. This enabled top executives, including Johnson and his successor, Franklin Raines, to receive substantial bonuses in 1998.[2] A 2006 OFHEO report[3] found that Fannie Mae had substantially under-reported Johnson’s compensation. Originally reported as $6-7 million, Johnson actually received approximately $21 million.
In addition to being a big Obama adviser, he is a big Obama fundraiser:
Johnson is a strong Obama supporter who has personally donated the maximum $4,600 to his 2008 Presidential campaign, as well as $1,000 to Obama’s Senate campaign in 2004.[8] In addition to personal donations, Johnson is a bundler for the Obama campaign, raising between $200,000 and $500,000.[9]
This brings Obama’s judgment into question in a very big way. I understand that all politicians accept whatever money is thrown their way, including McCain and his bundlers, so that isn’t so much the issue. The issue is that Johnson is an adviser to Obama, even though it was in 2004 that his shady dealings were brought to light. Mr. Obama, what in the hell were you thinking?!
This, of course, does not make Obama responsible for the current crisis, not even close. Fannie and Freddie are a part of the current crisis, a significant part, but let us not forget Bear Stearns, AIG, Lehman Brothers, IndyMac, a whole series of failed and/or failing businesses that are all part of a much bigger problem. To blame Obama because of his poor judgment in picking a Chair for his VP search committee would be like blaming Bush for the failing of Enron because of received advice from Kenneth Lay. In other words, it’s a big bright Red Herring.
Of course McCain tells only part of the story, but that’s what can be expected from the whiniest GOP campaign ever. Here is the other part:
Obama unloaded on McCain during appearances Saturday. He fired back at McCain for running ads linking him to former top executives of Fannie Mae, James A. Johnson and Franklin Raines. Johnson briefly headed up Obama’s vice presidential search team but stepped aside when controversy arose over his role at Fannie Mae. Raines recently settled with the government after being tagged in a huge financial scandal at the mortgage financing institution.
But all is fair in love and presidential wars. After all, Obama used his own Red Herring back during the Georgie crisis:
Yesterday, the Obama campaign criticized the role of McCain’s chief foreign policy adviser, Randy Scheunemann, for being involved in the campaign’s response to the crisis in Georgia, a country for which Scheunemann was a paid lobbyist until five months ago — and for which his firm still lobbies.
All of this, of course, is beside the point. The point is this, we have now entered into a Great Depression Era bailout of $800,000,000,000. I may not know all that much about the economy, but I can see that that’s a lot of zeros. There’s almost as many zeros there as there are in Congress and the White House…. well, that’s a stretch; many more zeros exist in Washington.
Congress is clamouring all over itself to look like it is working all of a sudden. They went from no bailout no way to how much you need in about an hour. McCain went from no bailout no way to I didn’t want to do it, but it’s for your own good to the government went too far in less than a week. His new attitude seems to be one of “it hurts me more than it hurts you,” as he outlines his plans for a massive expansion of government that would include a new government agency to overlook such bailouts. But he promises this won’t be like the bailouts of the Savings and Loans back in the late ’80s. No, sir, this one’s gonna work, I just know it. The federal government, you know those guys and gals in Washington who give out billions to failures, have promised us reform once again. Looks like, to borrow a quote from Blake’s campaign, More of the Same Change. So there’s the new Grand Old Party platform, “give ‘em tax breaks! give ‘em bailouts! give ‘em a new agency! OK, we’ll be back in 20 years with some more money for ya.”
On the other side of the same coin we have Barrack “Whatever Bernanke Says We Should Do, We Should Do” Obama:
Sen. Obama, meanwhile, met with economic advisers on Friday before a campaign rally in Coral Gables, Fla. The Democratic nominee offered no specific details on a plan, instead urging bipartisan support to give “broad authority” to the proposal by Messrs. Paulson and Bernanke.
“It’s critical at this point that the markets and the public have confidence that their work will be unimpeded by partisan wrangling,” Sen. Obama told reporters. He added, “You don’t do it in a day.”
On Monday, the Illinois senator had called talk of such a rescue premature and said response to the crisis should be left to the new Congress and president.
That’s right. The same man who doesn’t want to listen to the commanders on the ground in Iraq, because the President is the one who makes the decisions and sets the mission, is more than happy to hand the reigns to the Fed on this one. Good idea, Obama. We all know that the Fed has been just spectacular thus far. Their moves had created such a robust economy. I hear that you can almost buy one Canadian Loony for a measly two US dollars these days (an exaggeration, I admit), because of the Feds brilliant work in weakening the dollar. At least McCain is talking about working toward a strong dollar (all of a sudden). Maybe, Obama, you should buy yourself a little time by handing off the responsibility to the people over at the Fed and then in a couple weeks see which way the economy goes and then come out with a plan that either takes credit for the turn around or gives blame for the failure– oh wait, that’s already your strategy! Obama, who generally gives decent details on his website, is showing a concerning lack of authority on this issue. And he, like McCain, was against bailouts on Monday, but all for them by Friday.
At a time like this, when the government is massively interfering with an economy that is on the rocks, where can we turn to hear some sensible non-interventionist debate? Perhaps the Wall Street Journal can lend us a hand…
Nope.
The Wall Street Journal, who praised the Fed just a few days ago for not interfering, is today justifying the intervention. To justify this massive expense (one they would poo-poo if it meant that Iraqi War Veterans could go to college for free), they use historic US government interventions. They use four examples, four examples that should tell us just how big of a problem the GOP has allowed us to get into (I can hear the objections from the Republicans now: “It would be worse if not for Bush!” “It was the Congress’s Fault!” “Bush doesn’t control sub-prime mortgages!” “You always blame Bush first!” “It’s the liberal media’s fault!”). Here are the four examples:
Shall we note that the first example is in 1797 and the next is in 1907 (114 years later)? Perhaps these are not all the examples that they could have given, but it is telling that they decided on these four from 1797, 1907, the 1930s and the late 1980s. Those are pretty historic references, but just a month ago the GOP would have had you believe that the economy was sound and that the media was just portraying it in a bad light.
No, there is nowhere to turn today for a non-interventionsit– wait, wait, there are more than two parties in the United States? What great news! As McCain comes within a hair’s breadth of losing my vote and as Obama’s recent flip-flop, non-commitment and extremely troubling judgement brings his campaign back into serious question, I am left to look for alternatives. And here is what Bob Barr and Ron Paul have to say about these bailouts.
First, Bob Barr (in this instance referring to AIG):
“It appears that President George W. Bush should say that we are all socialists now,” says Barr, as he explains that the government has now taken over insurance giant AIG with an $85 billion loan, for which it received an 80 percent equity stake in the company. “In other words, the federal government now will own and run one of the nation’s largest insurance companies.”
And here Barr writes about Fannie and Freddie:
The federal government has spent decades subsidizing the housing industry, and making it easier and easier for homebuyers to purchase homes, sometimes with virtually no equity stake in the homes they were purchasing. Then the subprime lending crisis hit. Mortgages went bad, lenders folded and investment houses tottered. Earlier this year, the Federal Reserve engineered a $30 billion bailout of Bear Stearns, and just this summer, the administration and Congress agreed to a $300 billion mortgage bailout.
Bankrupt borrowers get federal support while money is transferred to the usual interest groups. The federal government, which has never met a budget it couldn’t bust, will counsel over-stretched homeowners about their finances. Congress tossed in an authorization for the Treasury to “invest” in Freddie Mac and Fannie Mae, which have guaranteed $15 trillion worth of mortgages – a large majority of all residential mortgages in the country.
Now the federal government has taken over the two organizations. But the Treasury Department can’t tell us what it will cost: Maybe $25 billion; maybe $100 billion. Perhaps more. Who knows?
And then from Ron Paul (who is a Republican) on the big bailout this week:
GOP congressman Ron Paul says the radical bailout of the troubled US financial market will only lead to the destruction of the dollar.
The Bush administration is asking Congress to authorize the government to buy $700 billion in troubled mortgages, a costly plan to bail out Wall Street’s beleaguered financial institutions.
Congressman Paul does not approve of the plan and says it will fail to produce a practical outcome.
“It’s more of the same. More debt and more inflation and more pressure on the dollar. Ultimately, although the markets are responding very favorably at the moment, I think it is going to be devastating to the dollar and to our financial situation in this country,” US News quoted the Texas congressman as saying.
One should also keep in mind that as Bush pushes this latest economic “treatment” he is also warning the Democratic controlled congress not to put in anything that he doesn’t like. And to that I think, “Or what? You’ll veto?” Bush, who took five years to finally veto a bill (and it was for stem cell research!!) seems ready to veto any plan (or shall we say legislation) that the legislative branch sends him that is not to his liking. All I can say is that the Democrats had better put an extension of unemployment benefits into the plan or they will have eliminated any chance that I will vote for Obama. Period. If the US government gives away EIGHT HUNDRED BILLION DOLLARS without setting aside money for the unemployed, neither party will receive my vote this election.
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Follow-up comment rss or Leave a TrackbackHow interesting that McCain uses this as an opportunity to attack Obama’s connection to Fannie and Freddie, but Obama uses it as an opportunity to call for bipartisanship.
Very telling.
Sometimes the Bush administration just can’t get enough funds.
But the Bush administration’s proposal is not without its ever present share of RED FLAGS:
Even Bloomberg has noted the “unchecked by court” part:
Whatever happened to “the market will adjust”? Whatever happened to claims that the Health Care industry should not be regulated because the “free” market will make things less expensive? Of that’s right, that’s health care for people who don’t have money. For those who do have money, but have failed to execute a solid business plan, the Bush administration is here for you.
And in all of this what is it that the Treasury Secretary is willing to fight hard over?
McCain, who, as I noted above, was using this crisis to criticize Obama, has now turned the corner and is calling for bipartisanship. He has some good ideas in there. Actually, both candidate do, if they actually follow through on a bi-partisan plan.
Will you look at that, suddenly the campaigns are questioning the bailout:
Too bad they already came out for it. I guess flip flopping is no longer politically dangerous.
Here’s a great article on the new socialist America:
Thank you, Patrick, for sending this to me. It is terrific! For those who want to read the whole article, click the link above.
So much for saving the economy. The 700 BILLION DOLLAR corporate BAILOUT has driven the price of oil to its highest single day jump ever, while driving the US dollar down even more and the DOW industrial average dropped too, by 372 points.
They may be few these days, but there still are some sensible people in Washington and they mostly seem to be Republicans of the Old pre-Bush Variety:
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