Mockery and Derision

Are we finally done with laissez-faire, trickle down economics?

Does anyone actually understand the state of our current economy, just how perilous things are? Does anyone understand why we are where we are today?

Well, I’ll tell you Dear Readers. I’ll amble down from my mountain of knowledge, and explain to you the economy as I understand it.

Today, we are in an awful position economically. Whether you feel it or not, the fact remains, we are. A Recession is somehwhat loosely defined as “two or more consecutive quarters of negative economic growth.” We are not CURRENTLY in a recession. But we don’t have the numbers yet for this quarter, and no one will tell you they look good.

The federal government has recently had to bail out global insurance giant AIG from bankruptcy, just the latest in a long line of government bail outs of major financial institutions to avoid bankruptcy. This latest bailout may well reach a total of 1 trillion dollars in taxpayer money. Let me make this clear: this money is coming out of thin air. Literally. Imagine if you had the power to close your eyes, focus reallllly hard, and there would be 1 trillion dollars in your bank account. Well the federal government has that power. We are currently, as a nation, 10 TRILLION dollars in debt. 10 trillion.

These aren’t small mom and pops the government is bailing out. They’re massive conerstones of the financial markets. So why are they failing? Simply put, they’re failing because of deregulation.

In the 1980’s many politicians, among them Phil Gramm, John McCain, Ronald Raegan, and Alan Greenspan, all pushed fo a deregulation of the financial industry. And they got what they wanted. A massive amount of federal regulatory power and oversight were reversed, with the consequence that loans and practices that once weren’t allowed suddenly were. This is great you say. I couldn’t get a loan for a house before, but now I can you say. Housing prices are always going up you say. Things couldn’t be better.

That is, unless housing prices weren’t ALWAYS going up. What if, like any other subset of the economy, housing prices go through ebbs and flows, good years and bad years, as well. Suddenly you have to sell your house. Now you can’t pay back your mortgage. You forclose.

This is the situation we’re in. When you declare bankruptcy and forclose, the bank that owns your mortgage loses a lot of money. And if a lot of people have to do that, it becomes contagious. Banks start to fail. The banks themselves declare bankruptcy. The economy collapses. This is the situation we find ourselves in.

So the government finds itself in the awkward position of having to inflate the economy by creating trillions of dollars in new debt to bail out these financial institutions because it’s by far the lesser evil than letting the economy collapse. But like any debt, it will eventually come home to roost. You can’t simply retain trillions of dollars in debt, run up trillions of dollars in new debt every few years, and expect that debt wont have to be paid. The economy, all economies, function on consumer confidence. Imagine the global depression if the US governemnet defaults on its debts and collapses.

Once again, this isn’t theory. It’s where we are. The debt is due to many factors, not the least of which a war we’re we’ve spent 2.3 trillion dollars, and the loss of control over what’s happening in our economy due to the loss of regulations that keep it under control.

And now, as a volunteer for the Obama campaign, I’ve heard a lot of wariness on the part of voters who feel John McCain would be a better handler of the economy as a President. Let me make this clear: this is HIS mess. It’s his, and his fellow Republican deregulators who feel there shouldn’t be any safeguards against an economy that has no incentive to regulate itself. John Mccain has made clear in recent weeks that he still doesn’t understand the economic mess, or what it takes to fix it. And he wants to continue spending billions every month to keep soldiers dying in Iraq.

Barack Obama has a lot of proposals for what to do with education. Health care. Alternative energy sources. But perhaps the most important tenant of an Obama administration is pay as you go government. For every dollar Senator Obama wants to spend as President, he wants to pay for it with increased revenue, or a decrease in spending somewhere else. He also has promised NOT to raise taxes on the middle, lower, or even most of the upper classes. He wants to raise taxes on the top 1% of the tax bracket, the very people who reaped MASSIVE breaks from the Bush administration. He also wants to close loopeholes for industries that currently have unfair and unneccesary holes in the tax code, that allow them to do the majority of their business in America and pay no taxes for that privelidge.

Barack Obama is clearly the smartest man we’ve had run for President in ANY of our lifetimes. He understands the issues, the electorate, and what it takes to solve these problems we find ourslelves so deep in. John McCain says the “fundamentals of our economy are strong” one day, and the very next day calls for the firing of the SEC chairman, a firing that NOONE else has called for. The chairman is simply doing the best he can to regulate an industry in which John McCain was instrumental in getting rid of the regulations that protect it. So let’s not mince words. John McCain is a living, breathing disaster. He doesn’t understand you, he doesn’t understand your problems, and he doesn’t understand your life. Barack Obama does. And that’s why I support him for President.

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