If you want to look at the causes of the current financial crisis, look no further than to the Democrats that are now pointing the finger at the Republicans and the Bush Administration. While Bush has made his fair share of mistakes, it is tough to say that he was responsible for the current state of the financial world.

It is fairly well accepted that when you boil it down the current financial crisis has been caused by a credit crisis and losses related to credit investments. This credit crisis has its roots in two primary areas, the first was exceedingly low interest rates and willingness on the part of investors to take risk, and the second area was the bursting of the housing bubble.

The first area, low interest rates and willingness on the part of investors to take risk is the natural part of any business cycle. This really isn’t an area that the government or anybody can regulate. This cycle will always occur, to some extent or the other, and in general while causing some problems, typically the issues caused by this cycle are relatively benign and manageable.

The second area, and the area that has really exasperated the impact of this cycle has been the bursting of the housing bubble. Current estimates are that this housing bubble will end up costing hundreds of billions to trillions of dollars. This has been the primary cause of the financial crisis, it was the spark that started the contraction of credit and the gasoline that has fueled the fire that has engulfed our entire financial system. It has forced the government to take unprecedented actions in order to shore up our financial institutions and it threatened our entire way of life in the process. Any discussion about the cause of the financial crisis needs to start and end with an analysis of the housing bubble.

Let’s first address some of the rumors that have been put out by the media. Obama and the Democratic congressmen were quick to point the finger at the “failed economics” of the Republican Party, and specifically the “deregulation” that had been championed by Republicans like McCain.

The fact is the last major piece of financial deregulation was the Gramm-Leach-Bliley Act which repealed part of the Glass-Steagall act of 1933. Specifically this reform allowed commercial banks, investment banks and insurance companies to consolidate. While proposed by Republican Senator Phil Gramm, and Republican Representatives Jim Lech and Thomas Bliley Jr, it should be noted that this bill was signed into law by President Clinton. It should also be noted that none of the problems principally responsible for this particular financial crisis have been attributed to this step of deregulation.

So if it wasn’t government deregulation that wasn’t responsible for this financial crisis, should we assume that the politicians, hands are completely clean in this matter and it was really caused by the private sector run amok? In fact, the government did have a hand in this crisis. It encouraged the private sector to make risky loans to those who couldn’t afford them, provided an implicit backing to Fannie Mae and Freddie Mac which allowed them to grow to unwieldy proportions and then failed to regulate both institutions.

Fannie Mae and Freddie Mac were the major players in the housing market, touching more than half of the nations $12 trillion in mortgages. Their potential collapse was at the center of the start of the credit crisis and it was widely accepted that their balance sheets had grown to out of control proportions and that their potential for failure would have had catastrophic consequences to our financial system.

http://www.nytimes.com/2008/07/11/business/11fannie.html?scp=2&sq=fannie%20mae%20collapse&st=cse

How did Fannie and Freddie get to be so large and so important to our housing market? Why did Fannie, Freddie and other banks begin to extend loans to borrowers who could not afford their loans?

Here is link to a 1999 NY Times Article that discusses the push by Bill Clinton to extend more high risk loans to low income borrowers that unfortunately couldn’t afford them:

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=1

In 2003 it was the Bush Administration and then Treasury Secretary John Snow who pushed to create a new agency within Treasury that would regulate Fannie Mae and Freddie Mac. It was blocked by Congressional Democrats who were afraid that regulation would reduce loans to low income individuals. Barney Frank wanted to keep pressure off these entities so there could be more “affordable housing”. The 2003 NY Times article can be found here:

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print

The Republicans again tried to control Fannie/Freddie in January of 2005 with the Federal Housing and Enterprise Regulatory Reform Act of 2005, which was introduced by Charles Hagel, a Republican Senator. Senator McCain also made a major push to regulate these entities in the early part of 2006:

http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190#sMonofilemx003Ammx002Fmmx002Fmmx002Fmhomemx002Fmgovtrackmx002Fmdatamx002Fmusmx002Fm109mx002Fmcrmx002Fms20060525-16.xmlElementm0m0m0m

The key quote for McCain was the following:

“If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.”

It was clear that McCain sounded the warning in advance of the problems that then spiraled out of control. While the regulation of these two entities would have not, in and of itself, solved all the problems, it would have been a significant action that would have helped in a material way to mitigate some of the problems that occurred.

The push for these reforms was once again defeated by Congressional Democrats namely Chris Dodd. Dodd also received $133,900 in contributions from Fannie and Freddie over the past ten years.

Now to Obama’s claim that he was the one called for regulation and warned about the impending financial collapse caused by the subprime mortgage market. Obama was mainly silent on the Fannie and Freddie regulation and was cited by Washington insiders as being mostly supportive of the organizations. In terms of Obama’s warning on the subprime crisis this occurred on March 22nd 2007 well after the vast majority of the problem loans were already made and well after most of the problems were surfacing. In addition the letter focused mainly on the community impacts as opposed to the risks posed to the overall economy. The letter can be found at:

http://obama.senate.gov/press/070322-obamaurgesber/

As we get close to the election I was hoping to get some people to forward around the following list of reasons I think you should not vote for Obama to as many people as possible. I think that people need a reminder close to election day. In addition I have encountered many people who have either forgotten why they were scared of an Obama presidency or who didn’t think this election was that important and were not planning on voting. This is an extremely important election, probably the most important election of our lifetimes. The control of Congress has moved to the far left and now we may have an extremely left President as well. This should be scary not just to conservatives but also to moderates and to those who even lean to the left but are not extremists. Just to note I am NOT a registered republican and have never voted for a republican President. My bias is that I am biased against what I think are bad ideas. Please forward this list around, or come up with your own list and forward to as many people as possible.

Thanks

Just as a reminder, in front of the election, I wanted to review the reasons I think you should NOT vote for Barack Obama. He is unbelievably inexperienced. He has very extreme views. His economic policies are scary, and come at the worst possible time. He has radical associations, a history of questionable deals, and a track record of not being forthcoming about his past. He isn’t any better than McCain on Iraq, now that he acknowledged that his original idea for withdrawal would not be possible to do responsibly, his timeline looks very much like the McCain plan. He is benefiting from false perceptions that the Republicans caused this financial crisis when, in fact, many Democrats hands are particularly dirty. He would get in at a time when the Democrats have full control of both the House and the Senate, and a super majority in the Senate. There would be no checks or balances on what the Democrats would do, and that in and of itself should be enough to get people very concerned.

1)Most inexperienced candidate in history:
a. State Senator for 8 years, often voted “Present” on controversial issues (not yes or no, just I was there)
b. Junior US Senator – Started running for president in his 2nd year in the Senate
c. No (zero, zip, nada) executive experience (outside of being in charge of his campaign)

2)Extreme views
a. Ranked most liberal Senator in the Senate based on his track records of his votes, Biden in the top 5
b. Believes in redistribution of wealth, including redistribution to those who pay no taxes
i. Failure of courts in civil rights movement was not to do more redistribution according to quote from Obama
c. Wants to grow government dramatically, look at his proposals, every single issue that comes up is we need to invest in this or invest in that; “invest” means have the government spend more and more of your tax dollars
d. Hangs out with self proclaimed communists/Marxists

3)Scary Economic Policies
a. Wants to demonize corporations and raise their taxes
i. Our corporate tax rate is the 2nd highest in the world, behind Japan. Japan has spent more time in a recession than out of one for the past 15 years. Don’t think this is the economic model that the US should attempt to emulate.
ii. Corporations are also known to many as “the Company I work for. As taxes go up, employment has to go down.
iii. Makes our companies worth less (as more goes to taxes, companies earn less, investors who really buy companies based on earnings willing to pay less), that means the stocks in your 401(k) or 403(b) go down.
iv. Makes the products you buy more expensive (two ways to counter the effect of taxes, cut costs (aka fire workers) or raise prices for the goods you sell. Tax corporations more, you pay more when you shop.
v. Makes our companies attractive targets to foreign buyers. Overseas companies can buy them, move headquarters overseas and have massive tax savings opportunities immediately. Jobs move overseas, corporate tax base moves overseas, tax base in the States decreases, need to increase taxes again.
b. Wants to tax the people who actually save money
i. Most Americans do not save money and do not invest in equities (as shown by negative savings rate in this country)
ii. If you take money away from these people, equity ownership for entire country decreases over time, reducing percentage of our businesses that people in this country own, reducing tax base over time.
iii. Further punishes investors with higher capital gains/dividend taxes. Get taxed when you make money at your job, buy a stock in a Company who’s earnings get taxed again, and then pay yet another tax if they pay you a dividend or you sell you stock. And he wants to raise each of those taxes.
c. Wants to raise taxes in a recession
i. Same policy as Hoover, which then drove our economy into a depression
d. Government spending further driving up federal deficit. While Democrats will point out that under Bush deficit rose, McCain isn’t Bush and is known for being a budget hawk. In addition look at the respective plans of each of the candidates. Obama has proposed ~$1 TRILLON in new spending, with estimates likely underestimated for some of his policies such as his healthcare policies, which when similar programs were tried at the state level in the past decade those programs came close to bankrupting those states and had to be cut back.

4)Dishonest Politics
a. Ran for the Senate in part based on tax cuts for the Middle Class. Ended up voting consistently to raise taxes.
b. Pledged to take public financing while trying to get the democratic nomination and then went back on that.
c. Lied about connection to Bill Ayers. While being “friendly” (quote from Obama campaign manager) with an admitted communist/anarchist who engaged in bombings of government targets in the US may not disqualify one for president is some people’s opinion, here are some things to think about:
i. Obama tried to claim he was just a “guy in the neighborhood” yet:
1. He served on a board with the guy for years
2. He provided a plug for Ayer’s book in the Chicago Tribune (typically a favor you don’t do for just “a guy in the neighborhood”)
3. Boards he was on contributed to some Ayer’s organizations
4. Held political meetings to help launch his political career in Ayer’s living room
5. To say he was “just a guy in the neighborhood, strikes me as dishonest, and at the end of the day integrity in our leaders should probably count for something, don’t you think
d. Stated that Reverend Wright never said the controversial items (condemning America, implying we were responsible for the terrorist attacks, AIDs was a government invention to suppress inner city people, etc.) when he was there. Seems unlikely that Wright would become radical only once Obama sought higher office and for the 20 years prior was just a regular preacher.
e. Relationship with Tony Rezko, a convicted felon, who provided hundreds of thousands in funds for Obama campaigns. Obama just happened to later vote for legislation that directed state subsidies to lower income housing that benefited developers such as…….. Tony Rezko. Wow, guess that was just a coincidence. Then later, good ol’ Tony decided that donating to Obama’s campaigns wasn’t doing enough to help his good friend. So he decided to help out on a little land deal. Rezko bought the plot of land right next to Obama’s house for $625,000 (guess he wanted the opportunity to be close to his friend). But wait, he then decided to sell a portion of that land to Obama for $104,500. Odd transaction. Especially odd, given that after that land sale, the Rezko lot basically became too small to develop so it just became this nice big empty space, which some of us would call a yard. So Obama was able to get a $625,000 yard for the bargain price of $104,500 while making the whole transaction look clean, since he only bought 1/6th of the Rezko lot for 1/6th the price. If this was an above board transaction, why all the complexity and why did Rezko leave himself with a lot that is undeveloped and devalued due to the sale to Obama? I guess a direct check into Obama’s bank account, while easier, might have looked bad?
f. Silencing the media – Obama supporters have staged massive call-ins and harassment against media outlets that have said negative things about Obama. In addition the Obama campaign has cutoff access to reporters and news stations that have asked the campaign questions that it deemed were too tough (latest instance was WFTV in Orlando). He recently kicked three daily newspapers off of his plane (Washington Times, NY Post, Dallas Sun Times) to make room for Essence and Ebony magazine. Note that coincidentally all three papers endorsed McCain.
g. Has relationship with Rashid Khalidi who according to media reports was a spokesman for the PLO when the PLO was considered a terrorist organization. LA Times has a videotape of a party with Khalidi and Obama and has refused to release it
h. Paid Acorn $800,000 to “get out the vote”. Acorn now investigated in multiple states for voter fraud, way to get out the vote.
i. Incorrectly stated that he warned about the subprime crisis in advance. He actually warned about the subprime crisis in March of 2007, after the VAST majority of loans had been made and the problems were already surfacing. This would be the equivalent of being on the Titanic and warning that you might want to watch out for icebergs AFTER you already hit one and started sinking. John McCain did warn about Fannie and Freddie, which were much bigger problems, back in 2006 while there was still time to act. Guess Obama really doesn’t have any problem distorting the facts to make himself sound good in a debate, huh?

5)No Better on Iraq
a. Originally stated that he was going to pullout with set timeline
b. John McCain stated get out when it was responsible to do so
c. Has realized that McCain was basically right, now wants a timeline that can be adjusted based on “conditions on the ground”
d. His “timeline” and the McCain plan for withdrawal look very similar, so if you want troops out of Iraq quickly would be surprised if either does it materially quicker than the other
e. With McCain at least know will do responsibly

6)Getting False Credit on Economy/Democrats more at Fault on Housing Bubble
a. Blamed current economic condition on Republican deregulation, fact is there was no substantial deregulation over the past 8 years
i. Last major piece was in 1999, repeal of Glass-Steagall act which then allowed investment banks, commercial banks, and insurance companies all to be under one corporate umbrella, this was signed into law by Clinton, but we shouldn’t blame Clinton because this deregulation really had nothing to do with this financial collapse
b. Democrats pushed for heavily pushed for “affordable housing loans”, these loans now turning bad, which has been major cause of crisis
c. Republicans (Treasury Secretary Snow, Sen Hagel, later Sen McCain) all pushed for stronger regulation of Fannie Mae, Freddie Mac which was defeated by Barney Frank, Chris Dodd and other Democrats

7)There would be NO CHECKS OR BALANCES
a. Democrats likely to get 60 seats in Senate, filibuster proof majority
b. Democrats will solidly control House
c. Have most liberal Senator, who may have moderated some of his views while on the campaign trail, but whose basic ideology for most of his life has been extremely left. While his current proposals, particularly his economic proposals are scary, risk of him returning back to even more extreme, radical views, and having nobody to balance him out
d. Even if you don’t like McCain, having someone to put some checks and balances on Washington is extremely important, McCain will keep Democratic Congress in line and they in turn will keep him in check

As we get close to the election I was hoping to get some people to forward around the following list of reasons I think you should not vote for Obama to as many people as possible. I think that people need a reminder close to election day. In addition I have encountered many people who have either forgotten why they were scared of an Obama presidency or who didn’t think this election was that important and were not planning on voting. This is an extremely important election, probably the most important election of our lifetimes. The control of Congress has moved to the far left and now we may have an extremely left President as well. This should be scary not just to conservatives but also to moderates and to those who even lean to the left but are not extremists. Just to note I am NOT a registered republican and have never voted for a republican President. My bias is that I am biased against what I think are bad ideas. Please forward this list around, or come up with your own list and forward to as many people as possible.

Thanks

Just as a reminder, in front of the election, I wanted to review the reasons I think you should NOT vote for Barack Obama. He is unbelievably inexperienced. He has very extreme views. His economic policies are scary, and come at the worst possible time. He has radical associations, a history of questionable deals, and a track record of not being forthcoming about his past. He isn’t any better than McCain on Iraq, now that he acknowledged that his original idea for withdrawal would not be possible to do responsibly, his timeline looks very much like the McCain plan. He is benefiting from false perceptions that the Republicans caused this financial crisis when, in fact, many Democrats hands are particularly dirty. He would get in at a time when the Democrats have full control of both the House and the Senate, and a super majority in the Senate. There would be no checks or balances on what the Democrats would do, and that in and of itself should be enough to get people very concerned.

1) Most inexperienced candidate in history:
a. State Senator for 8 years, often voted “Present” on controversial issues (not yes or no, just I was there)
b. Junior US Senator – Started running for president in his 2nd year in the Senate
c. No (zero, zip, nada) executive experience (outside of being in charge of his campaign)
2) Extreme views
a. Ranked most liberal Senator in the Senate based on his track records of his votes, Biden in the top 5
b. Believes in redistribution of wealth, including redistribution to those who pay no taxes
i. Failure of courts in civil rights movement was not to do more redistribution according to quote from Obama
c. Wants to grow government dramatically, look at his proposals, every single issue that comes up is we need to invest in this or invest in that; “invest” means have the government spend more and more of your tax dollars
d. Hangs out with self proclaimed communists/Marxists
3) Scary Economic Policies
a. Wants to demonize corporations and raise their taxes
i. Our corporate tax rate is the 2nd highest in the world, behind Japan. Japan has spent more time in a recession than out of one for the past 15 years. Don’t think this is the economic model that the US should attempt to emulate.
ii. Corporations are also known to many as “the Company I work for. As taxes go up, employment has to go down.
iii. Makes our companies worth less (as more goes to taxes, companies earn less, investors who really buy companies based on earnings willing to pay less), that means the stocks in your 401(k) or 403(b) go down.
iv. Makes the products you buy more expensive (two ways to counter the effect of taxes, cut costs (aka fire workers) or raise prices for the goods you sell. Tax corporations more, you pay more when you shop.
v. Makes our companies attractive targets to foreign buyers. Overseas companies can buy them, move headquarters overseas and have massive tax savings opportunities immediately. Jobs move overseas, corporate tax base moves overseas, tax base in the States decreases, need to increase taxes again.
b. Wants to tax the people who actually save money
i. Most Americans do not save money and do not invest in equities (as shown by negative savings rate in this country)
ii. If you take money away from these people, equity ownership for entire country decreases over time, reducing percentage of our businesses that people in this country own, reducing tax base over time.
iii. Further punishes investors with higher capital gains/dividend taxes. Get taxed when you make money at your job, buy a stock in a Company who’s earnings get taxed again, and then pay yet another tax if they pay you a dividend or you sell you stock. And he wants to raise each of those taxes.
c. Wants to raise taxes in a recession
i. Same policy as Hoover, which then drove our economy into a depression
d. Government spending further driving up federal deficit. While Democrats will point out that under Bush deficit rose, McCain isn’t Bush and is known for being a budget hawk. In addition look at the respective plans of each of the candidates. Obama has proposed ~$1 TRILLON in new spending, with estimates likely underestimated for some of his policies such as his healthcare policies, which when similar programs were tried at the state level in the past decade those programs came close to bankrupting those states and had to be cut back.
4) Dishonest Politics
a. Ran for the Senate in part based on tax cuts for the Middle Class. Ended up voting consistently to raise taxes.
b. Pledged to take public financing while trying to get the democratic nomination and then went back on that.
c. Lied about connection to Bill Ayers. While being “friendly” (quote from Obama campaign manager) with an admitted communist/anarchist who engaged in bombings of government targets in the US may not disqualify one for president is some people’s opinion, here are some things to think about:
i. Obama tried to claim he was just a “guy in the neighborhood” yet:
1. He served on a board with the guy for years
2. He provided a plug for Ayer’s book in the Chicago Tribune (typically a favor you don’t do for just “a guy in the neighborhood”)
3. Boards he was on contributed to some Ayer’s organizations
4. Held political meetings to help launch his political career in Ayer’s living room
5. To say he was “just a guy in the neighborhood, strikes me as dishonest, and at the end of the day integrity in our leaders should probably count for something, don’t you think
d. Stated that Reverend Wright never said the controversial items (condemning America, implying we were responsible for the terrorist attacks, AIDs was a government invention to suppress inner city people, etc.) when he was there. Seems unlikely that Wright would become radical only once Obama sought higher office and for the 20 years prior was just a regular preacher.
e. Relationship with Tony Rezko, a convicted felon, who provided hundreds of thousands in funds for Obama campaigns. Obama just happened to later vote for legislation that directed state subsidies to lower income housing that benefited developers such as…….. Tony Rezko. Wow, guess that was just a coincidence. Then later, good ol’ Tony decided that donating to Obama’s campaigns wasn’t doing enough to help his good friend. So he decided to help out on a little land deal. Rezko bought the plot of land right next to Obama’s house for $625,000 (guess he wanted the opportunity to be close to his friend). But wait, he then decided to sell a portion of that land to Obama for $104,500. Odd transaction. Especially odd, given that after that land sale, the Rezko lot basically became too small to develop so it just became this nice big empty space, which some of us would call a yard. So Obama was able to get a $625,000 yard for the bargain price of $104,500 while making the whole transaction look clean, since he only bought 1/6th of the Rezko lot for 1/6th the price. If this was an above board transaction, why all the complexity and why did Rezko leave himself with a lot that is undeveloped and devalued due to the sale to Obama? I guess a direct check into Obama’s bank account, while easier, might have looked bad?
f. Silencing the media – Obama supporters have staged massive call-ins and harassment against media outlets that have said negative things about Obama. In addition the Obama campaign has cutoff access to reporters and news stations that have asked the campaign questions that it deemed were too tough (latest instance was WFTV in Orlando). He recently kicked three daily newspapers off of his plane (Washington Times, NY Post, Dallas Sun Times) to make room for Essence and Ebony magazine. Note that coincidentally all three papers endorsed McCain.
g. Has relationship with Rashid Khalidi who according to media reports was a spokesman for the PLO when the PLO was considered a terrorist organization. LA Times has a videotape of a party with Khalidi and Obama and has refused to release it
h. Paid Acorn $800,000 to “get out the vote”. Acorn now investigated in multiple states for voter fraud, way to get out the vote.
i. Incorrectly stated that he warned about the subprime crisis in advance. He actually warned about the subprime crisis in March of 2007, after the VAST majority of loans had been made and the problems were already surfacing. This would be the equivalent of being on the Titanic and warning that you might want to watch out for icebergs AFTER you already hit one and started sinking. John McCain did warn about Fannie and Freddie, which were much bigger problems, back in 2006 while there was still time to act. Guess Obama really doesn’t have any problem distorting the facts to make himself sound good in a debate, huh?
5) No Better on Iraq
a. Originally stated that he was going to pullout with set timeline
b. John McCain stated get out when it was responsible to do so
c. Has realized that McCain was basically right, now wants a timeline that can be adjusted based on “conditions on the ground”
d. His “timeline” and the McCain plan for withdrawal look very similar, so if you want troops out of Iraq quickly would be surprised if either does it materially quicker than the other
e. With McCain at least know will do responsibly
6) Getting False Credit on Economy/Democrats more at Fault on Housing Bubble
a. Blamed current economic condition on Republican deregulation, fact is there was no substantial deregulation over the past 8 years
i. Last major piece was in 1999, repeal of Glass-Steagall act which then allowed investment banks, commercial banks, and insurance companies all to be under one corporate umbrella, this was signed into law by Clinton, but we shouldn’t blame Clinton because this deregulation really had nothing to do with this financial collapse
b. Democrats pushed for heavily pushed for “affordable housing loans”, these loans now turning bad, which has been major cause of crisis
c. Republicans (Treasury Secretary Snow, Sen Hagel, later Sen McCain) all pushed for stronger regulation of Fannie Mae, Freddie Mac which was defeated by Barney Frank, Chris Dodd and other Democrats
7) There would be NO CHECKS OR BALANCES
a. Democrats likely to get 60 seats in Senate, filibuster proof majority
b. Democrats will solidly control House
c. Have most liberal Senator, who may have moderated some of his views while on the campaign trail, but whose basic ideology for most of his life has been extremely left. While his current proposals, particularly his economic proposals are scary, risk of him returning back to even more extreme, radical views, and having nobody to balance him out
d. Even if you don’t like McCain, having someone to put some checks and balances on Washington is extremely important, McCain will keep Democratic Congress in line and they in turn will keep him in check

So Obama has been beating up McCain on healthcare policy. And as usual he has been distorting the facts in attempt to confuse the American public about what the McCain plan actually is, in order to scare them into thinking that his plan is better. Should we really be surprised? Then he makes it sounds like his plan is the same thing you have now, only with a new option. Which at first glance is what it looks like, but not when you consider human behavior, simple economics and think about what things will look like in a few years.

Now, you might say Obama isn’t trying to mislead the American people, he just doesn’t understand the McCain plan. Well that might be possible, but it seems unlikely as one of Obama’s top economic advisors ended up recommending a plan that was similar to McCain’s so he has people on his team who are very familiar with the plan. It just wasn’t close enough to the socialized medicine that Obama wants so Obama launched his own plan.

So let’s first look at the McCain plan. The big criticism of the McCain plan is that it taxes the benefits you currently receive from your employer “for the first time ever”. What the Obama ads leave out is that you get a tax credit that will more than offset the additional tax cost for almost every American. See a good policy costs around $12,000 for a family. The highest tax rate in the country right now is 35%. So if you are in the highest tax bracket you would be taxed $4,200. But you would get a tax credit back in that same amount for having health coverage so really there isn’t any real tax increase. In addition you would have an additional $800 in tax credit potentially available for other healthcare spending needs. That doesn’t sound so bad does it? Also this is if you are in the highest tax bracket. If you are in a lower tax bracket the math becomes even more compelling.

So what good is the McCain plan anyway and why is it different? Well the McCain plan allows those who have employers who don’t offer healthcare to buy the same health coverage with the dame tax benefit as those whose employer does offer coverage. Just because you can’t get coverage through your job doesn’t mean that you shouldn’t have the same tax breaks as someone that is able to. So his plan is fairer, as it allows people who are self employed, whose employers don’t offer coverage, or people who don’t like the coverage offered by their employer to get coverage elsewhere and still have the same tax breaks as everyone else. This will encourage more enrollment. In addition, if you decide to get coverage outside of your employer, you still have your same tax benefits that you currently have, except if you change jobs you don’t necessarily have to change your coverage. So if you like your coverage and hate your job, you are not as locked into your employer as you once were.

So those benefits are nice, but is there anything more that the McCain plan tries to accomplish? Well yes there is. The McCain plan is setup in a way that you get the most benefits if you enroll in a high deductible plan with a health savings account. See a high deductible plan has much lower insurance premiums, so you can take your big tax credit that you get back from the government and use that money to open up a health savings account. Once again this is only if this type of plan makes sense to you, you aren’t forced into it. But as more Americans decide they like these types of plans, you will get more people with insurance coverage that protects them if anything bad happens, but they get to direct how their money is spent for routine care. And once it is their money, consumers tend to be more careful. So as opposed to having people not care about the costs, not shop around for the best care at the best price, you will have people make better healthcare purchasing decisions. This will ring a ton of excess costs out of the system which is good for everyone. And once again, you only need to be one of these smart consumers if you choose to be, otherwise you can get the normal plans that everyone is used to.

So the McCain plan, once you examine it, really isn’t that bad or scary. You basically get what you have now, only you get the option to have your care more portable or structured in a way that is more economically friendly. So let’s take a look at the Obama plan.

Well the Obama plan sounds great at first blush. Keep your current coverage or enroll in a government option. But here is where the trouble comes in. Once it becomes cheaper for your employer to enroll you in a government plan vs the plan you are currently on, your employer will drop your coverage and switch you to the government plan. This has happened before when similar plans were offered in some States. So you thought you had a choice, but in reality you really don’t. So now you have to be in the government plan, see the doctors available in that government plan, and really don’t have any other option except to go to get insurance on the individual market which is notoriously expensive. Welcome to socialized medicine.

Now let’s look at his individual market proposals. They sound great. He wants to force insurers that offer an individual plan to take anyone who applies. What a great idea. The unfortunate thing is, if a Company has to take anyone who applies, why wouldn’t someone go without coverage until they get sick, and then enroll? If someone offered home owners insurance that you could buy after your house burnt down, would you buy it before or after? Why not just wait until you really need it?

Well even if you don’t think that way, there are a lot of people who do. So what has happened in States that have mandated that insurers offer guaranteed acceptance products? Insurers have basically left those markets, so there are really isn’t private individual insurance available anymore, or if it is available it is so expensive that it is cost prohibitive. Don’t worry there is always the government plan.

So here is where the economics as a tax payer really start to hit you. Who ends up in the government plan? It ends up being a collection of people who didn’t get coverage until they got sick and employees of firms who found it cheaper to get government subsidized coverage. So the only people who go into that program are the ones for whom insurance cost a lot more in the private market. So how is the government able to offer coverage so much cheaper? Well it has your tax dollars to spend. This thing sounds better by the minute.

So here is where his plan really breaks down. And you have seen it before once again at the State level. Once subsidized care is available and it makes economic sense to switch people do. This means more people take advantage of that subsidy and the cost of the program grows rapidly. Free money available to those that want to take it a lot of people show it. And remember it isn’t free money to those who are responsible. It is free money to those who decide to not get coverage until they are sick or free money to employers who decide not to offer healthcare coverage to their workers.

So what we have seen in previous examples at the state level, is that in the first couple of years people really like the program, the program swells and then crushes the budget of the State. The costs to the government grow out of control, and benefits and those that are covered need to get dramatically scaled back. So if you are one of the unfortunate ones in the program, your healthcare coverage is much worse and if you are an unfortunate tax payer you are indirectly footing the bill for someone who is being less responsible.

So Obama has a lot of money to throw around on advertisements to make his plan sound much better. His plan looks like the plan of choice, while McCain’s plan looks scary and confusing. But peel back the rhetoric, look at the underlying plans, and think about human behavior and basic economics. The McCain plan empowers the consumer but also allows people who are happy with the current system to experience very little change. The Obama plan will create a massive government program that will at first punish the tax payers and then later potentially punish those who are unfortunate enough to be enrolled in it.

In the latest scummy move from probably the most despicable campaign I have seen in a long time, the Obama team has yet again attempted to silence the media. After getting some tough questions, as opposed to the usual softballs thrown to them by most of the media, the Obama ticket has decided to cut off WFTV’s access to their campaign. This follows other “protests”, call-ins, and intimidation tactics on other media outlets that the Obama campaign has come to favor.

A news stations job is to report the news. By boycotting a news station, you make it tougher for them to do their jobs, and make their stations news stories less competitive. Nobody wants their station to no longer have access to the primary newsmakers, so a major political campaign causes real harm to that business and the people who asked the question. It is clearly an effective way to intimidate the media, and the begs the question is this what we want our politicians to be doing? What happens once they get into office? Will anyone who questions their policies or critizes them get cut off?

What makes this so ubsurd, it is not like the station was making up stories and spreading false rumors. They were asking questions, albeit tough questions, but they asked questions of Biden that he was free to answer how he saw fit. There wasn’t any distortion of facts (unlike the CNN interview of
Palin), there were only questions. Could you imagine what the response would be if the McCain-Palin ticket tried a similar tactic?

Liberals will often complain about the Bush administration and how they control information. If they think that is bad, wait until Obama and Biden get into office.

I need some help figuring out how people are buying into all of Obama’s campaign promises without bothering to figure out whether or not what he is claiming is feasible. At a time when our Country’s budget is already stretched to the maximum, Obama is proposing a “tax cut” for 95% of Americans (including those who don’t pay federal taxes), universal government funded healthcare, energy investment, education investment, healthcare IT and research investment, massive foreign aid, and a laundry list of other spending which will all add up to spending increases of around $1 trillion. And anytime someone brings up a new issue, it seems that his response is to throw more dollars at the problem. Voters seem to love this, clearly the media does, but none of these people seem to bother to ask where the money is coming from. On occasion when Obama is asked, he basically says he may have to delay some of the spending but won’t give any specifics and people have decided that is a good enough answer for them.
It is not like these promises are coming from a guy who has a long track record of keeping promises. He ran for the Senate on a platform of middle class tax cuts (sound familiar?) and then once elected voted for tax increases on most Americans, including the middle class. He also promised to take public money only to break that promise as well.
The middle class Americans who are voting for this guy are going to be in for a rude awaking once he is in office. They will likely find their expected tax cuts turn into tax increases, and all of the wonderful programs they thought they were going to get “delayed” until the next political campaign. It will be a lesson for all, unfortunately it is one I would rather not have taught as it will be just as painful for those who questioned the proposals from the start.

Would you believe that the leading Presidential candidate has the following resume?

1) A man who has spent a whopping four years as a US Senator, and whose single significant accomplishment while a Senator was delivering a good speech in 2004.
2) A man who in his four years in the Senate has not authored a single major piece of legislation, but has authored two memoirs.
3) A man who has absolutely no executive leadership experience, outside of leading his campaign.
4) Someone who has broken significant campaign promises prior to even winning the election and taking office.
5) A man who was friends with an unrepentant terrorist.
6) A man who sat in the church of Reverend Wright for 20 years, a preacher who has condemned the United States of America.
7) A man whose wife was only proud of her country once her husband won her party’s nomination for President.

That is the power of marketing at work, and the Obama campaign managers need to be commended for doing so much with so little. The McCain campaign on the other hand has been an absolute disaster. They have been able to take one of the most experienced, well respected Senators in our nation’s history and have him running behind one of the most liberal and extreme politicians in our country today.

McCain says fight with him, but where is the fight in his campaign? He will go on the attack up until the point where the other side confronts him about it and then backoff for no reason. This whole idea of not wanting to seem negative has been taken to a ridiculous extreme. On the Chris Wallace show, for some reason as opposed to stating the truth, that Obama is a socialist, he said he has “socialist tendencies”. Yes, and Osama Bin Laden has “terroristic tendencies”. Let’s call a spade a spade. Obama wants big government. Obama wants to tax and spend. Obama wants to use government to redistribute wealth. In Obama’s ideal world we would have nationalized healthcare. Obama is a socialist, unless they have changed the definition of the word.

Let’s hope McCain decides to really fight over the next couple of weeks and starts to really call out Obama on his policies. He should get aggressive and not worry about what criticism is lobbed at him by the left (they weren’t voting for him anyway). I would rather have a President that plays Karl Rove politics than one who follows Karl Marx economics.

So on the heels of Lewis’s comments this has to be the most ubsurd claim of racisim in this campaign yet… Obama’s advisors are claiming that McCain’s comparison of Obama’s tax plan to welfare carries a subliminal racial message.

This is really outrageous. Obama’s tax plan calls for “tax credits” in the form of checks from the government to people who don’t even pay federal taxes. The program that this is most similar to is welfare. Plain and simple. To say that there is anything racist about this comparison is so digusting that their camp loses what limited credibility they had left. The Obama camp really has no shame.

Outside of being the most liberal, big government senator whose economic policies will wreck this country, the scariest thing about Obama is that he will actually be able to get many things done given the makeup of the House and Senate. Someone in the media needs to take a look at what has happened when ANY party has controlled both Congress and the Presidency. Someone in the media also needs to point out and emphasize that under an Obama Presidency his policies will be implemented basically unchecked and with very little real debate. Under a McCain Presidency every single one of his proposals will be thoroughly vetted, debated heavily, and only the ones that are obvious to the American people as beneficial will be enacted. This is a key issue, and one that the media hasn’t focused on.

As a second point people need to focus on the inflationary impact of an Obama Presidency. The government’s credit card is maxed out, and at some point our creditors (China, Middle East, Etc.) are going to focus on other places to put their money. When they do the US dollar will be subject to a massive devaluation and inflation in this country will run rampant. The only rational way to avoid this is to dramatically curtail government spending. The only candidate that has the potential of doing this is John McCain. Obama’s plan to massively increase government spending could be enough to push the country over the edge.

By the way, the $800-1000 billion dollar increase in spending that Obama’s plans will cost could be a dramtically understated number. Look closely at his healthcare plan, and then compare that to some state plans such as Tenncare in TN. Tenncare was basically a medicaid plan that was widely available and the benefits were similar to those offered by employers. Massive numbers of employers dropped coverage, moved people into the government program, and the costs of the program ended up spiraling out of control. It eventually got so out of control that it threated to bankrupt the State (it grew to be over a third of the state’s budget). At the end of the day Obama’s plan will eventually have the government plan grow to a point that it is almost a nationalized healthcare system, the system will cost substantially more than originally projected (I would love to see their estimates for healthcare cost inflation), and the government will be forced to massively cut the program back or dramatically reduce the coverage offered. In a nutshell it has the potential to be a disaster.

Obama has been claiming that he sounded the alarm bell early on the economic crisis due to the fact that he sent a letter to Bernake and Paulson addressing the subprime mortgage situation. This claim is ridiculous and stretches the bounds of what would be considered “truthful” for the following reasons:

1) The letter was sent in March 2007 well AFTER the vast majority of the loans had been made and after problems had already been surfacing. This is in essence being on the Titanic and mentioning that you had just hit an iceberg, the warning is way too late to be helpful.

2) The letter itself was not a warning of a potential economic crisis, it was a primarily focused on the impact to low income communities that the foreclosures were having. To keep with the above analogy this was basically like saying the water coming onto the ship was getting your shoes wet.

3) The subprime mortgage situation was one factor of the economic crisis but was not the only cause. The real cause of the crisis was the overall mortgage market, how lax the terms, lending requirements, and base assumptions on all the mortgage loans were getting, the ease and growth of corporate credit and how out of line terms on those types of loans were getting, and finally the extent to which all of our financial institutions had become interconnected (such as Fannie Mae and Freddie Mac and all the institutions that owned their debt).

So the fact that Obama would like to claim victory on calling the economic problems is a joke, like many other of the claims he has made throughout his campaign. He is not an expert on the economy, he is a guy who sent a letter way too late, focused on the wrong issue. Now if you say you don’t care about the past and let’s focus on the plans for the future, well his economic “plan” is to raise taxes, up government spending, and to basically bring back welfare in the form of “tax credit” checks to people who don’t pay taxes.