Posted by
beltway girl on Sunday, September 21, 2008 3:16:17 AM
Before the announcement of the AIG bailout, John McCain and Barack Obama were locked in battle, entrenched in the deadest of heats.
Today's national Gallup poll shows Obama up by six points. Six points is not chump change in such a race. Although still close, this relatively modest lead now threatens to widen, and perhaps even explode. If it does, it will not be attirbutable to Barack Obama's economic wizardry, nor to his charms and talents; it will be because of this nation's ongoing economic collapse and popular perceptions of our country's two political parties.
Democrats, since the time of the Great Depression and FDR, are viewed as the party protective of the working-man, his security, and his vote, while Republicans conjure up ugly images of economic disaster and Hoovervilles.
It has been an interesting year leading into this brave September, and it has been quite a dining experience and bill served to our White House table by the waiters on Wall Street.
First, there was Bear Stearns. According to Wikipedia, Bear Stearns was one of the largest global investment banks and securities trading and brokerage firms. But they got into serious trouble in the subprime mortgage crisis. "The Fed, using a procedure from the Depression Era of the 1930s, raced to the aid of Bear Stearns... alongside JP Morgan Chase. Bear Stearns had made a fortune in mortgage-backed securities but faced a possible collapse after those investments soured. Wall Street plunged as fears spread jeopardy."
http://www.iht.com/articles/2008/03/16/business/paulson.php
The tab for taxpayers? A $29 billion loan to JP Morgan Chase for its purchase of Bear Stearns.
Ah, and then, there was Indymac, most to be noted for its twenty-first century news coverage of a real run on a bank. Looking like a not-so-wonderful life for the economy, Indymac made history with images of people lining up to demand cash to put in their mattresses. The tab for taxpayers? Existential. Indymac collapsed.
Next, we have Fannie Mae and Freddie Mac. Who are Fannie and Freddie? "These are two government-sponsored enterprises, created with the primary mission of stabilizing the market for residential mortgages in the United States. They are under the regulatory control of the government, but issue debt and shares of stock in the financial markets. Their size is enormous, representing more than $5 trillion in financial market obligations and being associated with almost half of all U.S. residential mortgages."
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/09/20/INA112VO9M.DTL
Fannie and Freddie were, evidently, dysfunctional liberal wunderkinds. Speaking about the Fannie and Freddie, one writer notes, "
Topping the list of the 250 largest publicly traded companies which disproportionally fund left-wing groups over right-wing is Freddie Mac, which scored an 'F' on the Capital Research Center’s 'Patterns of Corporate Philanthropy' study for being overtly polarized in their philanthropic giving." http://frontpagemag.com/Articles/Read.aspx?GUID=E24728A4-41B9-4C4C-B9B3-E0ED65397BB9 The article goes on to describe the left-wing bent of the Fannie organization: "Fannie Mae is as well culpable for funding a host of left-wing groups. Recipients of their funds include the Association of Community Organizations for Reform Now (ACORN), and the Center for Community Change. ACORN, the self-proclaimed largest left-wing activist organization in the nation, implements an anti-capitalist agenda which has roots in the National Welfare Rights Organization – a 1960’s radical group formed for the sole purpose of inundating the welfare system with enough recipients to break America’s financial back. The Center for Community Change’s goal is to 'create better communities and policies' – it hopes to achieve this goal by enlisting such celebrity notables as Susan Sarandon and Russell Simmons to propagate the message to vote Democrat."
An interesting aside to all of this would be that Obama was in the US Senate for about 150 days before he announced his candidacy for the President of the United States. But even in his rather short stint as senator, he managed to get to #2 on the Fannie-Freddie contribution list, 1998-2008. He's one notch below Chris Dodd (D-CT), with about $127,000.
The tab for taxpayers? According to the Huffington Post, it could be anywhere from nothing to $25 billion.
http://www.huffingtonpost.com/2008/07/22/fannie-freddie-bailout-co_n_114331.html
And now, we have AIG, a major insurance corporation. Like others before, and unlike Lehman Brothers, which also came along this year but was rejected for a bailout, AIG was deemed too big to fail. Cost? Immediate cost will be $85 billion, but in a buy like this one, the government has often made money.
All of it in concert has voices rumbling on both the right and left-- but mostly the left-- about another Great Depression. Those of us who go through life without a crystal ball or other gypsy tricks simply don't know, but many don't discount the possiblity. Some wonder if this isn't an unprecedented collapse in our economy.
It's really not. As NPR reports, "The mechanics are different, but the shock was the same in 1980, when the federal government swooped in to save the Federal Savings and Loan Insurance Corporation. Economist Bert Ely details 15 public policies that set the stage for the S&L implosion -- to the tune of $175 billion in taxpayer money. 'The extraordinary cost of the S&L crisis is astounding to every taxpayer, depositor, and policymaker,' Ely writes. Bailing out Fannie and Freddie could be much, much cheaper, at least relative to the current overall economy."
http://www.npr.org/blogs/globalpoolofmoney/2008/09/the_fannie_and_freddie_bailout_1.html
It's really not unprecedented, although the so-called mainstream media is reporting it to be. As we can see, this has happened before, and it was on an even grander scale. The difference?
We were not in an election year. With the liberal, lightweight darling of the media, Barack Obama, running against a moderate Republican with a surprisingly good chance at victory. The media is out for McCain's blood after the choice of Palin, a pro-life, conservative woman, trumping their Hillary nod, which ultimately met rejection for the veep post on Senator Obama's ticket.
Senator Obama hit high on the Fannie and Freddie list, and we can see where that has brought us. His ideology blinded him to the well-being of the nation's economy. It has blinded him before, as the Weekly Standard noted:
"A watershed moment in Illinois's fiscal decline came in 2002, when crashing receipts and Democratic reluctance to enact spending cuts forced Republican governor George Ryan to call a special legislative session. While Ryan railed at legislators for refusing to rein in an out-of-control budget, the
Chicago Tribune spoke ominously of an 'all-consuming state budget crisis.' Unwilling to cut back on social welfare spending, Obama's chief partner and political mentor, senate Democratic leader Emil Jones, came up with the idea of borrowing against the proceeds of a windfall tobacco lawsuit settlement due to the state... What was Obama doing while all this was going on? He was promoting the tobacco securitization plan in his
Hyde Park Herald column, railing against the governor in the
Defender for balancing the budget 'on the back of the poor,' and voting to override cuts in treasured programs like bilingual education. Actually, far from 'balancing the budget on the backs of the poor,' the governor had trimmed evenly across all the state's most expensive programs. In the end, Ryan did force a number of cuts, yet the resistance of Obama and his allies took a toll. When, just a year later, Democrats added control of the governorship and state senate to their existing control of the house, they revealed that the state deficit had reached $5 billion-far larger than most had feared. Since then it's been a swift downhill tumble toward fiscal implosion for Illinois. Now ruling, the Democrats have continued their profligate ways, pushing the state's budget woes to new heights."
http://www.weeklystandard.com/Content/Public/Articles/000/000/015/386abhgm.asp?pg=2
Not wanting to balance a budget on the backs of the poor is an admirable sentiment; but as Hillary Clinton repeatedly pointed out in her primary battles against Obama, sentiments are not enough.
In this race, John McCain has the credentials and experience to do what Obama thought was unthinkable in Illinois; McCain can potentially put the economy on the right track on no one's back via true bipartisan efforts. In the midst of financial fears and financial crisis that is "unprecedented," according to our mainstream media, but which is really not "unprecedented" at all, John McCain alone has the experience to take the reins of the economy, for both rich and poor, and make the economy work, thereby restoring its health. Barack Obama could not do that in Illinois, nor will he do it for the United States. Barack Obama was able to lead his own state to financial ruin in the name of fairness. Perhaps, on the federal level, it would be best to elect a candidate who can lead us to financial success.
Wall Street has, indeed, crashed before our eyes. It would be in the best interests of the nation for this maverick not to crash with it, as his administration offers far more of a promise of unbridled success for our economy. Wall Street to Main Street is a catchy line, but the Main Street of Illinois is still struggling to recover from the fiscal barking of that dog that could bite, Barack Obama.