The Wall Street Journal and others have labeled the drop the “Barack Market,” reflecting the higher taxes on everything from capital gains and dividends to income and increased regulations. They are right, but they are thinking much too narrowly. Much, if not all, of any recession and economic problems is due to Democratic policies.
The media focuses on the drop in housing prices, consumer purchases or stock prices as the cause of economic problems, problems that they view as unrelated to Democratic policies.
The financial problems seem obvious. Democrats have been the ones pushing for federal regulations that forced financial institutions to make risky loans either though the threat of penalties from the Federal Reserve or through subsidies from Fannie Mae and Freddie Mac. They protected Fannie Mae and Freddie Mac from regulations
Obama himself played a role in creating these problems, and not just because he supported these Democratic policies. Take his policy where judges will be able to step in and rewrite home mortgage contracts unilaterally reducing the amount that homeowners owe and reducing their interest rates.
How would such a policy affect the willingness of banks to lend money for new mortgages? It likely even affected the market before the election. If you thought that Obama could win, would you want to loan money for people to buy homes if a judge could lop off a $100,000 from what is owed and cut interest rates? Lenders don’t even know how much the government would possibly reduce what would be owed. Many lenders this year simply didn’t want to take such incredible risks.
What does that do to the price of houses? Obviously, when people have a hard time borrowing money, there are fewer buyers and prices go down.
What about Obama’s campaign promises earlier this year to double the capital gains tax? Surely that hits stock prices hard.
The truth is comong out! I said away back when the democrats took charge of congress and the first thing they did was to raise wages! I said at the time that prices would go up to cover the cost for the businesses. Then on top of this the democrats were forcing fannie mae and mac to give loans to people that they knew could not repay them. When all this hit the headlines just before the elections It seem to me that it was all plan to go against the republicans so that Obama could win the election.
LINKS:
(1) Naked Emperor Paulson: Hey, gimme the rest of TARP dough Michelle Malkin
(2) Fox Biz Net sues Paulson over bailout secrecy Michelle Malkin
goodtimepolitics
6 responses so far ↓
lukemcgook // November 19, 2008 at 10:04 am
People have been conditioned by the media and education establishments, for over 70 years now, to blame *all* bad economic news on the R’s. It may be that McCain could have done better by running against Barney Frank and associates; but, without honest media, things were probably hopeless after mid-September.
csalafia // November 19, 2008 at 1:01 pm
Much, if not all, of any recession and economic problems is due to Democratic policies.
Not the out of control spending? Not deregulating the banking industry? Not deregulating credit swaps? Not cutting taxes but not spending? Not borrowing more money than every previous administration combined?
It’s all the “Democrats” fault?
In the words of the Mythbusters, sounds like the WSJ’s mantra is “I reject reality and substitute my own!”
lukemcgook // November 19, 2008 at 1:33 pm
csalfalfa, I know your questions are rhetorical, but if you took off the question marks, you’d be exactly right.
csalafia // November 19, 2008 at 6:41 pm
Actually luke, they weren’t rhetorical.
To ignore the massive deregulation pushed by the Reaganites, the cost of two wars, the explosive spending, and the largest borrowing in 232 years as being responsible for the current crisis is to be intellectually dishonest.
An unregulated free market will not work.
Regulation exists to save capitalism from itself. Every deregulated market in recent history has resulted in an economic mess: California utilities, oil speculation, banking, accounting/auditing, credit default swaps…. all of them resulted in scandal and fraud.
If one had paid attention, they’d have seen this crisis coming on like a freight train years ago.
….and it wasn’t because of Obama.
goodtimepolitics // November 19, 2008 at 8:46 pm
More and more people are seeing the root cause of the melt down, and the democrats will do anything to cover up the fact that we where doing fine until after they took control of congress. Prices has steady climbed ever since the democrats control congress.
Here is an interesting blog!
http://dancingfromgenesis.wordpress.com/2008/09/30/who-to-blame-for-mortgage-fraud-crisis-bailout-is-democrats-community-reinvestment-act-affirmative-action-predatory-lending-what-caused-subprime-lending-disaster-was-fault-of-democrat-congress-prote/
lukemcgook // November 21, 2008 at 9:25 am
Well, csalafia, this is quite the ball of confusion.
1) “If one had paid attention, they’d have seen this crisis coming on like a freight train years ago.
….and it wasn’t because of Obama.”
I’m assuming your talking about the same crisis Lott is talking about, the housing bubble, its inflation and deflation — the crisis a lot of people did indeed see coming. If that’s what you’re talking about, then the record is pretty clearly one of profligacy, coercion, and racial pandering by Congressional Donks, the Carter and Clinton administrations, and, in a supporting role (he never really does anything on his own), Barack “Go Along Get Along” Obama. Details available upon request.
2) “To ignore the massive deregulation pushed by the Reaganites, the cost of two wars, the explosive spending, and the largest borrowing in 232 years as being responsible for the current crisis is to be intellectually dishonest.”
You’ll have to be little clearer. How did two wars and a lot of deficit spending force banks to make the comedy loans now defaulting so predictably? And as for deregulation, the all-purpose boogie on the talking-point left, sure, there’s some optimal level of regulation. GSE’s like Fannie and Freddie, for instance, demand constant oversight and restraint (see “Congressional Donks” for the failure to oversee and restrain), but we have to be careful with the private sector. Regulations that force banks to make bad loans seem sub-optimal, don’t you think? Even Nancy Pelosi wants to revisit Sarbanes-Oxley, the regulatory product of the “California utilities” affair, since the burden on start-ups is a job-killer. (Less burdensome for the big guys, of course. Lots of regulation is just wealth transfer in disguise, and not always in the direction of the designated victim groups.) And don’t forget that regulation, in general, is fraught with unintended consequences. Here’s a note on what will shortly be a booming academic field, “regulatory arbitrage,” in this case the story of how FDIC requirements actually *created* a demand for certain exotic securities, many of them toxic.
http://econlog.econlib.org/archives/2008/10/some_useful_not.html
So, moving on, the WSJ article that cued Lott’s is all about the Obama stock market and how savers and investors are dismayed by the prospect of new taxes on saving and investing. My question for you is, how does Obama propose to do all the stuff he’s talked about without the tax increases that will aggravate the recession and without the deficit spending that leftists so deplore of late? How’s he going to fund the “bold new opportunity agenda,” not to mention healing the planet and conquering sin in general?
There’s life-enhancing irony here. Bad D policies blew up and, with a shove from the media, got their boy elected. Now the new D prez has to deal with the blow-up.