Political Subprime Madness

Unfortunately, as the subprime woes continue to play out across our country, we are faced with an ever growing possibility of the Democratic Congress using this situation as political power play for votes. The Christian Science Monitor has a solid article on how the Democrats are seriously eyeing a plan to have tax powers bail out Fannie Mae and expose citizens tax payers to increased risk that their “investments” may default. This is a terrible idea on many levels. First, we are disallowing the free market to self correct and once the government gets involved, it will not simply walk away in a year or two. Secondly, this violates a general principle of government, and that is, to do what is good for the majority of the citizens while providing the rules and laws that govern the land. In Congress’ minds, they are doing the “majority” a favor, but statistics will show a vast majority of homeowners have been exceedingly responsible and the current situation, in terms of sheer percentage of foreclosures, does not directly impact a vast majority of the nation. To step in and bail out a select few is yet another way the government is looking to choose winners and losers.

Is it really fair to allow this bail out to assist only those who were irresponsible enough to engage in bad loan behavior in the first place while charging responsible entities extra tax dollars to “correct” the problem? Bad decisions were made both on the part of lenders as well as borrowers and the lessons learned will undoubtedly self correct in short order, that is, of course, if the government does interfere. Additionally, as we see ballooning deficit spending, the government would be extremely irresponsible by exposing itself and the tax payers to high risk loans.

If individuals wish to engage in high risk loans they should rightfully be compensated, the higher the risk, the higher the interest paid and this “investment” would be much riskier than junk bonds. It is the not government’s role to fulfill the type of function they are dangerously close to undertaking. As they pour tax dollars into this program they will widen the deficit. An agency as dysfunctional and wasteful as the federal government has become has no logical reason to get involved in this situation without further damaging itself. If this were even a case of a simple shift in tax dollars in one area to another, I would still oppose this measure. Worse, it will create yet expenditure without a corresponding cut in spending. All for votes. Are we left with no statesmen or even rational politicians?

-Caomhin

Al Gore's Business Plan: Initial Investment + Fear Tactics = $$$$

Wow. Gore had less than $2 million dollars in assets less than 8 years ago and now he has enough cash to be able to INVEST $35 million dollars in hedge funds? That's quite a return on investment. He planted the seeds for this a long, long time ago, sunk investments into the companies that he could buy shares of dirt cheap and then was able to use his considerable political and "celebrity" influence to play up the global warming hoax hysterics to high enough level to achieve and annual return on global warming of at least 400% per year. That's quite a haul. He is also a little testy about inquiries into his investments:

``He is a private citizen, and as a private citizen he has never commented on his private finances,'' said Kreider, who works out of Nashville, Tennessee.

He doesn't have to, most of us who are following the events closely know how he was able to accomplish this.

-Caomhin

Investors Fear a Democrat Victory

Indeed, Wall Street is worried about the upcoming elections. Though the article unfairly takes some swipes at Gov. Huckabee for being "a loose canon" and comparing him in some regards to, ugh, John Edwards (which is incredibly unfair to any human being), it underscores a point that most people with any level of economics already knows: Democrats will hurt the economy. Arguments will come from the left that the 90s saw unprecedented growth, which, indeed it did, under the supervision of a Republican Congress, who was able to overcome many of the shortcomings of Bill Clinton. The economy is taking a beating in the liberal media, as I suppose they figure that if they can't lie to the American public about Iraq anymore, the economy should be the next target. We are no where near a recession, we have not had a single quarter of negative GDP growth and will not have one this quarter either. It's a lie.

The Congressional Democrats are all protectionist, tax loving, economy killing Liberals who will most certainly cause a recession unlike anything seen before if a Democrat is election President. Yes, it will be worse than Jimmy Carter's time in office. This batch of Democrats don't even have morals, let alone any shame, and their policies will nearly cripple businesses as they scramble to readjust. I know the prospects for a Democratic Congress are very likely, which is why this presidential election is so immensely important. We need someone in their who can wield a veto pen like crazy, and I believe our batch of candidates will be willing and able to do so. As taxes increase, it is we, the electorate who will feel the burden, as the cost of the tax increases will be passed along to us. The bottom line in capitalism is profits and industries will not simply take a loss when Congress slaps them with taxes in addition to personal tax raises. The industries will in turn, reflect these tax increases in the prices that we pay for our goods, thus causing the inflation tax. Additionally, taking hostile steps against the world community by threatening tariffs and isolationism, will not bode well for American products or the strength of our dollar and reflect no confidence in American manufacturing products, skills, et al. Incredibly, the Democrats villanize companies and the profits they make and demand that their profits fall and that the revenues are shifted to the government, not individuals mind you, all in the name of helping the average person without actually helping the average person. It is outrageous that all the while ravaging the free market and corporations, that the Democrats are so horribly dishonest or stupid as to not realize that pensions are a dinosaur and that our retirement funding is only as dependable as our 401(k)s and not Social Security, which they have horribly mismanaged for decades. Indeed, when corporations do well, we ALL do well, since our retirement portfolios, at minimum, increase over time. The Liberal system promotes an economic slavery of sorts, one in which they boo-hoo the power of the individuals to keep their own money and grow it in the free market with security in the 401(k), and attempt to strip us all of the ability and opportunity to see a windfall in the free market. The Social Security system is horribly broken and will only be "fixed" by Democrats with yet another tax hike that will lower disposable income, which lowers consumer expenditure and lower the value of the market. I could write scores of volumes on these issues, but I suppose it's best to stop here for now.

I'll conclude this post with some samples from the article for your reading pleasure:

"None of the Democratic candidates would give me any confidence in the economy because we're talking protectionism, which is always, always extraordinarily bad. We're talking about tax hikes, redistribution and none of that is good," said Mark Coffelt, president of Empiric Funds in Austin, Texas.
...
Among Democrats, Edwards wants to increase the tax rate on long-term capital gains to 28 percent from 15 percent, and tax dividends as ordinary income. Obama favors a rate of between 20 percent and 28 percent on capital gains and dividends.

It should be duly noted there is no mention of Hillary Rodham Clinton in this article. I'm sure part of it has to do with her having no experience or achievements to speak of, nor any logical understanding of what an economy even is. Not even a peep of criticism. Being a MSM article though, you know who they are pulling for, so that's not hard to figure out why.

-Caomhin