Democrats & Liberals Archives

They Say, "It's The Economy, Stupid." Is it?

Barack Obama is holding a gigantic lead, and everybody’s saying the economy did it. But is it just that? I don’t think so. I think there’s something else at work that made the economy Obama’s friend.

First, Obama recognized the problem long before McCain did, and didn't need to take that hairpin turn as to what was happening. People might become a little oblivious to events over the course of an action-packed campaign, but they're not that stupid. McCain made a sudden change on the strength of the economy, and people know that. McCain's other past changes of position are also known, though further in the past. McCain's support was more provisional from the beginning. To extend the automoive figure of speech, when McCain took that hairpin turn, his voters weren't necessarily well-secured cargo.

Second, Obama's response created a positive overall sense of this temperament. Rather than make dramatic gestures, with wild hand-waving about what he was going to do, Obama kept his distance and let the people who were actually in charge of the situation take care of it. He then came out with a reasonable set of principles for a better version of the bill. When the first version of it cratered due the Republican failure to deliver votes, Obama hadn't been congratulating himself on getting it passed! Nor did he start blaming the other candidate for the bill he voted for. Obama's behavior implicitly spoke to his leadership qualities.

Third, Obama presents himself well as a true agent of change. McCain has the problem of essentially advocating policies that people either don't believe he'll go through on (re-regulation) or policies that are obviously continuations of the current administration. With his rhetoric about the dangers of tax raising, about using the free market, he's sounding like the Bush Republican he made of himself. Like a professor of mine once said, a difference, to be a difference, must make a difference. Voters are having trouble seeing the difference between McCain and the man he hopes will be his predecessor in the office.

Fourth, McCain's increasing, incredible negativity, particularly his cold-war rhetoric about socialism, has demonstrated a certain level of contempt for the voters, whether that's contempt for their asking for help, contempt for their intelligence, or contempt for politics that the voters themselves do not see as deserving of such smearing. The collapse of the Republican Party's power has been accelerated, in my opinion by the last kind of contempt. It's easy to tolerate negativity from those who are on your side, but when you part ways with your party and suddenly find yourself the target of corrosive rhetoric, you might find yourself transitioning from merely disgruntled or uncertain to strongly opposed to your former party.

What made the economy a strong, distinguishing issue for Barack Obama is that he really didn't have to move too far to present himself as the agent of change he was from the beginning. He didn't try and hog the glory, or put himself in the position leading the Charge of the Light Brigade, squandering credibility and giving out an image of political incompetence. He's moving with the rest of the nation on a policy of positive, active regulatory reform, and is not saddling himself with the need to defend the status quo in politics, much less the policies of the current "decider" in office. Lastly, he's doing so in a classy, friendly way, not blasting those who disagree with him by calling them commies and pinkos. He's got the advantage of an audience predisposed to changing in his direction, but even if he didn't, his dignified, values based rhetoric has broader appeal than McCain's narrower, more partisan friendly attacks.

Obama, most of all, has been himself. As I read through Barack Obama's bookThe Audacity of Hope, I'm struck by how much of his message from 2006 remains in his campaigning in 2008. Rather than run after the voters, trying to position himself in the short term to appeal to them in a short time, Obama has pretty much remained in the center, talking about the same policies he began speaking of when he started his campaign. Obama has not created the impression of strained efforts at persuasion that have haunted McCain. It's easier to vote for somebody who has that kind of integrity of purpose and policy, somebody who doesn't seem to be a simple weathervane. He looks more like a leader who can draw people to him when necessary, rather than a politician who pretends to be in control when he just rubberstamps his party's or special interest's agenda. People want a President who can truly change this nation's direction, truly lead it, not just pretend to as they follow the fickle winds of politics.

Posted by Stephen Daugherty at October 25, 2008 7:59 AM
Comment #268277

Very descriptive of a well oiled campaign, and a man in charge of it. And that may be mccain’s biggest failing…he has not seemed in charge of his own campaign.

Posted by: Marysdude at October 25, 2008 9:16 AM
Comment #268279

The better man is winning.

Posted by: googlumpugus at October 25, 2008 9:53 AM
Comment #268289

Thanks Stephen, Several factors are at play ,One of polls question was who do you feel more comfortable with Obama 47% McCain 41% , I think that was an important Question and people have had time to digest this campaign, we seen Obama climb up in the polls After the Democratic presidential convention and with the winds of natural order McCain caught up After the Republican Convention, and with the first Debate McCain was unprepared with a strategy of staying in congress to fix the bailout, I think it Backfired on him and the public has had time to look at Sarah Palin and the Hillary crowd that was angry with the outcome and was going to vote for McCain hell or high water and a lot of fence leaners are questioning her abilities now, And like I’ve said in other posts Obama has clearly outwitted McCain from the start that shows readiness and competence.

Posted by: Rodney Brown at October 25, 2008 10:51 AM
Comment #268294

This campaign reminds me of the Iraq stupidity…we went in like fury, became the owners of the devastation, claimed we’d won, then realized we were no longer in charge…mccain’s campaign is similar…he forgot it takes more than just flash. mccain had no follow-up plan…getting there was the goal…samo, samo, Cheney/Bush in Iraq.

Posted by: Marysdude at October 25, 2008 11:34 AM
Comment #268297

Excellent article Stephen as usual.
McCain was doomed before he started. The unholy alliance between business and religion had to fall a part sooner or later. They had a chance to win the president, but the religious side didn’t like Romney, and the business side hated Huckabee. So they settled for McCain. That could of worked, but before they would back him, they made him move to the far right. Even in the convention he was pandering to the base.

Back in February when he secured the nomination he should have stared talking about the environment global warming, clean air, clean water. He actually has a history with these subjects that gives him some credence.
Back in February when he secured the nomination he should have stared talking about extraordinary rendition, Gitmo, and the CIA. I’ll bet he could give a hell of a speech about why we shouldn’t torture people. There again his history gives him credence. Back in February when he secured the nomination he should have stared talking about campaign reform. lobbyists, and K-street. With his history we could have been convinced he was the one who would reform Washington.

Unfortunately for the Repubs these are all issues the party leaders (far right) don’t agree with. When your base is 25% to 33% of the population you shouldn’t insist your candidate marches lockstep it. Such blinding arrogance will insure the party stays in the minority for a long time.

Posted by: Mike the Cynic at October 25, 2008 11:51 AM
Comment #268303

The economy may be helpin BHO, but BHO is not helping the economy…

The market is in a poanic over the possibility of a dem veto proof controlled congress and BHO as president. He will kill small business and tax, tax, tax.

Posted by: Oldguy at October 25, 2008 12:20 PM
Comment #268304

Well said, as always. I agree, Obama is simply the better candidate, and the results would probably have been the same regardless of whether the economy tanked. Obama has a superb organization. McCain does not. Obama has a consistent message and a viable strategy (thank you Dean). McCain is running a horrible campaign, lunging from character attack to character attack. When it came to the country of Georgia, Obama gave a careful, measured response. McCain behaved like a hothead, a complete fool. The thing is, that has been the pattern regardless of the issue: Obama gives careful consideration, while McCain flies off the handle.

I believe the voting breakdown would be similar no matter the issues. The Bush supporters would stand behind McCain, the supporters of the War i Iraq, the bigots who would not vote for a black would do the same, a small fraction of independents would do the same based upon single issue considerations, and that gets McCain into the low 40’s, at best. Meanwhile, the left and the center would unite behind Obama, putting him into the mid-to-high 50’s.

Posted by: phx8 at October 25, 2008 12:41 PM
Comment #268306

It is confusing me to see how gullible people are. THE LARGEST SINGLE TAX ON THE POOR IS THE CORPORATE TAX. Think about it…. Put a big tax on Exxon or the other oil companies and they just raise the prices…. a tax on the poor much more than the rich because you can only use so much gas. Tax Pacific Gas and Electric and you get higher energy prices. Tax Albertson’s and you get higher food prices and on and on and on. Try the formula on any company and see what you get.

Posted by: Chris at October 25, 2008 1:43 PM
Comment #268308

That’s funny. I thought it was the hedge fund operators selling their investments to make up for everything they’ve lost. You know, the guys who were selling all those Credit Default swaps to people? The ones they couldn’t back, if they went down? There’s a reason this Mortgage Crisis affected AIG and Lehman Brothers, companies that were not involved in Mortgage Lending.

But I guess if your working theory depends entirely on the Mortgage Market souring, though, you’d miss that.

What is it about Republicans turning everything into a head game?

Posted by: Stephen Daugherty at October 25, 2008 1:45 PM
Comment #268310

I’m going to assume that you are a Republican or Republican-allied independent, so if I’m wrong here, please correct me.

Okay, what happens when you give that tax cut to the big business. Do they provide more money to the people at the bottom? No, we’ve seen them lay off people, cut benefits, do all kinds of things. Additionally, the idea that they’d pass that tax on avoids a critically important problem: they are essentially raising prices, which might have an adverse effect on their earnings. If they keep their prices low, though, people might buy more, with the additional money they get, and they’ll make up with volume what they lose per unit.

You’re also missing that the tax cut for the middle class makes it easier for companies to put off giving raises, which means they end up paying less in that regard than they might otherwise have to. Companies also earn more as people spend more in disposable income, and on credit cards which have had their balances paid down.

Ultimately, another factor is in play: if the average person doesn’t get help, who the heck are the big companies going to earn the money from? If the tax cut serves as an economic stimulus to their customers, we might see them take what might be unprofitable quarter, or at least less so, and make it better for them.

So what do you think is better: no profits and lower profits with lower taxes, or greater profits taxed just a little bit more? The big companies and big spenders cannot earn or invest money other people don’t give them.

Posted by: Stephen Daugherty at October 25, 2008 1:59 PM
Comment #268311


You are probably right about the companies needing customers to survive, and the best way is to make sure the customer has a larger disposable income, but…Jay Gould, the rail-road tycoon, once said that he didn’t care if anyone else had one or not, he’d be happy when he had all the pennies. Maybe Exxon/Mobil and GE feel the same way…?

Posted by: Marysdude at October 25, 2008 2:11 PM
Comment #268312

Oldguy: I hate to say this but, the market has almost always done better under Democrats and if you really are an old guy, you should know that.

Corporations have done far more damage to small business than tax policy has. Locally owned resturants, grocery stores, clothing stores, hardware stores, plumbers, heating and airconditioning, etc. almost all gone, replaced by corporations or corporate franchises. Perhaps it was Republican/Democrat corporate tax policy that helped to enabled this change.

Posted by: jlw at October 25, 2008 2:14 PM
Comment #268314

Today on my way to lunch, I passed a homeless guy with a sign that read “Vote Obama, I need the money.” I laughed.

Once in the restaurant, my waiter had on a “Obama 08” tie, again I laughed as he had given away his political preference, just imagine the coincidence.

When the bill came, I decided not to tip the waiter and I explained to him that I was exploring the Obama redistribution of wealth concept. He stood there in disbelief while I told him that I was going to redistribute his tip to someone who I deemed more in need, the homeless guy outside. The waiter angrily stormed from my sight in a huff!

I went outside, gave the homeless guy $10, and told him to thank the waiter inside as I’ve decided he could use the money more. The homeless guy was really grateful.

At the end of my rather unscientific redistribution experiment, I realized the homeless guy was grateful for the money he did not earn, but the waiter was pretty angry that I gave away the money he did earn, even though the actual recipient needed the money more.

I guess redistribution of wealth is an easier thing to swallow in concept than in practical application.

Get ready middle-class and hide your guns and bibles. All 3 branches will be just itching to get into your pockets but it will be for your own good. All hail Hugo Obama, your children will sing his praises.

Posted by: government knows best at October 25, 2008 2:26 PM
Comment #268316

Corporate taxes are passed on to the consumer? Perhaps. But if the consumer is taxed, the consumer will have less money to spend on corporate produced goods and services. So! Where should society raise the funds it needs to function and thrive? What should a society’s government do? The answer is obvious. Taxes should be progressive, and assessed against the entities with the largest incomes, whether those are rich invididuals or profitable corporations.

Everyone benefits when everyone benefits. What a concept.

Posted by: phx8 at October 25, 2008 2:30 PM
Comment #268317

Jay gould of “”D”” Tammany hall fame Robber baron. Got kicked off the Erie.

Posted by: Rodney Brown at October 25, 2008 2:31 PM
Comment #268318

It’s funny that McCain’s long-term friendships and “both-sided” working relationships in Congress ultimately failed, and as a result, we have Palin in the VP slot. Has anyone figured out yet, truly…..what he was thinking??? Her appearance rocketed the polls for a while, but the more she appeared, people started seriously questioning his logic and sense in his choice. Nobody started out to demonize the man, and he has been his own worst enemy in contributing to the state of his failed campaign.
Considering McCain’s age and health concerns, Palin became far more a central figure than may always be the case. It’s kind of the shame-on-you/me-once/twice thing and we were more diligent this time. The woman is deep into lies and mismanagement on more than one issue…..her “Troopergate” scandal continues as we speak. Her promise to make available medical records is still unfulfilled. This little tidbit on her way of doing things was just released a short time ago:

So, no….it isn’t just about the economy, stupid,….it’s more about just being stupid.

Posted by: janedoe at October 25, 2008 2:38 PM
Comment #268329

Are you confused, or wondering what Joe Biden Really meant about Barack Obama potentially being “tested” There is a simple explanation for your worries.. Ever since America has been America, every elected president in history has been “tested”. When John F. Kennedy was in office, his test came in the form of the Cuban Missile Crisis, which almost set off a nuclear war, but in the end, did not. Another example.. when George Bush was elected. very soon after Alkaida operatives, under Osama Bin Laden’s direction, flew a plan into the world trade center buildings. None of these things are Intentionally committed against the U.S.A, or the presidency for that matter, by an inside culprit, they simply happen, naturally, due to the inevitable dis-agreements, threats, economic differences, hatred, etc.. issues that every country suffers from around the World!. Every president in history, in every country has been un-intentionally “tested” by the powers from another country.. If this did not occur, obviously, there would literally be world peace, people!. This is simply what Joe Biden was conveying when he made his statement, and obviously alot of people with little or no “common political sense” understand what the Hell he meant, Omg!. Also, what Joe Biden meant when he said “It’s not going to be apparent initially; it’s not going to be apparent that we’re right.” obviously, has a similar meaning; not every president in history was praised for his decision making, but eventually.. we got through it, and it was later apparent that it indeed, Was the correct thing to do!, (Just like Abraham Lincoln freeing the slaves!). If after reading this, you still do not understand, or get the point, as simple as I have put it for you; then perhaps you should not be voting in the first place. Thank you for your time… and good luck!.

Posted by: CrystaL C. at October 25, 2008 3:55 PM
Comment #268332

Thank you, Crystal C…

Posted by: Marysdude at October 25, 2008 4:05 PM
Comment #268333

government knows best said

Get ready middle-class and hide your guns and bibles. All 3 branches will be just itching to get into your pockets but it will be for your own good.

I’m sorry, but the people with guns and bibles are not middle-class anymore. These
people are all part of the working poor. Most of them work 50 hours a week and can’t make ends meet.
This whole “redistribute the wealth” is a joke. Obama is talking about taxing very rich people like they were taxed under Reagan, and using some of that money for education and health care.

Posted by: Mike the Cynic at October 25, 2008 4:11 PM
Comment #268334

government knows best-
Good heavens man. I know having a sense of humor, but that’s simply being an jerk. Don’t hide your guns, don’t hide your bibles, don’t make yourself look silly by getting paranoid and treating a Democratic Presidency as the end of the world. Or pull mean jokes just to teach people lessons. Figure out what people will accept from a Republican candidate post-Bush, and then figure out how to talk to people outside of the party, rather than priding yourself on offending them.

Posted by: Stephen Daugherty at October 25, 2008 4:15 PM
Comment #268339

“It is confusing me to see how gullible people are. THE LARGEST SINGLE TAX ON THE POOR IS THE CORPORATE TAX. Think about it…. Put a big tax on Exxon or the other oil companies and they just raise the prices…. a tax on the poor much more than the rich because you can only use so much gas. Tax Pacific Gas and Electric and you get higher energy prices. Tax Albertson’s and you get higher food prices and on and on and on. Try the formula on any company and see what you get.”
Posted by: Chris at October 25, 2008 01:43 PM

I know we live in a democracy (very arguable), but can someone answer this for me.

So the government, Senate, House, President passes it w/e, passes a tax on say, oil companies that makes them pay 5% more tax on all the oil they sell, and they, like Chris says, just raise the price. So what’s to stop us, the people, and the Gov’t, to just stop them from raising their prices, i.e. “No you can’t raise your prices, take a hit on profits and pay the 5%”.

I really don’t understand the underlying problem, yea it’s UN-democratic to force the rich to pay more, but look at it this way, let’s say 200 of the most richest people in this country have more money on-hand than 200 Million of the people and more often than not got that money by unethical means. So what really is stopping the people we elect, or citizen activist groups, to just take that money back?

Posted by: Jon at October 25, 2008 4:53 PM
Comment #268341

And Government knows best,

Why didn’t you just give 5 bucks to the waiter and 5 bucks to the homeless guy?

Posted by: Jon at October 25, 2008 4:57 PM
Comment #268355

government knows best,
I can’t respond without saying something that will get me banned from the sight, but I think I can safely say that was one of the most mean spirited comments I’ve seen in quite a while. I think it was supposed to be funny. It was not. I like the message that Obama stresses about reaching across the aisle, working together, and focusing on our commonalities rather than our differences. However, stiffing a waiter to make a political point… That’s just ugly. Ugh. Never mind.

On a completely different topic, which has NO relation to the comment by ‘government knows best’…

Sometimes it is really striking, just how many crappy people live in America. The weird thing is, the really crappy people don’t even get it. If they find themselves getting shunned for being crappy, or getting called out for doing petty, nasty stuff, they don’t try to improve; instead, they get even louder and more strident, resorting to name calling and character smears, and attacking the person who noticed their crappiness in the first place, thus becoming, if possible, even crappier.

Just a general observation on one of the root causes for misanthropy.

Posted by: phx8 at October 25, 2008 11:29 PM
Comment #268356

phx8 — thank you,thank you,thank you — I typed up a reply that I knew would get me booted from this site and thought better of it —
- my gut says government knows best is one of those people that never tips anyway. All waiters and waitresses know them — they are the ones that piss and moan the whole meal — embarrass the people with them and steal the silverware.

Posted by: A Savage at October 25, 2008 11:59 PM
Comment #268358

You only have to look at this graph. McCain’s poll numbers have risen and decreased with the market.

Obamaphiles want to give Obama credit for this, comparing his supposed virtues with McCain’s supposed flaws, but the fact remains that Obama was BEHIND in the polls before the economic news hit.

Did Obama play his political hand better than McCain did when the news hit? Sure. But Obama’s hand was the equivalent of a Royal Flush and McCain’s was the equivalent of a single pair. It didn’t take any genius on Obama’s part to figure out how to capitalize on the situation—especially when he could be assured that the media was going to play along. In fact, if he’d have screwed up a political gift like that it would have been the biggest display of incompetence in election history.

Posted by: Loyal Oppostion at October 26, 2008 12:06 AM
Comment #268359

A Savage,
Yeah, I had to edit my comment too. Sometimes it’s not easy to maintain civility when everyone is excited and impassioned about an upcoming election. But sheesh! Every so often there are examples of people using politics to justify being garden variety jerks. Posting a comment about stiffing a waiter to make a political point… Man, it just doesn’t get much lower. We’ve all seen people like that, of course. Anyone who serves the public encounters ‘em.

I suppose waiters can take their revenge too. Maybe the waiter with the Obama tie took his revenge by spitting in the food of everyone he tagged as a McCain supporter. It would be a pretty awful world if that’s how everyone treated each other, stiffing on tips, spitting in food, and so on.

Posted by: phx8 at October 26, 2008 12:33 AM
Comment #268363

Loyal Opposition,
This was always the Democratic Party’s election to lose. The GOP has many a lot to answer for, and it would have been difficult for the GOP presidential candidate to separate from the party.

Having said that, I don’t think any Republican would have had a chance against Obama. Why? Obama is a superb organizer. His campaign is a thing of beauty. As I have said before, watch the turnout on election day. The GOP hasn’t even encountered the real power of Obama’s organization yet. Obama has raised more money than any other candidate, ever, and a lot of the money came from small donors. He is an incredibly effective orator.

So it wouldn’t have mattered who faced Obama, or what the issues turned out to be. Obama is an exceptional politician with the potential to be an exceptional president. Let’s hope he succeeds. Right now, the prospects for the future of the United States are not so good.

One last observation” I don’t think McCain could have won under almost any circumstances. If the election had turned on foreign policy, it would have gone just as badly for McCain because of Iraq, which is still highly unpopular with the public. The Palin nomination was a disaster.

File this under coulda, woulda, should… If McCain had stayed away from the Rove crowd, and not brought them on board his campaign in July, and if the campaign had stayed away from the character attacks… and instead of attempting to smear Obama, McCain had just been himself, and let his campaign reflect it, run a scrupulously clean campaign and concentrate on his stands on issues… and finally if he had nominated Lieberman, and offered a ticket of national conciliation; well, that might have done the trick.

I really think McCain was the best the GOP had to offer this go around. Unfortunately, McCain let his campaign get away from him, and not reflect what he really believes. That’s not an excuse, though. McCain has to take responsibility for his organization.

Posted by: phx8 at October 26, 2008 2:11 AM
Comment #268365

GG in here with the control….doesn’t seem fair that we’re the ones walking backwards so much, but guess in the grand scheme of things, we sleep better.

Posted by: janedoe at October 26, 2008 2:13 AM
Comment #268366

phx8….you’ve been calling this since early in the campaign. Way to go…..
Of course we know there are a few days left and we shouldn’t party yet…..also we can be assured that this coming 4 years will give them time to re-group, lay in the ammo and be ready to launch a major attack next time.

Posted by: janedoe at October 26, 2008 2:17 AM
Comment #268367

Well, when it comes to politics, I’m a liberal/progressive first, and a Democrat second. I just think it’s realistic to call this what it is has every indication of being, namely, a landslide, because that’s just recognizing where things stand.

There’s already talk among the GOP of pulling funds away from McCain, and concentrating on salvaging senate seats. I think that’s smart. On the presidential level, a win is a win. The candidate can seek an overwhelming majority for a mandate, or hope coattails bring along lower levels into office, so that has to be taken into account, but still, a win is a win. The GOP needs to get real. Instead of throwing money into a losing cause, and cutting the Obama victory to, say, 6 points instead of 8,the GOP needs to pull funding from McCain, and concentrate its resources on some very close senate races. Those senate races have the potential to make a huge difference.

Posted by: phx8 at October 26, 2008 2:38 AM
Comment #268373

LO, Like it or not the Republicans had 6 years of the House and senate under Bush, well almost 6 years of the senate if you count Daschle’s little time as majority leader in the early part of the decade, And I remember the Dot com Crash under Clinton very well, A good friend of mine who i worked with at the time his dad went to the naval academy with Jimmy Carter, we were so slow from the end of 1999 to the first part of 2001, the only thing that was keeping the place open was the rich folks and the financial folks who worked in Orange County they would come in and spend money to relieve there anxieties,I’ll tell you Clinton and Reagan were made out of Teflon.

Posted by: Rodney Brown at October 26, 2008 10:53 AM
Comment #268374

mike the cynic

“I’m sorry, but the people with guns and bibles are not middle-class anymore.”

no mike you’ll find them amongst all classes. this is where you on the left fail to get it. the way someone chooses to live thier life is not some illness to be cured. it is extremely arrogant of you to assume that only the poor and ignorant could hold these sets of values. it is also why the god and guns remark by obama was such a huge mistake.

Posted by: dbs at October 26, 2008 11:03 AM
Comment #268376


“Well, when it comes to politics, I’m a liberal/progressive first, and a Democrat second. I just think it’s realistic to call this what it is has every indication of being, namely, a landslide, because that’s just recognizing where things stand.”

don’t count your chickens before they’re hatched. IMO i think this election will be much closer than you would like to believe.

Posted by: dbs at October 26, 2008 11:10 AM
Comment #268383

Jon wrote, “So what really is stopping the people we elect, or citizen activist groups, to just take that money back?”

Jon, should we start with you and confiscate what you have? Robin Hood policies have never worked anywhere except in Sherwood Forest.

By the way Jon, price controls have been tried in the past and always lead to disaster.

In his latest book “The End of Prosperity: How Higher Taxes Will Doom the Economy…If We Let It Happen” , Arthur Laffer writes; “When the federal net debt goes from 35% of GDP to 50% in seven years and you add on these bailout packages, I don’t see how they avoid massive tax increases. And if you’re going to try to raise revenue, you’ve got to do it on broad-based taxes that hit low-income people as well…sales taxes, income taxes, payroll taxes. Those are your big revenue raisers. It’s not as though Obama is bad and McCain is good. They still don’t get pro-growth policies.

You need four things: fiscal restraint and low-rate flat taxes; sound money so the value of the dollar over long periods of time remains pretty constant; the least amount of impediments to the free flow of goods and services (and people) across national boundaries; and minimal regulations that achieve their objectives but don’t go beyond them to destroy economic activity. We’re going off track on all four.

The policy mistakes are classic. It reminds me of doctors in the Middle Ages. They’re bloddletters. When the patient gets sicker, they ask if they didn’t take enough blood.”

Posted by: Jim M at October 26, 2008 1:06 PM
Comment #268387


“So what really is stopping the people we elect, or citizen activist groups, to just take that money back?”

what are going to do jon, just march in, gun drawn, and say hand over your money ? LOL!!!

Posted by: dbs at October 26, 2008 1:47 PM
Comment #268389

Yes, Stephen, Obama is steady and smooth, just like the Titanic, which barely shuddered as it scraped up against an iceberg.

There was an excellent article in the Wall Street Journal yesterday based on an interview with Fed Ex’s Fred Smith. It pointed directly to the problem with corporate taxes that reduce the capacity of companies to invest in capital.

Smith notes that 70% of the increased productivity resulting from investment in capital is captured in wages paid to workers.

This, Stephen, is where taxes hurt everyone. You can call them an “investment” from now till Hell freezes over, but they never, ever, produce higer wages for productive workers. This is especially true of taxes that limit capital expenditures, or that favor the financial industry over industrial investment.

The problem with the tax plans of the government is that they will actively discourage capital investment. They will punish those who put resources at risk. They will demonize the most productive people in society, and they will discourage the unproductive from becoming productive.

That’s the way the markets see it.

“Happy Days are Here Again!”

Obama is going to have a heck of a time proving, to those of us who think every policy on which he stands is insane, that he has a clue in the world beyond lawyerly savois faire. If he can’t prove that the next four years are going to be a global nightmare.

Posted by: Lee Jamison at October 26, 2008 1:58 PM
Comment #268390

“Obama’s response created a positive overall sense of this temperament. Rather than make dramatic gestures, with wild hand-waving about what he was going to do, Obama kept his distance and let the people who were actually in charge of the situation take care of it. He then came out with a reasonable set of principles for a better version of the bill.”

Or, alternatively, his supporters in Congress held up the bill to make it look more like he had something to do with passing it. Remember, Jesse Jackson Jr has more experience in legislatures than BHO, 13 years, and although he’s 5 years younger, makes your guy look like the tortoise.

Posted by: ohrealy at October 26, 2008 2:00 PM
Comment #268391

“… i think this election will be much closer than you would like to believe.”

That’s why there’s a vote. Having said that, the polls suggest I’m right, and the actions of both the Obama and McCain campaigns suggest the same. If you follow polls ( is a good resource, a composite of all the polls shows Obama increasing his lead. Individual polls show a wide range, but just to give an example from pollster, today’s polls (10/26) show a 9% lead according to Gallup. Composites of polls show a 7% or 8% lead for Obama.

The thing about that is, a miss is as good as a mile with the presidency. Yeah, there’s the question of a ‘mandate’ and the issue of coattails, but there’s virtually nothing suggesting McCain will win. However, there are a lot of very close senate races and others downstream, where an injection of money and resources could make a huge difference.

The difference between a 6 point v 8 point loss for McCain is negligible. The difference between 39 GOP Senators and 41 is enormous.

Posted by: Phx8 at October 26, 2008 2:17 PM
Comment #268394

The Anchorage Daily News announced today that they are endorsing Obama.
Their decision was based on the numbers of things taking place currently, and the solution for them “would stretch the governor beyond her range”.
That has to smart a bit..

Posted by: janedoe at October 26, 2008 2:42 PM
Comment #268395

Nowhere is the yawning chasm between the modern conservative and the modern liberal more apparent than in a discussion of “rights.” The modern liberal is the proud successor to the Jacobins’ notion of abstract rights, finding new ones every day in their vain pursuit of perfectibility and Utopia. The modern conservative stands with Burke, holding that the real rights of man are rooted in custom, tradition, and faith—that reform is essential, but that wholesale change is catastrophic. Edmund Burke

The Roots of Modern Conservative Thought from Burke to Kirk
by Edwin J. Feulner, Ph.D.

Does this sound familiar? “The essential difference between Burke and the French revolutionaries was theological. Burke possessed a Christian understanding of human nature which Danton, Robespierre, and the other Jacobins rejected. To the revolutionaries, Christianity was superstition and an enemy. To Burke, it was “man’s greatest good and established order to be the fundamental of civilization.”[20] It provided the civilizing underpinning of society, regardless of the individual’s particular denomination.

In contrast, the French revolutionary leader Danton sought constant ferment and spoke of a “cauldron” in which every impurity of society would be “burnt out.” But Burke declared that the just society was not a bubbling cauldron but a spiritual corporation, formed by a covenant between man and his God.”

“The above beliefs articulated by Burke form a significant part of the intellectual foundation of modern American conservatism. Equally applicable in this century, recently released from the threat of Communism, are Burke’s stern warnings against a fanatical elite that demands conformity to its ideology. “To them [the French revolutionaries],” he wrote, “the will, the wish, the want, the liberty, the toil, the blood of individuals is nothing. Individuality is left out of their scheme of government. The state is all in all.”[26]

Burke’s ideas, Kirk writes, “did more than establish islands in the sea of radical thought; they provided the defenses [the definition] of conservatism, on a great scale, that still stand and are not liable to fall in our time.”

Alexis de Tocqueville wrote; “The same equality that permits each citizen to conceive vast hopes, renders all citizens individually weak. At each step up the ladder they find “immense obstacles that they had not at first perceived.” While it is possible to conceive of a degree of freedom that might satisfy people entirely, he says, “men will never found an equality that is enough for them.”

Tocqueville is often cited for another antidote to radical individualism—the capability of Americans to associate with one another voluntarily (akin to Burke’s “little platoons” of society) in accordance with their own will and reason, instead of relying on what Mansfield calls “a centralized, ‘schoolmaster’ government to take care of them,”[33] or what Margaret Thatcher has called “the nanny state.”

Excerpt from;

Posted by: Jim M at October 26, 2008 2:46 PM
Comment #268398

I’m pretty sure that Cisco and Microsoft, both multi-billion dollar corporations, paid zero corporate income tax last year. I have no idea how many others get by that well, but have read that corporatiions in America pay less than one fourth of the amount they should pay, if the IRS could run enough audits.

If corporations don’t pay taxes anyway, but continue to raise prices in order to cover their tax burden (the one burden they don’t have), what good would it do for mccain to slash even more the taxes they don’t pay?

Just think about it for a minute…Wal*Mart can save taxes in a Democratic Society, in order to purchase more goods from a Communist Country, so that the citizens in the Democratic Society can thank the tax-free corporations for their free-market socialist goods…did I get lost in there somewhere?

Posted by: Marysdude at October 26, 2008 3:23 PM
Comment #268399

I think a lot of the people who did get caught up in the God and Guns argument are poorer for it. But in all fairness, I think we can say that at the time the Reagan rise occured for the Republicans, there was considerable doubt that the Democrats could deliver on the economy either

I think folks taking the long view might see it as a mistake, and are seeing it as a mistake.

As far as the election goes, I guarantee it’s going to be painful for your side. It’s an open question as to how painful it’s going to be, but when you have Harris County Judges sending out flyers reminding people of why they should keep them, there’s an indication that it’s going to be bad in a way your party’s not seen for some time.

Jim M-
Your quotation is ironic. Laffer’s work is the basis for the supply side notion that you can increase revenues through tax cuts.

That has never really happened. Mostly, it’s the economy picking up that does the actual work. But Republicans keep on talking about tax cuts as a driving force in the economy.

What you folks fail to factor in are the economic problems that come as a result of increased national debt. But the doctors on the right ask, has the government been bled of enough money? You folks can say, “Democrats are going to spend more money”, but it took a Republican Congress and a Republican President to really spin this whole thing out of control. More to the point, if you looked at the Democrats, they were obviously following the lead of the Republicans on tax policy. Who wants to be vocally against tax cuts, after years of successful Club For Growth propagandizing?

One last point: pro-growth policies don’t necessarily increase real economic growth. We can always intend for lower taxes to increase economic growth, but if they increase inflation, it could swallow up the gains. The Republicans have become a mainly gimmick driven party on the economy, with general strategies meant to be good for business, but which often cause trouble for the health of the economy.

Lee Jamison-
Funny how the fifties and sixties, with their incredibly greater taxes, nevertheless constituted times of great prosperity.

The trick is, your notion of corporate taxes neglects some things. Fairness for example. Under our law, corporations have the rights of a person. That’s been the law of the land for almost a century and a half. If Corporations can own property and make lawsuits, why should they be exempt from taxes?

If you’re hung up enough about paying taxes that you refuse to go and make more money about it, well… I doubt you’re among the millions of people who have made their fortunes during times with high taxes and low taxes alike.

The biggest problem facing the financial industry right now isn’t taxes, it’s the inability to tell what they’re investments are worth. They lobbied for less oversight, less restriction, all in the name of growth, and what we got was a system that expanded on paper far beyond what it really was. A few well-placed regulations could have prevented the confusion, but sadly, a few people might not have made as much money.

I have my doubts if Obama will ever prove to people like you that he’s right, but if shows his usual caution, his usual sensible approach to policy, he’ll certainly do a lot better than the erratic John McCain. He’ll make substantive changes to help the economy, rather than try and cheerlead into a recovery.

The Democrats delivered on their promised votes the first time. The Republicans did not. John McCain was supposed to deliver those votes, and evidently thought he had before the bottom dropped out from below him.

Posted by: Stephen Daugherty at October 26, 2008 3:32 PM
Comment #268407

>John McCain was supposed to deliver those votes, and evidently thought he had before the bottom dropped out from below him.
Posted by: Stephen Daugherty at October 26, 2008 03:32 PM

I wonder…would the complexion of this campaign be different, if he’d actually been able to deliver those Republican votes?

Posted by: Marysdude at October 26, 2008 4:02 PM
Comment #268408

I guess government knows best copy n pasted that crap everywhere he could
from usa today
nobamabiden1 wrote: 3h 9m ago
Here is a creative approach to redistribution of wealth as offered by a reader of the local newspaper, the Eagle Tribune.

Today on my way to lunch I passed a homeless guy with a sign the read “Vote Obama, I need the money.” I laughed.

Once in the restaurant my server had on a “Obama 08” tie, again I laughed—just imagine the coincidence.

When the bill came I decided not to tip the server and explained to him that I was exploring the Obama redistribution of wealth concept. He stood there in disbelief while I told him that I was going to redistribute his tip to someone who I deemed more in need—the homeless guy outside. The server angrily stormed from my sight.

I went outside, gave the homeless guy $10 and told him to thank the server inside as I’ve decided he could use the money more. The homeless guy was grateful.

At the end of my rather unscientific redistribution experiment I realized the homeless guy was grateful for the money he did not earn, but the waiter was pretty angry that I gave away the money he did earn even though the actual recipient deserved money more.

I guess redistribution of wealth is an easier thing to swallow in concept than in practical application.

— Google is your friend — its on about 30 sites lol
— Savage

Posted by: A Savage at October 26, 2008 4:09 PM
Comment #268409

MD n1sinq1=n2sinq2 snells law.

Posted by: Rodney Brown at October 26, 2008 4:16 PM
Comment #268410

Jim M-
My observation of things is that the market tends to encourage the wrong thing as the right thing right up to the point that it becomes the disastrous thing. Enron was the stock to have, flipping homes was the routes to quick wealth, hedge fund operations were the hottest place to be, the oil companies were going to make money hand over fist forever, and SUVs were the vehicle to make and market.

The good of a market is how swiftly optimized strategies can spread, but still, somebody has to think for themselves first, and sometimes the market and it’s obvious trends block out the signal of wisdom with the noise of quick fixes and money-making fads.

Sometimes the market continues to do stupid or atrocious things, long after it’s become obvious that they’re wrong. Why? Because there’s a lot of irrationality in the market, and a lot of risks people start taking again, once things calm down.

I have watched one particular business, the movie business, long enough to know that sometimes common sense fails people, and sometimes its simply imagination.

The trick to good regulation, I think, is to work by emergent pattern to keep things clear, to keep the economy running smoothly, keep the market itself capable of doing its job.

That means sunlight provisions, making sure investors have the information to know the good deals from the bad. That means capital requirements. You don’t let a guy who can’t swim become a Navy Seal or pilot.

Reduce fraud, reduce overexposure, reduce practices that harm consumers and communities, because in the end, those harms feedback to undermine the economy.

The Republicans have long employed scare tactics to convince people that the costs of environmental and financial compliance would be too high. They said that about reducing particulate emissions, and sure enough, the costs were less than people thought.

Which gets me to thinking: are these people who are moving the factories overseas always right about doing that? About going after jobs first as a way to cut costs? These geniuses have often been turning around and filling their own pockets more fully.

And can we really run a consumer economy with such priorities? Are we not creating a situation where we’re throwing away our economy’s investment in training and education to get back returns that mainly benefit the top earners?

There is a hidden elitism in Republican policy, and that set of elitist policies is part of what’s making American business more inefficient at supporting our economy. There have to be better ways of dealing with these issue, and for far too long, the market’s been hyperfocused on one set of ways of doing things. It’s time for a change.

Posted by: Stephen Daugherty at October 26, 2008 4:21 PM
Comment #268417

Florida TV Station Learn New American Expectation of next 4-8 Years
Senator Joe Biden like Senator Barack Obama has learned well what to do when anyone asks a hard question. Sen. Biden initially laughed at the Florida anchor and later the Obama campaign ordered that this TV station be banned from interviewing anyone in the Obama posse. It seems now that for the next 4-8 years, anyone asking Obama and his posse any questions will be viciously attacked. Obama has already ordered all American news stations not to ask Michelle Obama any questions and all news stations complied except Fox News.

Today, Biden and Obama revealed what Americans can expect in the future. The media no longer belongs to the American people but has become the socialist or Marxist Obama news outlet. The new private Obama news outlet that belongs to Rep. Nancy Pelosi, Congressman Reid, Congressman Schemer, and the Democratic Party’s. Pray for America and the “good old days” when we had complete freedom to ask questions from any politician without fear of reprisal replaced by the new Obama news media and the Democratic Party’s media that will attack you (former known as the “middle America”) as they did with “Joe the Plummer”.

Finally, as one fellow citizen mentioned, why hasn’t Obama who is so generous with our tax monies not stop and give half of all the money that he has spent on this campaign to help anyone? Why hasn’t the new multimillionaire Obama that has had so much time since becoming a US Senator to author three books not taken more than $3,500 of his new wealth this year for charity?

Posted by: Dr Rene at October 26, 2008 7:45 PM
Comment #268420

I think the economy is a lot of it but it’s also…

…the competence: the entire Bush/Cheney administration wholeheartedly embraced the Rep/Con mantra “Government is not the solution; government is the problem.” from Rumsfeld to Wolfowitz to Brownie to Cox/Bernanke/Paulson.

Again and again and yet again these clowns have proved that if you believe government is the problem and you are the government, you can and must do your da-nedest to demonstrate the ultimate truth of that Reagan axiom.

The only careful, competent, thoughtful actions of these guys has been to shred the Constitution and enrich their political allies.

McCain/Palin, in every step of their stumbling, tottering way on the campaign trail, has demonstrated that incompetence, laissez faire and deregulation are exactly why many refer to them McMoreOfTheSame, McBush, whatever.

McCain’s selection of Palin is the perfect metaphor for the on-the-fly, shoot from the hip, roll of the dice decision-making process that has dominated the Rep/Con/Bush/Cheney policy from day one. They seem to think it’s all a game with no downside for the citizens who suffer from the consequences, intended or unintended, of their incompetence.

I can’t predict how competent Obama/Biden might be, but I can predict they will not come into office determined to prove “Government is not the solution; government is the problem.” I do know that the first requirement to succeeding at a task is to believe you can succeed. Bush/Cheney never had that and McCain/Palin never will.

…the transparency: Most people other than the 25-30% Rep/Con true believers want their government to be transparent - who’s doing what why and who’s benefiting. Bush/Cheney has been more opaque than some repressive regimes and some president-for-lifes. McCain/Palin continues this pattern on the campaign trail, down to Palin believing she was exonerated by the Troopergate investigation, which clearly stated she had abused power.

I know all the Reps/Cons on here are going to bring up Ayers. Fine. Obama has said he’s already come entirely clean about his relationship with this guy. If you know more about it than he has stated, all you have to do is provide proof of your allegations and Obama should be forced to address them. But so far no one has been able to say anything more than “He hasn’t come clean.” OK, if he hasn’t come clean, what do you have? Get it out on the table and he will address it. Otherwise STFU.

Posted by: EJN at October 26, 2008 7:52 PM
Comment #268423

Dr Rene,
Obama and Biden have submitted to interviews by the opposition, including an interview of Obama by O’Reilly. Gibson (ABC)is a Republican. So is Brokaw (debate moderator). Sometimes the interviews are somewhat antagonistic, but that’s usually not a problem for either the Democrats or Republicans. However, the Florida tv station interview was way over the top, and violated the basic ethics of journalism. The anchor should be fired. She basically accused Obama and Biden of being communists in the fashion of Karl Marx. Biden was so taken aback by the question, he laughted. He thought it was a put on. He asked again if she was serious, and she insisted she meant it.

Here is a link for the interview:

“… Why hasn’t Obama who is so generous with our tax monies not stop and give half of all the money that he has spent on this campaign to help anyone?”

Probably because that would be illegal.

And Obama has not authored three books while being a US Senator. That is factually wrong. You’re just making stuff up.

Posted by: phx8 at October 26, 2008 8:10 PM
Comment #268426
Sometimes the market continues to do stupid or atrocious things, long after it’s become obvious that they’re wrong. Why? Because there’s a lot of irrationality in the market, and a lot of risks people start taking again, once things calm down… The trick to good regulation, I think, is to work by emergent pattern to keep things clear, to keep the economy running smoothly, keep the market itself capable of doing its job.

In most cases, “irrational behavior” in the markets only becomes apparent in hindsight, and one investor’s irrational behavior is another’s brilliant vision. To what extent do government officials actually have a better grasp on such matters than investors and businesses?

For example, should or shouldn’t a bank loan a million bucks to some guy who left his job at a tech firm and wants to start a software company out of his garage? Is there irrational exuberance involved here on the part of either the bank or the borrower? Should a government official step in, stop the loan on its tracks, or is this guy getting ready to launch the next Oracle or Microsoft?

If this guy’s company does well and goes public, should it be the government or investors who decide the price of the stock? After all, if the investors guess wrong, they’re going to lose money. Look at the dot-com bubble. A lot of people made millions for guessing right, and a lot of people lost their shirts for guessing wrong.

Obviously there needs to be transparency and accountability—but “accountability” includes losing your money when you guess wrong, and there’s no evidence whatsoever that government officials have a better grasp of what will occur in the future than businesses or investors do.

Investment is ALWAYS based on speculation, and nobody who takes out a loan is “sufficiently capitalized”. Or else they wouldn’t be taking out a loan.

We can and SHOULD have done things to stop something like the mortgage crisis, but that is a perfect example of how government regulations and involvement at every step not only failed to head off the impending disaster but nurtured it along.

This notion that the economy would hum along perfectly and produce nothing but profits for everybody—with nobody ever getting hurt—supposes that we have in government people with supreme knowledge and foresight. That all we need them to do is come down off Mount Olympus and, in their infinite wisdom, set everything straight.

Life might be a lot easier for all of us if by virtue of being a government official, someone was magically granted the wisdom of Solomon. Unfortunately, however, government officials tend to not be any smarter than anybody else. They may even have agendas and motives that make them very poor arbiters indeed. And when it’s not their money at stake, they’re less motivated to get things right.

Posted by: Loyal Opposition at October 26, 2008 8:46 PM
Comment #268436

Slideshow: Sen. John McCain Play Video Video: McCain’s Latest Attack ABC News Play Video Video: Obama, McCain fight to win Western swing states AP Sen. John McCain (R-Ariz.) said Sunday on NBC’s “Meet the Press” that he can “guarantee” a win on Nov. 4 in a squeaker victory that won’t be clear until late that night.

McCain spoke amid signs of a tightening race, and reports of renewed determination among his staff, which is badly outgunned in both money and manpower.

“I guarantee you that two weeks from now, you will see this has been a very close race, and I believe that I’m going to win it,” McCain told interim “Meet” moderator Tom Brokaw. “We’re going to do well in this campaign, my friend. We’re going to win it, and it’s going to be tight, and we’re going to be up late.”

McCain was down just 5 points in the Reuters/C-SPAN/Zogby poll released Sunday, with Sen. Barack Obama (D-Ill.) leading by 49 percent to 44 percent among likely voters in the daily tracking poll, which has a margin of error of 2.9 points.

Reuters reported that Obama’s lead has dropped over the last three days after hitting a high of 12 points on Thursday. Pollster John Zogby said: “Things are trending back for McCain. His numbers are rising and Obama’s are dropping on a daily basis. There seems to be a direct correlation between this and McCain talking about the economy.”

The Washington Post reported Sunday: “[I]nside the McCain campaign the mood remains one of gritty resolve. Top aides know they are behind, but they hold out hope and, like their candidate, stubbornly refuse to give up.”

McCain told Brokaw in Waterloo, Iowa, that he feels “like Knute Rockne … go out there and get one for the Gipper.”

“We are very competitive in battleground states,” McCain said. “Obviously, I choose to trust my senses as well as polls. The enthusiasm at almost all of our [events] is at a higher level than I’ve ever seen, and I’ve been in a lot of presidential campaigns, usually as the warm-up act. … And I see intensity out there, and I see passion. So we’re very competitive.”

McCain added: “We’re going to have to just get out our vote, work hard over the next nine days, and make sure that people know that there’ll be a better future. People are very worried now — very, very worried, and have every reason to be. I think it’s all about who can assure a better future.”

On the endorsement of Sen. Barack Obama (D-Ill.) by former Secretary of State Colin Powell, McCain said: “I’m disappointed in Gen. Powell, but I’m very, very happy to know that [I’m endorsed by] five former secretaries of states who I admire enormously.”

The suspense, A horse Race Down to the wire??

Posted by: Rodney Brown at October 26, 2008 11:03 PM
Comment #268437


I wonder why you refer to the economic crisis as the mortgage crisis…since the sub-prime mortgage is such a very small part of the problem, and the real problems that created the crisis are in the rarefied air of bundling high finances and assuring without equity or collateral, or even knowing the value of the bundles.

The mortgage crisis was never a crisis to begin with…it would have swelled up, reduced and faded into the woodwork on its own. What kept that from happening is the real culprit.

Posted by: Marysdude at October 26, 2008 11:23 PM
Comment #268438

Marysdude, my interest here is in considering what conceivable regime of regulation could have headed off the crisis. If the banks and Wall Street didn’t see it coming, why do we assume (in hindsight) that government regulators would have? What are we basing this huge confidence in the wisdom and foresight of government officials on? Especially since the government officials involved were guaranteeing and backing so much bad debt.

You’re raising points about the mortgage aspect of this that I’ve already debated to death here, and I don’t feel like repeating myself so much. But it wasn’t just a matter of these sub-prime mortgages—it was backing them, insuring them, and buying them back as these “bundles” that you speak of. Financial institutions over-leveraged these assets enormously, which they share the blame for, but they did so in no small part because they were presented with a completely false picture of their value by the regulatory agencies, including quasi-government lenders.

Why this should inspire putting even MORE trust and authority into the government is beyond me.

I hasten to add that the whole nearly trillion dollar “bail out” is hardly a good example of letting the markets work either.

Posted by: Loyal Opposition at October 26, 2008 11:52 PM
Comment #268440

Hindsight is a popular defense among the incompetent. It’s perfectly easy to suggest that one’s own lack of foresight and imagination, or just plain ability to see what was coming, was attributible to the inscrutable complexities of life. Except we once had laws that prohibited and limited many of these practices.

As complex as the world is, it behaves in certain ways more regularly than others. Some folks quote chaos theory at me. I tell them that chaos theory isn’t defined by randomness, but by order and regularity acting on different levels and in different ways than the straight, easy way which lends itself to precise prediction.

You don’t have to be able to predict with scientific certainty when something becomes a problem to properly regulate it. You just have to know that eventually, as a matter of things, if you let certain things go, there will be certain consequences.

A stock brokerage selling shares in a company has certain interests. They’re looking to see whether the company’s stable financially. They might lose money for their clients if they invest them too much in a bad company. A Finance bank that depends on the equity in the company to keep that company paying back its debts on the bonds might have a problem with folks fleeing a bad company. After all, they take a hit if it turns out the people’s debts are bad.

But what if they’re the same company? The conflict of interest might have the finance part issuing more and more loans and bond issues for them, covering for the impending worthlessness, while the stockbrokering part of the company keeps on selling the Clients the stocks in order to maintain equity for all the bonds being issued.

But with bad businesses, this is inevitably a bubble that will collapse.

Again and again, we’ve seen similar cycles, and for similar reasons: the general efforts at deregulation, or failures to implement proper rules of the road, have resulted in situations where the value of an enterprise, of a property, of a share of stock has become a subject of deception, or at least deliberate obscurity.

Speculation and investment are not necessarily synonymous. According to Wikipedia, Speculation is the act of investing in a way that increases the risk in one’s portfolio. The opposite of this is hedging.

Good investing involves both, knowing where to put one’s money and when. The trouble is, folks are trying to manipulate the values and the assessments of values, and your lax regulatory system allows them to do this far too often.

There will always be predictable surprises. If you are in the habit of cutting things with the blade coming towards your thumb, eventually, you’re almost bound to put a nice cut in it. If you do certain drugs enough, you’ll likely become addicted. When isn’t necessarily predictable, but it will happen if you stick with it long enough.

That there would be a big drop in home prices was inevitable. That somebody would be caught on the short end of all those hedges and mortgage securities was also inevitable. One could appreciate in advance the problems of working out what things were worth in the absence of information on the value of an investment.

There were so many elements to this that simple, already present foresight could have taken care of. Nobody had to see the whole disaster coming either. All folks had to do was recognize the problems in its pieces.

If our overall approach had been more oriented towards maintaining information for investors, valuing things correctly, people could have operated their market wisdom, with only the usual problems and pitfalls impeding them.

Instead, we have the current mess.

The problem is, the Right coddled Wall Street, and the fantasies of some of endlessly hedged risks, and a market safe for endless speculation. Money from nothing.

We have to learn the difference between healthy investment and growth and pathological.

Posted by: Stephen Daugherty at October 27, 2008 12:04 AM
Comment #268453

A little red meat for border fence opponents…it’s the jobs stupid.

Posted by: googlumpugus at October 27, 2008 5:42 AM
Comment #268465

Stephen Daughtery writes, “Jim M- Your quotation is ironic. Laffer’s work is the basis for the supply side notion that you can increase revenues through tax cuts.

I congratulate Stephen for actually following the link I provided but am confused as he seems to believe Laffer wrote the quotes I provided. I would guess that Stephen couldn’t attack the conservative message so choose to attack Laffer, the messenger.

Posted by: Jim M at October 27, 2008 11:50 AM
Comment #268476

dear oldguy - it must be getting harder and harder for you to believe in the repub party. largest debt, largest growth in gov - things repubs hate. your party has forgotten you, and has left you with a mantra.

sen. obama brings hope. an intelligent, and caring candidate running for this office (esp. after the last 8 years) brings pure hope.

the negative ads are no longer working. and no offense old guy - but when sen. mccain starts waving that boney old finger, and ranting socialism it is now falling on deaf ears.

Posted by: bluebuss at October 27, 2008 1:59 PM
Comment #268481

The long knives are coming out for Palin. Apparently Romney’s people are behind stories about Palin being a “diva” and “off-message.” Romney wants to take over the GOP positions of power for a run in 2012.

Posted by: phx8 at October 27, 2008 2:42 PM
Comment #268494

Off Thread:

Ted Stevens has been convicted, and is now a felon…felons don’t have to give up Senate seats, and he can stay in the race.

If Alaska re-elects Stevens after his conviction, we will know why Palin is a popular governor there…they like their leaders somewhat subnormal.

Posted by: Marysdude at October 27, 2008 4:47 PM
Comment #268495

sen. obama has it right, why is it socialism when we give tax breaks for the middle class, and it’s stimulating job growth when tax breaks are given to the wealthy?

and, for the record, 760,000 jobs LOST under this bush tax plan, THIS YEAR!! tell me sen. mccain how is more of the same going to produce jobs? the rhetoric is not matching the headlines.

Posted by: bluebuss at October 27, 2008 4:47 PM
Comment #268500

dude, wasn’t Alaska kind of our own version of Australia at one time? I mean, weren’t people (law violating ones) banished there, or went on their own to escape law enforcement? So some of the residents are 3rd., 4th., or 5th. generation exiles. Perhaps it’s inherent….the evasion of or just total disregard for the law.
‘K’….taking tongue out of cheek now…….

Posted by: janedoe at October 27, 2008 7:03 PM
Comment #268503


The first bunch of Alaska immigrants was to exploit the fur trade, the second was to exploit the discovery of gold, the third was to exploit the Aluits, the forth to exploit the wilderness in the search for oil. It wasn’t until Stevens that the criminal element showed up to exploit the state…;)

Posted by: Marysdude at October 27, 2008 7:17 PM
Comment #269018

It’s odd how A Savage and Sicilian Eagle told exactly the same story in two different threads about a $10 gratuity redistributed from a waitress to a homeless person, so where is the story actually from?

Posted by: ohrealy at October 31, 2008 8:00 PM
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