Sunday, November 2, 2008

It's All About Your Money?

On Sunday, 26 October 2008, the Star Tribune (Minneapolis, MN) published in its "The Wall Street Journal Sunday" section an article by Shelly Banjo entitled "Obama vs. McCain: It's All About Your Money". I do not doubt that this article by Ms. Banjo sets forth a reasonably equitable presentation of the candidates' positions on
  • Short-term Economic Relief,
  • Income Taxes,
  • Estate Taxes and AMT,
  • Health Care,
  • Investments, and
  • Retirement and Social Security.
What troubles me is what the article does not say!
Remember, although the Democrat party has, throughout this election cycle, sought to hammer home the concept that this economy belongs to George W. Bush, the real downturn in the economy has occurred in the last two years. These are the two years during which the Democrat party has controlled both the House of Representatives and the Senate.
But the issue of our economy goes much deeper than this. The devastating blow to the U.S. economy was delivered by the collapse related to sub-prime mortgage market. This is a market that was conceived, originated, and advocated by the Democrat party and managed by Democrat party appointees to Fannie Mae and Freddy Mac. It was also almost exclusively party-line votes that thwarted attempts by John McCain and President George W. Bush to apply new controls and investigate the risks associated with the growth of the sub-prime mortgage market.
Today's economy is a product of Democrat party politics and does not belong to George W. Bush!
Want proof of this assertion? Ask yourself why the Democrats are not clamoring for hearings on Capitol Hill to investigate the causes of the greatest collapse in the U.S. economy since The Great Depression. More importantly, ask yourself why you are not writing to your Congressmen and Senators pressing for an investigation of these matters.
However, I digress. Return with me to "The Wall Street Journal Sunday" article.
What is missing from this analysis are questions like these:
  • Just how much good will Obama's planned short-term economic relief do if Democrat fiscal policies and controls more broadly applied continue to discourage capital formation and job creation?

  • Just how much good will Obama's income tax cuts for the "middle class" do if broader Democrat fiscal polices lead to increasing layoffs and driving more U.S. companies to seek lower-cost off-shore production capabilities?

  • Just how much good will Obama's health care initiatives do for those who have been laid off from their jobs due to Democrat fiscal policies that disincent job creation while simultaneously leading to other economic declines in the U.S.?

  • Just how much good will Obama's fight to keep Social Security in the hands of the federal government -- rather than allowing investors the choice to privatize their retirement funds -- if the Democrat party remains utterly unwilling to address core issues in Social Security that will inevitably lead to its demise?
All the apparently "good" things proposed by Obama's economic proposals are dependent on other economic factors remaining the same. However, we have many years of history to demonstrate that Obama's declared approaches to the economy (in general) lead to negative -- not positive -- outcomes for everyone.
Obama may not believe in "trickle-down economics", but I can assure you that if business investment risk is not rewarded via appropriate market-based returns, we will all see the effect of "trickle-down poverty" resulting from massive unemployment and more and more corporations moving their operations to nations that offer a more favorable tax and investment environment.
-- Richard

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