As an American citizen, I feel an obligation to participate in the political process that ultimately governs this, the greatest nation on God’s green earth. I try to do this in several ways; first by informing myself on the issues, then voting according to this information and my values, and also by voicing my opinions and analysis in posts like this one. It is in this spirit I post this analysis, with the hope of influencing some.
As the 2012 election approaches, I read with interest the Wall Street Journal article Democrats Ponder Next Step (June 4, 2011), in which Obama advisor David Axelrod states “I’ve always said the same thing, which is we may not have created this mess, but we’re responsible now. And people are less interested in how we got here than where we’re going”.
I don’t fit into that category of people. I am very interested in how we got here; how else am I to understand the problems we face, let alone determine the wisdom (or lack thereof) of the proposals put forth for my future, and the future of the nation that will be left to my grandchildren and their families . This statement by Mr. Axelrod reflects an attitude I find repulsive; an elitist attitude that suggests that the common man must blindly trust their government leaders. So now let me unpack that statement.
“…we may not have created this mess…”. Yes Mr. Axelrod, you had a great deal to do with creating this mess. No, not you personally, but the liberal world view and the political machine and party which you represent. You conveniently try to pin the blame on the previous administration, but in fact Mr. Bush, who you dearly love to hate, had little to do with the “mess”.
“how we got here”
When this mess started to unfold in 2008, I attempted to find out “how we got here”, and here are some of what I discovered for this “mess” (see also my previous blog post on the subject):
- The Community Reinvestment Act (CRA) A liberal plan to dramatically expand home ownership, providing loans even to those who could not repay. CRA has been identified by many as the root cause of our current economic problems.
- The financial rating agencies: Standard & Poor’s, Moody’s, Fitch. These pseudo governmental rating agencies dropped the ball in highly rating such things as “Mortgage Backed Securities” which were at the heart of the financial collapse of 2008.
- Fannie Mae and Freddie Mac Read the reviews of the book Reckless Endangerment, or better yet, read the book itself.
- Bush Attempt to Rein In Fannie and Freddy Opposed by Congressional Democrats (2003) President Bush apparently recognized the problems with Freddy and Fannie, but was blocked in his efforts to reign them in by a Democratically controlled Congress.
- The Basel Accord
- Ignorance. Even the “evil” bankers were not fully aware of the precipice we faced, see the section in Special Issue on the Financial Crisis for an analysis of this aspect of the crisis.
- The 2008 crisis was not the worst since the Great Depression. This is a red herring that is constantly trotted out. I don’t believe it! I remember the Carter years of double digit unemployment, double digit interest rates and double digit inflation.
- Critical Review: Special Issue on the Financial Crisis
Wall Street Journal: Fixing the Global Financial System:
- Thomas Sowell: Upside Down economics (Sowell’s Archives)
- The new book Reckless Endangerment
“where we’re going” under the current administration
- Hyper acceleration of the national debt.
Our 2007 deficit under Bush was $161 billion or 1.2% of GDP. This year’s budget hole under Obama is around $1.5 trillion, equaling 9.8% of GDPNational debt of this magnitude is immoral and dangerous. Dangerous on two fronts; Strategic in that foreign entities (China?) will have increasing influence on our strategic foreign policy decisions, and Budgetary in that we will be increasingly unable to fund necessary domestic programs.
- Sustained high unemployment.
- Continuous attacks on American business. The latest being the NLRB attack on the South Carolina Boeing 787 plant, having the potential of driving airliner business out of the U.S., and into the hands of Aero Bus. How will this help the workers in the state of Washington?
- Tax increases. A continuing Democratic government will result in continuing higher taxes, and a continuing decline in American competiveness.
- Presidential attacks on Israel. In the book of Genesis, God says concerning Israel “… I will bless those that bless you, and curse those who curse you …”. President Obama has a decided anti-Israel bent, and it is certainly possible that such a curse would include an economic factor.