Feeds:
Posts
Comments

Archive for the ‘President Obama’ Category

The populist outrage over the banks has reached a fevered pitch in recent weeks. While I understand the outrage over bonuses and executive compensation, the banks are not the real problem. The President and Democrats have continually decried the lack of government regulation, but in reality, it is the government itself that is the problem.

Forget about blame, forget about party affiliation, forget about denials to the contrary, the government is the source of the disease that we find ourselves afflicted with. Allow me to explain.

Fannie Mae is a strange compilation of government and corporate elements that purchases and guarantees home mortgages. This process has been going on for a long time. The reason that this presents a problem is that the markets view these GSEs (Government Sponsored Enterprise) as implicitly guaranteed by the United States Government. While they are publicly traded companies, they were created by the government and supervised by a board that includes 5 members appointed by the President of the United States. In addition, at their creation the government allowed itself to purchase securities to a certain limit as a guarantee against default. All these are reasons why the markets trust these companies.

Over time, the executives of Fannie have accumulated mortgage positions that have caused the debt to asset ratios of the company to balloon to ridiculous levels. The banks continued to write mortgages to high-risk mortgagees because they knew that Fannie and Freddie would buy them on the secondary market, thereby reducing the risk for the bank. If the bank does not have to assume the risk, of course they will continue the profitable practice. This government induced mortgage frenzy is responsible for the glut of debt from which our country is desperately trying to keep from drowning. Without reform of these government companies, our market will continue in the death spiral started decades ago.

Read Full Post »

Yesterday, President Obama spoke to Senate Democrats about their questions and concerns. During the one interesting exchange with Arkansas Senator Blanche Lincoln, President Obama offered a summary of his response to her question. Here is that summary;

So the point I’m making — and Blanche is exactly right — we’ve got to be non-ideological about our approach to these things. We’ve got to make sure that our party understands that, like it or not, we have to have a financial system that is healthy and functioning, so we can’t be demonizing every bank out there. We’ve got to be the party of business, small business and large business, because they produce jobs. We’ve got to be in favor of competition and exports and trade. We don’t want to be looking backwards. We can’t just go back to the New Deal and try to grab all the same policies of the 1930s and think somehow they’d work in the 21st century.

I just have a few points on this loaded paragraph. First, what is the deal with “like it or not”? Who would not like a healthy and functioning financial system? Who is the President assuming would not like it?

Second, if we can’t be demonizing every bank out there, why is the President demonizing every bank out there? The bank tax he has proposed, and the populist anger of the State of the Union address belie the fact that he is doing the opposite of what he is suggesting.

Third, the sentence, “So the point I’m making — and Blanche is exactly right — we’ve got to be non-ideological about our approach to these things. We’ve got to make sure that our party understands that, like it or not, we have to have a financial system that is healthy and functioning, so we can’t be demonizing every bank out there. We’ve got to be the party of business, small business and large business, because they produce jobs. We’ve got to be in favor of competition and exports and trade. We don’t want to be looking backwards. We can’t just go back to the New Deal and try to grab all the same policies of the 1930s and think somehow they’d work in the 21st century” is not what worries me, because we have survived 80 years in spite of the “Bad Deal”. I am scared, however, of what the 21st century plans are, and how exponentially they will grow our ballooning debt.

I could go on, but as you can see from this brief excerpt, our President is looking every bit the radical that we thought he was two years ago.

Read Full Post »

Glen Beck thinks so. The President does give the impression that he is speaking down to his audience. During the State of the Union Address, the constant thought that came to mind was that this speech was a college lecture, and we had a lot to learn. When he spoke to the Republicans on their weekend retreat, once again, the lecturer in him came out. Now that he is the President, the skillful, charismatic campaigner has given way to the know-all professor.

Read Full Post »

Below are some links that I have found interesting in the past week. Enjoy yourself as you catch up with the news of the week.

A Fiscal Catastrophe in the Making

It may be surprising to some, due to the hype over the 4th Qtr. GDP numbers, but there is an increasing amount of contrary indicators on the economic condition of the USA.

Obama and the CPUSA

If you were surprised by the President’s leftward orientation in the State of the Union Address, then you will probably be surprised by the similarities highlighted in this article between the President and an infamous political party.

The Obama Contradiction

While I don’t always find myself agreeing with Peggy Noonan, I can appreciate this column for highlighting an area of concern in the President’s State of the Union Address.

Why Elitists Fail

Isn’t it obvious?

This article is worth it for the following quote alone, “The Liberal cannot strike wholeheartedly at the communist for fear of wounding himself in the process,”

The Wrong Financial Reforms

Where are Freddy Mac and Fannie Mae in all of this? Rank populism aside, there is also sufficient cronyism to make one ill.

Read Full Post »

I am posting several responses to the President’s speech on Wednesday night. Today I want to address the section on the Citizens United case. I won’t actually comment on the substance of the statement, but I do want to offer commentary on both Justice Alito’s and the President’s comments. For insight into the accuracy of the claims please read here and here.

I have no problem with the President asserting that he does not agree with a Supreme Court decision. I even believe that he could do so during the State of the Union Address, but the manner and tone of this President’s remarks were out-of-line. He was antagonistic and derisive in attacking a branch of the government. Instead of demagoguery the President should have offered ideas. He could suggest that Congress draft legislation to address the issue, but to call the credibility of the Court into question as he did is unconscionable.

Justice Alito found himself in a difficult situation. Decorum demands that Justices refrain from public comment and political involvement. He should have kept silent, but in a way I am glad he did not. If he had remained silent, this likely would only have raised a minimum of discussion on a fact check report. However, now the internet is ablaze with commentary on this quote.

In the end, he should never have been put in this position in the first place.

Read Full Post »

Common sense governance has been completely eradicated from Washington. When healthcare reform stalls, Democratic leaders throw pork at amiable senators to entice their vote. When the unions are upset that they will have tax increases as well as corporations on insurance benefits, they appeal and only the corporations are left to pay taxes in the plan. Now, President Obama needs votes for the 2010 elections, which means he needs one thing–jobs. In order to induce job growth, the President is suggesting that companies get $5,000 per employee hired. Not just for hiring employees, but doing so this year–an election year. Of course, funding for these jobs goes away next year, so who’s to say companies won’t layoff workers in January? In our current economy and political environment, Congress applies taxes and tax breaks selectively to buy votes, and that is a bribe!

Read Full Post »

In my first post I outlined three “pillars” of conservatism – rights, respect, and responsibility. I will be posting several articles giving greater consideration to these “pillars” over the next few weeks. In regard to respect, Conservatism supports a high view of the individual, whereas liberalism divides people by groups and classes, which are set against each other. Liberals cannot escape these personal categories. In contrast, Conservatives define themselves by ideas and actions. For example, whenever liberals speak of the current President, they cannot help but notice his race. How else can you explain the gaffes by Chris Matthews, Joe Biden, and Harry Reid – all three highly accomplished public speakers. I think that Freud would have something to say about this.  

Read Full Post »

Older Posts »