Archive for the ‘u.s. economy’ Category

Obama’s stimulus: a really good thing?

July 7, 2009

By David Farside
Website: www.thefarsidechronicles.com

The election of President Barack Obama has not only created a generational gap between young and old voters, it has widened the political divide between the Republican moderates and conservatives.

Obama won last year’s election on the optimism of America’s youth for America’s future. Almost 55 percent of Americans between the ages of 18 and 29 voted. Many of them were first time voters and for every one vote they cast for presidential candidate John McCain, they gave Obama two, solidifying the victory for the Democrats.

The Republicans lost the election because of their ancient fear tactics, lies, deception, extreme right-wing conservatism and, some would say, the near destruction of America. Despite all of that, some die-hard conservatives are still crying over the historic victory of the Democrats.

Last week I was having coffee with a few friends at my favorite coffee shop. It is also a bastion for leading state Republicans and all the “usual suspects” were present and accounted for. Their political egos were congregated around a reserved round table at the righthand section of the shop.

One of my friends is a staunch Republican, the other is a Democrat and I’m sort of an Independent. But, we always have some great conversations and last week was no exception.

The round table discussion on the other side of the room broke up and one of the Republican “usual suspects” joined us at our little booth in the center of the shop. The conversation quickly became political. I felt like a rose between two thorns – conservative Republicans on either side of me, both complaining about Obama and a Democrat watching the show.

The two Republicans quickly took over the conversation with their complaints of Obama. They griped about the stimulus package, bank bailouts, corporation takeovers by government and the Democrats’ majority in Congress. They criticized the Democrats for wanting to repeal the 22nd Amendment, which limits U.S. presidents to only two terms in office. They forget that when George W. Bush won his second term and Congress was dominated by Republicans, there were some GOP legislators who wanted to propose the same legislation.

They were really critical of Obama’s town hall meeting on health care, claiming the audience was stacked with party workers and employees of the Democratic party. Reminds me of when Bush held his little press conferences on Navy ships and army bases, holding the military audience captive on taxpayers money while they had to listen to his mental gibberish.

Obama promised changes and, whether we like them or not, he is keeping his word. The automotive industry had to be temporarily controlled by the government. For years, the oil companies and auto manufacturers played good cop-bad cop. Gas-guzzlers were built purposely to increase oil consumption. Obama broke that conduit between greed and power. New technology and design will make automobiles more efficient and more affordable in the end and may contribute to less dependence on Arab oil. And that’s a good thing.

The taxpayer bailout for Wall Street, investment banks, mortgage companies and AIG’s loan of $1.5 billion was a short-term necessity. In doing so, the government is establishing new laws, controls, guidelines, regulations and accountability for the way these corporate giants do business; preventing this type of modern day crash from happening again. And that’s a good thing too.

The assinine pied piper for the Republican conservatives, Rush Limbaugh, says he hopes Obama will fail. He claims Obama is destroying capitalism because of government owned stock in private business and over regulation. What he doesn’t say is that part of the economic problems we have today started with former President Ronald Reagan and his trickle-down economics, including deregulation of private enterprise such as banks and mortgage companies. If Obama fails, we all fail.

One of Reagan’s four major goals was “to reduce government regulation of the economy.” That’s what he and Congress did, and it took 25 years for the trickle-down bubble to break.

Without regulation, and over time, large investment banks were influencing the stock market by selling stocks short, manipulating puts and calls (options) and making risky investments in unregulated hedge funds.

Mortgage lenders created a sub prime lending instrument, otherwise unqualified borrowers could buy a home without adequate proof of yearly income. All they had to do was pay a higher interest rate on the loan by signing a “statement of income,” meaning actual income would never be verified by previous income tax returns. Unfortunately, most lenders inflated the numbers to achieve the American dream of home ownership. Obama will change that with new regulations and that is a good thing.

According to a U.S. News article published in November, the Center for Strategic and Budgetary Assessments estimated the wars in Iraq and Afghanistan could cost the taxpayer as much as $2.5 trillion, including interest, by the year 2018.

A Stanford University School of Business newsletter noted that Obama could have received more than the $7.87 billion stimulus package if he would have taken more time negotiating with the Republicans. Even so, the cost to revitalize our domestic problems is far less than the cost of starting a senseless war with the Muslims.

Unlike my two pessimistic Republican friends, I am the eternal optimist. I believe that in the future we will develop new sources of energy. New regulations will be the stimulus for more opportunities, investments and new wealth. The government loans will be paid back with interest. And, unlike the trillions of dollars wasted in Iraq, the stimulus package may end up not costing the taxpayers anything. And that would be a really good thing.