The Fundamentals are Sound

Obama’s use of the recession for political expediency is despicable. Recently, Obama’s advisor stated that the ‘fundamentals of the economy are sound’ (see http://www.msnbc.msn.com/id/29706224) . This stands in stark contrast to Obama’s criticism of McCain’s identical statements during the election. Obama (successfully) criticized McCain’s comments, painting McCain as out of touch. McCain was correct all along, yet lost the election because Obama sowed fear by using the struggling economy to link a correct ideology to the unpopular (and perceived ‘out-of-touch) Bush era Republican policies.

The fact of the matter is that the fundamentals of the economy are absolutely sound. The ideals and mechanisms that drive the American capitalist system and ideology are in complete working order. There are certainly issues that need to be addressed, mistakes that were made, and gaps in the system; but this does not negate the fact that the fundamentals are sound. McCain knew it; Obama knew it- he just did not state it- so he could win an election.

Unfortunately, Obama’s behaviors were malicious and detrimental to the economy. Obama continues to paint a bleak picture and pass blame. While he struggles to try and right the economy, he is only shooting himself, and America, in the foot with his negativity. His consistent criticisms of Wall Street only serve to undermine market confidence. Obama’s attempt at appealing to Main Street is divisive and unhelpful. He speaks with the populist air that wrongly puts all the blame on Wall Street and lets the foolhardy behavior of Main Street off the hook. He angers America by throwing large chunks of money in a wasteful bailout plan and then criticizes the recipients. He is repeatedly drawing lines in the sand and trying way too hard to find a scapegoat.

The fact of the matter is, is that the economic failure was caused by a myriad of factors. No one party is uniquely culpable. In fact, nearly all are at fault. Homeowners and consumers were foolish to spend far beyond their means- taking out loans to buy houses and consumer goods that could never possibly afford. A Ponzi scheme at its worst- consumers took out massive amounts of debt to buy widescreen TVs and McMansions, betting on a refinancing down the line to make interest payments. Lenders and investment bankers offered loans to people they knew could not afford to pay them back, because they would just be able to pass the risk on to someone else. Everyone messed up. The truth is that when you build up a ton of debt and do not increase the real production you are putting a lot at risk. Ultimately, it will come crashing down.

Obama’s failure to make this point is furthering fear and the downward spiral of the economy. It is frighteningly convenient that Obama is using this fear to further expand the so-called economic stimulus packages to include mounds of pork and special interest projects. America is unfortunately giving Obama far too much leeway to spend. Much of Obama’s plan fails to address the problems with the economy. Rather it serves to create a giant spending bill aimed at pushing through Democratic policies that would be far too difficult to pass without a crisis. (And as for the bailout of Wall Street and Detroit- this is just short sighted, a pure dump of tax-payers’ money right down the drain).