Let's just say I think
George Bush has done a lot to screw with Americans. His big idea is personal ownership. For those with money this is not a problem. You need health insurance? You buy it. Want a chance at a good education? Pay for it. By making the government less responsible for taking care of people, he was eroding the public services and safety people count on. Ownership, above all, was the answer. You control your destiny.
Privatizing Social Security was a big stomping point for 2004. Own your retirement. Bush wanted to give individuals the power to create private accounts so they could manage their own funds. A move that investment houses and banks loved. More fees and profits for them. The relative security of getting your monthly Social Security check was deemed restrictive, Bush wanted you to take risks and invest it your way under the guise of empowering the people. Best case scenario: shrewd investors will make more money.
His country-wide attempt at selling it to the people failed. They knew it was a failure waiting to happen. Let's say this was something Bush got through and you had your life savings invested in Triple A rated mortgage securities, you saw it as a sound investment. As like the hedge funds, banks and international investors, your money would have vanished into thin air in a crisis like the sub-prime lending fiasco we are seeing today. The Wall Street types would have drank your milkshake. You'd be wishing for that monthly check. Although investing for some savvy retirees is fun, for most, Bush's push to get the Social Security privatized was a bad idea. Social Security is a safety blanket, not a casino. Just think about if all those baby boomers lost their shirts investing in supposed safe bundled mortgages and had no money to retire on?
Now look at another seemingly honest initiative: Bush's push for home ownership. On the surface it's a nice idea. Own your home, have a nice life. But the reality is you don't own your home, per se, you have a bank loan which after 30 years you will own the home. Any appreciation in the those years is gravy. Best case scenario: the housing market only goes up.
When the housing market is going up, no one cares that all you are doing is buying into a banking system and not "owning" your house. You're paying interest, too. So you are paying more than you borrowed. When the housing market goes down you see very quickly what you "own". Lose your job? Stop making mortgage payments? You'll lose your house. If you own your TV, you won't lose that if you lose your job because you own it. See the difference?
How was this best case scenario housing market perpetuated? Bush had a sideways stock market for years and the Fed kept interest rates low to fuel the economy. Any rise in interest rates would shock the stock market. Bush was spending more money and cutting taxes, starting wars he couldn't pay for, and issuing all the debt to Asian markets. His actions destroyed the dollar and the Fed thought just printing new money would solve the problem. The eventual side effect of this abundance of cheap cash was the housing boom. You can make money flipping homes easier than trading stocks. Towards the end, you didn't need income or collateral to get mortgages. I'm not saying Bush directly made these bad loans, but he oversaw a government who did not heed any of the warning signs. His constant "best case scenario" mentality made him unable to see what might happen if greed entered the game. He was not interested if things went bad, his home ownership agenda was one of his only public successes.
But, as with Bush's Social Security ownership model, you own the good, but more importantly, you own the bad. The best case scenario has turned into a nightmare for homeowners and investors alike.
From the NYT:
"One of the strongest warning signs came Monday, when shares of the nation’s most important mortgage companies, Fannie Mae and Freddie Mac, plummeted. After falling almost continuously over the past month, in just one day Freddie Mac tumbled another 18 percent, and Fannie Mae lost 16 percent amid concerns that the companies would need to raise billions of dollars in fresh capital.
Fannie Mae and Freddie Mac are the nation’s largest buyers of home mortgages, and traditionally the government’s backstop for the housing economy. But with Monday’s plunge, each of these giants has now lost more than 60 percent of its market value this year. The declines, along with a falling stock market and growing unease about the possibility of more red ink at big banks, reflect a growing conviction consensus among investors that the current housing slump will last longer, and prove more severe, than initially feared."
All those mortgages that Freddie and Fannie bought on the secondary market are not doing too well. What if they became insolvent?
So people lose their homes, maybe they should not have had them in the first place. But for those people who have homes who are losing value because of this mess, I feel for them. They played by the rules. It's in these tough times, when the news is bad, you need someone to tell you the straight truth. Be honest, try to manage the pain, set a path toward recovery. Is Bush that guy? He sees no insurgency, no recession, no failure, no occupation, no division, no hypocrisy.
All the ownership models and best case scenarios that Bush proposes are from the perspective of the big money guys. It's not, "how does this help people?", it's "how can we make more money for big business?" And when the big money guys screw things up, unlike the small guy who is devastated, they just get help from the government. Bear Sterns has no value? Credit crisis? Liquidity problems? Just pump $20 billion into the market. I understand that they have to help out but it seems there are not the same consequences. I'm sure the CEO has his millions in bonuses from last year. The unregulated, anti-oversight, pro-Big Business government that Bush runs doesn't really protect the little guy, just the fat cats.
Overall, I think people get it right in spite of it's leadership. The government is a big flawed, inefficient system, no matter who is running it. Bush just seems to be gifted in his ability to fuck it up better than anyone else. Your best case scenario is to get a new set of people in office on November 4th.
Add to his cardboard machismo and shitty humor, his family life. The Los Angeles Times did some solid investigative reporting and published a very damaging item yesterday on John McCain’s personal background, which is of course a key part of his campaign. We learned that McCain turned his back on his wife after she was seriously injured in a car accident, committed adultery, and left the mother of his children when he found a younger, wealthier woman. His first family is pictured here to the right. The two sons were from his wife's previous marriage. Sounds so conservative.
Via Crooks and Liars: