Benefits of Racial Doubt

The politics of race is back in the spotlight as America is poised to elect its first black President. The McCain/Palin supporters are being reminded of this on a daily basis as they are wooed on the pretense that they are more "pro-America" than Obama/Biden supporters, that Barack Obama's middle name, Hussein, has muslim/terrorist implications certainly heightened by his connection to Bill Ayers, former '60s radical protest bomber now conveniently recast as a domestic terrorist, and by their own rejection of Obama, simply because he is a black man.

General Colin Powell said it best this weekend when he crossed his party-line to endorse Senator Obama for President stating eloquently that the Republican party was narrowing in its scope, in that it was now tending to be more exclusive than inclusive. And, if in fact Obama was a muslim which he is not, what is so wrong with being American and muslim? Why should/would this be a limiting factor in the land of the free and the home of the brave?

Unfortunately for Obama, in a vast swath of the country, old prejudices die hard; ignorance and provincialism has rendered a large portion of the conservative, fundamentalist Christian population, unrepentingly racist. Gov. Sarah Palin has been out preaching to the choir, allowing them to draw the very conclusions that they are expected to draw to great affect. Sen. John McCain, having been subject to a racial mudslinging by George Bush and Co. during the 2000 Republican primaries, must be turning in his sleep as he struggles to rectify his campaign's cognitive dissonance; dependence on these "rural folk" for votes causing him to implicitly condone their racial outlook by omission of strong condemnation.

Democratic Sen. John Murtha stated a few days ago that his home base of western Pennsylvania is racist, basically a bunch of rednecks and he has implored them to look beyond race and listen to what Obama is saying. This has been the battle cry of many Obama supporters, including union leaders and the like in these traditionally working class (white) areas.

Disaffection with the Republican party together with the economic decline, housing bubble and Wall Street collapse has inadvertently propelled many rural Americans to rethink their racist underpinnings simply because the democratic nominee for President is telling them what they want to hear and just so happens to be a black man. What a turnaround! Black Americans aren't used to getting the benefit of the doubt.

Obama Tax Plan: Rates Similar to Clinton, less than Reagan.

Senator Obama is getting hammered on his tax plan and I have read it. Why doesn't Senator Obama dispel the current talking points sweeping the news media and clarify his plan? He must definitively state that his tax plan returns to tax levels similar to what we had during Clinton when the country experienced a great degree of growth. In addition he should reiterate that President Reagan had higher tax rates in key areas such as capital gains and everyone loved Reagan.

Overall, Obama is essentially repealing the tax cuts of the last 8 years. Those with the funds did make money, all you have to do is compare the Fortune 500 data for these last 8 years. Is it not fair to attempt to level the playing field by giving the middle class the tax cuts this time around?

Also, Obama should point out some of the following facts as well, lest people believe he really is about to set up a socialist state. It is ironic that John McCain is stirring up socialist distrust in Obama's tax plan while President Bush and his Republican appointees are busy ploughing tax dollars into and claiming an ownership stake in private financial enterprises across the globe. This is way more expensive socialism than what Obama is proposing.

(Note: The following list is by no means comprehensive or else I would be here all day):

1. The tax plan does not give tax credits back to those who do not pay taxes but in fact eliminates taxes for seniors earning less than $50,000 - it is not welfare for the lazy paid by the hard-working.

2. The tax plan does not tax people grossing $250,000, it is the tax on the adjusted gross income meaning you have to earn much more than $250,o00 in order to pay taxes on $250,000 after all of your deductions and credits

3. Maybe he should stop mentioning the $250,000 level unless he is going to clarify #2 above. Grossing $250,000 is barely enough to live comfortably on the East Coast in NY. We live on Long Island; we know this is far from any feeling of wealth whatsoever. This is why scale of top 10% of wage-earners should be geographically adjusted. Yes, $250,000 in Appalachia is a lot of money.

4. Most of all, explain the tax credits that he is giving such as aid to families with children in college, mortgage tax relief, and low income tax relief and that he is not giving tax breaks to those who do not pay taxes. If he is, he will have to cut this part out!

For those of you who have read Obama's tax plan, it appears rational and fair in theory. For those of you who hear it second-hand through your biased media venue, it sounds a whole lot more suspicious than it really is.

Frozen Credit Markets: What They Are Not Telling Us…

…And why they are not telling us. Those three toxic words driving the financial crisis and the credit freeze: credit default swaps (CDS). They cannot tell us because it is too big to comprehend and too hard to explain. CDS contracts are essentially bets on the bets on the bets that the underlying financial instruments, mainly mortgages, would continue to be profitable. The bets on the bets on the bets are a whole lot bigger number than the underlying mortgages themselves. MIT caliber mathematicians came up with those statistical models; risk moves towards zero when divided into infinitesimal slices shared by a greater mass of investors. Of course this is only good when underlying values increase; nobody calculated the downside. Whoops! First we have to understand credit default swaps...

From wikipedia:

“In layman’s terms the CDS is essentially an unregulated insurance policy. It guarantees the performance of a security instrument, e.g., a mortgage. The buyer of the CDS pays the maker a fee or “premium” (think insurance) for protection against a loss. Historically the US Treasury has not classified derivatives as “insurance,” and therefore they trade free of any government regulations. Because of that, the firm selling the CDS is not required to set aside any reserves from the premiums received to insure against possible future loss claims. This obviously makes the sale of the Credit Default Swaps extremely profitable and default loss payments very expensive.”

“Credit default swaps are the most widely traded credit derivative product. By the end of 2007 there was an estimated $45 trillion to $62.2 trillion worth of credit default swap contracts outstanding worldwide.

Today, AIG asked for even more money; we the taxpayers have already loaned them $85,000,000,000 then another $38,500.000.000 and now they want another $12,000,000,000. If you insert AIG in where it says "the firm" in the above quote then you will understand AIG’s problem. They sold a lot of CDS and all of those mortgage losses mean potentially trillions in loss claims; that’s a heck of a lot of payouts. Insurance is good when everyone pays premiums but only a few collect; there are simply too many people collecting due to these defaults. All of those failing mortgages mean billions, even trillions, in insured defaults.

Adam Davidson of NPR stated that “The pure size of the CDS business is enough to make a failure of AIG a threat to the entire global economy…The fear is…if AIG collapsed, banks would stop lending money to each other. The Treasury Secretary and the Federal Reserve Chairman, Paulson and Bernanke respectively, know this and that is why they keep pumping the money into the credit markets. Over $2,000,000,000,000 has been committed by the Treasury and the Fed so far but the banks are not budging, they are still not lending money to each other; the credit freeze is not thawing. With trillions of CDS sold, no one knows how deep it goes. All of this money may just be a drop in the bucket.

The next President is going to have to understand this because this economic chasm is like quicksand. It is going to swallow up a whole lot of dough. NPR tried to explain it and 60 Minutes tried to explain it but it is too monumental an amount to comprehend and maybe it is better if we don’t know and just hope that some institutions become greedy enough to start lending again. This is essentially what we are left with to solve this crisis, hope. Huge risks yield huge rewards, the American taxpayer has already taken on that premise. If we can convince more institutions to put equity into this new game then fear diminishes and lending begins. Thus, the big outlay on the part of banks around the world. But then again, maybe we shouldn’t be running on so much debt after all. What point expansion if the debt overcomes the gains in the end?

Joe Who? McCain flashes New Gimmick, Obama Wins

Oh no, not another gimmick! Halfway through this debate, I was ready to call John McCain the winner but alas it was not too be. Somehow, he got side-tracked by his new gimmick of the day, "Joe the Plumber," the guy who said Obama scared him because if he bought the business that he has been working for all of these years, he would make over $250,000 a year which qualifies him for tax increases under Obama's plan and he felt he should be able to keep more of the money he will earn. Heck, Republicans think this and they keep the taxes low for those who make the most as usual. Obama proposes more tax cuts for the middle class instead, noble yes, doable? probably not.

Nevertheless, McCain did not seal the deal in the 2nd half, leaving Obama to make his declarations with relative calm and ease. Even the Fox News people are waxing philosophical on how Obama was unflappable, how he detailed his plans, how he spoke directly to the American people, how he said the middle class deserved a tax break, how he diffused the criticism of Bill Ayers, how McCain failed to trump him on the abortion issue...and so on.

I am not sure I expected much from this debate other than to hear more about the new economic plans that were unveiled this week. They were barely mentioned and definitely not answered; well, broadly I suppose but not specifically. McCain once again takes the cake for his sweeping "I know how to fix it" non-specific solutions to America's ailments which caused him to fail the 2nd half of the debate; Obama continued with specifics throughout and out-explained McCain on McCain's own policies. Oh Well.

If I go back to my response regarding debate #2 on Tuesday, October 7, 2008, 2nd Presidential Debate Leans Obama, I can basically write the same review so why re-invent the wheel. Obama won for the same reasons he won last time. Another thought is that McCain still thinks he can win with the same nastiness and shallow assessment that George Bush unleased on him in 2000. Well, George Bush used it again in 2004. It took a dose of economic reality for Americans to wake up to the truth of deceptive politics. They don't like it right now, so much. Of course, this does not mean that they can't be deceived again. It will all come around, again.

Presidential Debate #3: Truth or Smear?

Tomorrow, the 3rd and final Presidential Debate will take place at Hofstra University, one of Long Island's premier institutions of higher learning. Once again Americans will have high hopes of hearing a meaningful discussion about the issues. After all, both Obama and McCain have introduced brand new addenda to their economic plans this week and we want to hear about them. Also, the debate has been painted as McCain's last attempt to shine given that recent polls show an increase in Obama's lead.

McCain, fresh off his pandering-to-the-base tour, has offered up yet more gems of economic inconsistency touting benefits that still tilt toward reducing the tax burden of our wealthier denizens. He has also hinted that he will bring up Obama's connections to Bill Ayers. Does he not realize that Obama's lead has increased exponentially since those attacks began? Well, Obama did say that he was surprised that McCain did not bring up those negativisms to his face during the last debate and now, McCain the man seems compelled to respond. This is the conclusion we all would make, I suppose, if we were coming off the same tour as McCain; egged on by his narrow-minded rabid fans.

McCain seems to have forgotten that he has plenty of guilt by association skeletons in his closet too so he may want to leave that stuff on the redneck trail where it belongs. Moreover, he had better be mindful that he will be in a blue state tomorrow with actual thinking people who will not respond to anti-intellectual cheap shots, or will they?

Obama also has plenty of explaining to do because I swear the man is on democratic liberal crack unveiling reams of spending plans to help everybody. I don't know how he expects the taxpayers to pony-up that kind of dough now that we have guaranteed all the bank deposits in the world. After all, that $500,000,000,000 deficit that has already been projected for the 2009 U.S. budget is definitely double by now.

Irrational exuberance has now taken over the U.S. government; the national debt clock in Times Square has run out of digits but somehow we have unlimited funds to guarantee the world financial markets and give tax breaks to poor Tom, healthcare-less Dick and jobless Harry. All hands are out and less money is supposed to come in? I hope these candidates find some financial rectitude and tell it like it is tomorrow.

World Bails Out World

Apparently, the Dow rose 936 points today, the single highest gain in 75 years, because more than a dozen European countries pledged billions of dollars to prop up their banks and ailing companies and because the Japanese lent $9,000,000,000 to Morgan Stanley. Yet, when the U.S. Congress pledged $700,000,000,000 to do the same thing for America, the Dow fell nearly 800 points.

I guess investors are more confident now because taxpayers the world over are taking on an unprecedented amount of debt; all governments are bailing out their banks. It wasn't enough for America to do it, the whole world has to do it. All governments must over-leverage themselves to bail out all of their banks and corporations that are over-leveraged, because all of our economies are doomed if the credit markets remain frozen. Edward Yardeni, the investment strategist, stated in the New York Times today that all of these bailouts will essentially “provide unlimited liquidity to the world’s banking system."

Is it really better to shift responsibility for all of that debt from private banks and corporations to the public trust? Is anyone going to stop and assess whether any real change in the fundamentals will occur. Are company profits going to suddenly improve so those who still have jobs can stop worrying about being laid off? Are new jobs going to be created for those who need them? Is the magic fairy going to wipe out everyone's credit card debts? No, no and no. Unfortunately, all the taxpayer will get for their largesse is a big, fat, whopping bill.

Republican or Democrat: Which Side God?

I grew up in a Christian family that is pretty devout; not just showing up at Church on Sundays but attending weekly bible study and religious events. I, on the other hand, never internalized this part of my upbringing and to this day my family spends countless hours trying to convert me once and for all to the fold. So far I have remained unmoved until this week when the urge to pray has overtaken me as I witness the current political, social, and economic climate in the United States.

Christian conservative values are most aligned with and championed by the Republican party yet Republicans have by far engaged in the most immoral behavior over the last 8 years; there is not one single aspect of this Republican government that has not been cited for deceptive and/or criminal behavior. Yet, the Republicans continue to hold the monopoly on religious allegiance even while construing falsehoods and stirring the pot of prejudice and ignorance.

Gov. Sarah Palin of Alaska has been out spewing the most vitriolic attacks on Sen. Barack Obama this week with little concern that the Alaska legislature was due to report today on whether she abused her power as Governor. What brazen gall? Unfortunately, they found her "slap on the wrist" guilty so it will be a wash; her evangelist base has already forgiven her every transgression thus far. Why does belief in God give you a free pass to despicable behavior?

With the backing of conservatives and evangelists everywhere, the McCain-Palin ticket has been encouraged to win at any cost; resorting to the politics of fear as the only strategy left at their disposal. It does not seem like the most Christian-like behavior especially when juxtaposed with the Obama campaign's message of hope. What does this say about America and its democracy? After all of this nastiness, the polls still indicate a fairly close race and this is why I am praying. Dear Lord, please be on the side of Obama. Amen.