Let us just suppose, hypothetically speaking of course, that the Paulson Plan works as intended and shores up the credit market enough that as President Bush put it last night, people can get an auto loan.  Is the problem fixed?  Is the disaster averted?  No, it is simply postponed.  The fact is that our entire economy is a house built on sand.  Some have been warning for years the impending crisis being created by living above our means by credit.  This applies to both the individual citizen and the federal government.  It was a stupid assumption that house prices would just continue to rise ad infinitum. As some have pointed out the whole thing was fake prosperity creating a fakeconomic system that has now come to its inevitable end. The sad fact is that the people President Bush is talking about who will, after the great rescue, be able to get that auto loan should probably not be buying the car in the first place BECAUSE THEY CANNOT AFFORD THE DEBT THEY ALREADY HOLD. 

The consequences will be terrible, but even with the bailout, I fear unavoidable. The country can be saved, but not by more credit. This proposal amounts to giving a big score to a junkie. Eventually the junkie will be back. No, we must tighten our belts, work hard, and pay off the debt. To those who say this will not end up costing the taxpayers and might even turn a profit for the goverment I ask how do we know? Because Paulson (former chief exec at Goldman Sachs) says so? How do we even know what these securities are worth with the mark to market valuation system? I have not heard a single one of the money talkers give a sufficient explanation to that basic question. Before we do anything, we should unravel the mess and look at exactly what is behind these securities of questionable value. Not to mention, I think we are far from seeing the bottom of the market in housing and many more foreclosures will follow regardless of what Washington does. 

I have not heard much talk about what this deal is going to do to the national debt, but I doubt it will be good. My wife and I own our home. We bought and sold property during the boom years in the housing market. We didn’t purchase using an adjustable rate mortgage. We put everything we had into our first house. We didn’t refinance pulling massive equity out of the property. We make our payments. In other words, we made responsible decisions. Now we are told we have to pay the price for the irresponsibility of others? And that is exactly what this bailout means. When they say government backed it really means taxpayer backed. 

I personally know folks who have lost their homes because they bought more than they could really afford. I personally know folks who lost their homes because they refinanced with adjustable rate mortgages to draw equity out of the property to finance a lavish lifestyle. What is worse is that they knew exactly what they were doing. They were taking a gamble that the market would continue to climb and they would be able to refinance to a fixed rate conventional mortgage in a few years before their rates reset. Well, sometimes when you gamble, you loose, but in this case the nation is left holding the marker for their bad bet. Why? Because the government decided to bailout Fannie Mae and Freddie Mac, that’s why. I don’t consider that a good deal.

What amazes me most of all about this story is that the former CEO of Fannie Mae, Daniel Mudd, and the company’s executive leadership is not under criminal investigation. Nor do I hear anyone in Washington calling for such. If I did what it appears the folks at Fannie Mae did I am fairly certain I’d be facing jail time. Incredibly, the talk is rather about how much compensation Mudd will receive under his severance package. Unbelievable! Everyone knew Fannie Mae was deeply troubled. Even after Treasure Secretary Henry Paulson was given greater authority over the mortgage giants by Congress in July, investors were still leery of putting capital into the firms. Yet, as recently as July 18, 2008 there was Daniel Mudd, being interviewed by Judy Woodruff saying, “Fannie Mae is very financially sound.” Yet it seems it was common knowledge that business was not good in the strange, quasi-governmental world of Fannie Mae. Where is Christopher Dodd (D-CT) the Chairman of the Senate Committee on Banking, Housing, and Urban Affairs? He’s busy taking shots at the Bush administration.   Where is the Department of Justice? Did I mention former FBI Director, Louis B. Freeh, is on the Fannie Mae Board of Directors?

One reason, perhaps, we aren’t hearing much out of our Congressional leaders (as if we have any) about this mess is that Fannie Mae and Freddie Mac have spent tens of millions of dollars in lobbying efforts. According to Bloomberg.com Fannie Mae employed 20 in house lobbyists and 48 outside firms. Furthermore, Fannie Mae and Freddy Mac have contributed $19.5 million to federal campaigns over the last 20 years. So I am not surprised that no one seems to be calling for a criminal investigation. 

So, here we are in 2008, some 40 years after Fannie Mae was privatized and Freddie Mac was created, again nationalizing the mortgage business in America. Maybe it will help in the long run by stabilizing the mortgage market and maybe it will hurt by sending the Federal government and the economy into a deficit tailspin. The only thing of which I’m sure is that barring real reform, at Fannie Mae, Freddy Mac, and the Federal government, the American public will be the looser. 

I think Obama’s policies likely will be different from those of Bush and I think we have a good idea what Obama’s presidential policies will be if elected. If you examine Obama's voting record in the Senate you find he is one of the most liberal in that legislative body. I’m sure Obama would nominate liberal judges cut from the same cloth as Ruth Bader Ginsberg who would legislate a leftist agenda from the bench.  I’m sure Obama would increase federal spending even faster than W did regardless of the fiscal consequences. I’m sure Obama would open a dialogue with the madman from Tehran, Ahmadinejad, who would be all too happy to get favorable world press by talking with the President of the United States, all the while making his nuclear bombs and laughing at the gullibility of the west. I’m sure Obama would take drastic action against the right to keep and bear arms, perhaps resurrecting the Clinton assault weapon ban for starters. I’m sure Obama would busy himself promoting universal health care. In fact, from his address last Thursday, I’m sure Obama would increase the role of the federal government in our lives across the board. 

On Obama's acceptance speech, I thought the evening was a well produced show, but nothing more.  I have been avidly following politics since the 1988 presidential election and I don't recall anything like the spectacle we saw last night at any other convention.  As all the talking heads were pointing out, Obama is the only candidate who could draw a crowd of 85,000, actually filling a sports stadium.  The film was well done and I have to admit, after watching it, I even thought it was a great story and I am pretty cynical when it comes to politicians.  True, he seems to have a nice family and his kids are cute. That being said, I thought the speech itself was flat and permeated by an irreconcilable incongruity.  The candidate of change, a self-proclaimed product of the opportunity represented only in the United States, gave a speech that simply recycled the same Democrat party line of more government and higher spending. This is a party line I have heard for the last 20 years and left Sen. Obama with no distinguishing characteristics from Hillary Clinton or any other Democrat.

The story of Obama’s life is totally incongruous with the policy positions he staked out in the body of his speech. In the film we heard about the hardworking, self-reliant family in which the Senator was raised. We heard about his grandmother working her way up to middle management. We heard about his mom putting herself through school. We heard about Barack, himself, getting through school on scholarships and student loans. I don’t recall any mention of he or his family receiving government largess as a significant contributing factor to his undeniable success, but rather something they overcame. In fact, Obama was presented as a self-made man and a product of the American Dream. Immediately following this, Obama presented an updated version of the same old Democratic positions comprised of more government programs to do for the people what they supposedly cannot do for themselves. This incongruity, more than anything else, is what struck me about Sen. Obama’s speech. Are we supposed to conclude that he could do it, but only because he is so smart and capable, whereas the rest of us morons have to depend on the government? 

Looking at specific positions Obama took, I heard the standard Democrat rhetoric about healthcare, immigration, education, taxes, abortion, gun control, and welfare. Focusing on a few of these positions, on healthcare Obama called for universal coverage so no one is left without access to healthcare. This used to be called socialized medicine, but that brand name didn’t sell so it was cleverly repackaged as universal coverage. I work in hospital administration and let me tell you the practical implications of universal health coverage will be government rationing of care. Obama, nor anyone else, can deliver on the promises he made. Health care is a finite resource. There are only so many doctors available in any given year to do a finite number of visits and procedures. There are a finite number of hospital beds, X-ray machines, MRIs, operating rooms, etc. Because healthcare is a finite resource with high demand it is currently allocated on the basis of ability to pay. If the Federal government took over healthcare administration they cannot simply increase supply, that is create additional healthcare resources, so necessarily they will have to control demand. It already happens and more than people realize. A government agency, now called the Centers for Medicare and Medicaid Services (formally the Health Care Financing Administration), sets treatment guidelines, through what are called National Coverage Determinations, which tell doctors the services for which they will or will not be paid. Paid is not even the correct term, it is called reimbursement. The way the system is designed, the government tells us (the healthcare provider) what they will reimburse for services rendered. It is called a prospective payment system, and it is totally set in advance and based on the patient’s diagnosis and treatment codes. In other words, we do not bill for our services and receive payment on that bill. We are told we will be reimbursed a set amount based on the patient’s diagnosis code and treatment code as reported by the physician and hospital. Without going into all the boring, technical details, allow me to summarize by stating the government is already rationing healthcare. Now this applies directly to patients with Medicare or Medicaid, but sadly, now the commercial insurers are often following suit with the government coverage determinations. This is not to say we do not need reform in the healthcare system, but based on what I have seen we need less government involvement, not more.

Next, let’s consider Obama’s position on education. He decried the lack of opportunities while having just been portrayed as the product of America’s opportunity. First, on higher education, Obama made it through college and law school on his own. That is very commendable. I went through college and graduate school on my own a decade after Obama. I left my parent’s (rented) house with a couple hundred dollars in my pocket and an old car I bought with my own money. Both of us relied on scholarships, grants, student loans, and hard work. Those opportunities are the same now as a decade ago when I was in school. I would say from experience any student in the United States with enough motivation and commitment can go to college. Now, as for primary and secondary education, we all know our grade schools are bad and getting worse. However, the liberal agenda is as much to blame for this as anything else. Teachers became more focused on their student’s self-esteem and how they feel than how they perform academically. In the face of a failing student body, curricula were watered down, so more students would pass. Schools also became places of social indoctrination, teachers leading the vanguard of the PC, rather than institutions focused on teaching students the basics necessary for success after graduation. All the while education expenditures have been increasing while performance falls. At least Sen. Obama paid lip service to the role of parental responsibility in educating  our children, but as for his policies I just saw promises of more money and government programs. As Sen. Obama well knows from his own life experience, we don’t need any government programs beyond what already exist to get an education in this country. Again, schools are in need of reform, but not by more Federal control, but rather more local control. 

Then there were his statement on gun control. Sen. Obama said we can uphold the Second Amendment while keeping AK-47s out of the hands of criminals. Of course we can. We already do. There is nothing new from the candidate of change on that one. I assume the Senator was referring to reviving the assault weapons ban a la the Clinton era. I would first point out that less than 2% of gun crimes are committed with assault weapons according to the Dept. of Justice and second that laws already exist to prevent criminals from purchasing guns. According to the Dept. of Justice the vast majority of criminals who use guns in their crimes obtained their guns illegally. You can pass all the gun bans you want, but criminals will still get guns. Criminals, by definition, are those who violate the law. So why does anyone think passing yet another gun law will suddenly dissuade a criminal from illegally buying a gun? The good Senator also has connections to extremely anti-gun politicians like Richard Daly in Chicago. I doubt Obama has any respect for the Second Amendment.   In this position, Sen. Obama is just parroting the Democrat party line not representing change. 

The Senator tried to bridge this incongruity, representing himself as a self-made man who would bring change to Washington while simply repeating the standard party line, by at least paying lip service to self-reliance, self-discipline, and hard work. However, I found no substance supporting those words, only promises of more government and entitlements. I am a self-proclaimed conservative independent who is registered to vote as, “declines to state party affiliation.” I am the true independent not tied to the Republican Party, which I dislike only slightly less then the Democrat party. In my opinion (and this is my blog so I get to voice my opinion) both major political parties are corrupt and more interested in power than the good of the country.  If Obama was what he claimed to be, a force for change, with new ideas I could consider voting for him. From what I saw last night, he is not. That would be too much to expect from the Democrats.  From what I saw he is a liberal Democrat trying to represent a new image after the failed Kerry campaign in 2004. Thus, I found the entire spectacle as rather narcissistic and disingenuous. In other words, it was Obamaclese at the Barackopolis.