Stimulating Nothing

Here is some more information that the negligent US media has decided to with hold from their readers and viewers.

It is all very well for President Obama to vent his anger on all those US bankers who continued to claim billions of dollars in bonuses while expecting Washington to bail them out after the sub-prime mortgage scandal brought the banks to their knees. But conveniently overlooked has been the curious part Mr Obama himself played in the sub-prime debacle.

At the heart of it was a 1995 amendment to the Community Reinvestment Act which legally required banks to lend money to buy homes to millions of poor, mainly black Americans, guaranteed by the two biggest mortgage associations, Fannie Mae and Freddie Mac. And no one campaigned more actively for this change to the law than Mr Obama, as a young but already influential Chicago politician.

It was this Act which, more than anything, helped to create the US housing bubble, well beyond the point where it was obvious that hundreds of thousands of homeowners would be likely to default. And in 2005 no one more actively opposed moves to halt Fannie Mae's reckless guarantees than Senator Obama, as he was by then. As the official records show, no senator received more donations from Fannie Mae than he did (although Hillary Clinton ran him close). Thus no US politician arguably did more to promote the sub-prime disaster than the man now expected to pick up the pieces, Rather like Gordon Brown, really.

Now in all fairness to the President, he was not the only one who was pushing the HARDEST against reform of Fannie and Freddie. That dubious honor goes to Representative Barney Frank. However, in the Senate there was no bigger defender of Fannie and Freddie than Senator Barackc Obama.

This is the major reason why I was against the banking bailout, the auto industry bailout and now the stimulus packages. These massive expenditures of taxpayer money are being done with no oversight - no strings, no protections to the US taxpayer were written into these laws. It was FREE MONEY and these industries were all for getting free money. But we all saw what happened when the President tried (rightly so in my opinion) to attach some common sense strings to the TARP money. Both Goldman Sacs and Wells Fargo have announced that they will be REPAYING the TARP money that they got. As the Goldman Sacs CEO pointed out "We would like to get out from under that..." (that being the CEO compensation cap). It has gotten to the point where other banks are rejecting government aid as a quick fix to their recent losses.

The moral to this story is there is no silver bullet, no magical cure to the economic straits we find ourselves in today. What we are in today, is part of the natural cycle of the economy. One of the biggest natural parts is this...the higher the highs, the further you have to fall when the fall eventually comes!

The best thing that the government can do to "fix" the economy is to STOP PANICKING! Panic is not going to fix this - only a calm, cool, reasoned (and reasonable) actions are going to turn this around. The average voter out there realizes this. When will these supposedly intelligent politicians figure it out?