The sky is falling!

The New Depression is starting! The sky is falling! Banks are going to collapse and take your money! Hedge funds are going to go up in flames tomorrow! A lack of short-term liquidity is going to cause a severe recession!

Okay, no one is yelling that last one, but I think that is the most likely result of the credit and mortgage mess. Some banks and hedge funds will fail. Many people will lose their jobs, and it will be tough to get a loan to buy anything. This one may last for years--other countries have gone through similarly long recessions due to bank credit problems (take Japan and Finland, for instance).

What is the proper role of government in stopping this crisis? A $700 billion bailout failed today in Congress, and the stock market took a long jump with a short rope. Was the bailout the right idea?

A smart politician would say that the bailout was not a perfect solution, but it was good enough for now. It would have stabilized the markets (on the positive). Although it might not have been enough to keep them stable long-term, and it would have been horrifically expensive (about $2800 for every man, woman, and child in the U.S.), it was worth the risk to keep the economy running.

But even if it will cause regular people to lose their jobs and not get car loans, regular people dislike saving Wall Street types from the trouble their reckless greed has brought them. The bailout seems like a desperate, rushed gamble from a president who has cried "Wolf!" once too often. But now, a real wolf is at the door, and the nation is divided at the wrong time.

Are there viable alternatives? Yes. The government could raise the limit on FDIC bank insurance (protecting us little people), provide temporary credit to keep the markets liquid, and send government accountants into every major credit house and bank to open the books and determine which companies are financially sound, and which are not. Making the company books public would greatly help to mend the crisis of confidence in short-term credit that is causing our economy to seize up like a old Chevrolet running a few quarts low.

But do we have time for Washington to come up with another plan? Those old biddies will be arguing while Rome burns, and none of them are currently favoring the ideas above. It's good not to rush, except when it is called for--delay can be a risky proposition when it's your neighbor's house on fire. Waiting for a new, cheaper plan might save you or I a few hundred dollars, even a thousand dollars. But in the end, isn't all that matters is whether I get to keep my job, and you get to keep yours? I'd pay up for that. I bet most people would, too.

When you think about it, I bet the government won't gesture and POOF, $700 billion will disappear overnight. No, they will take time to spend it, and better plans can be made as the markets calm back down. After all, there will be a new president come January, and a new Congress as well. I think they might fix things. At the very least, people will believe it when they tell us that the sky is falling. Really.

An editorial declaration

This blog is voting for Obama. If you like McCain, you are probably a nice person who has ideological issues with Obama, and prefer an inexperienced woman VP and a president that has been a soldier. That's all good. I could try to convince you in a long page that you should vote for Obama, but really, who reads this blog that much? But I will try, and try to do it fairly.

So, five simple reasons you should vote for Obama:

1) Bigger tax cuts for the 95% of Americans who need them. That's right, Obama's tax plan will raise taxes on the rich back to Clinton levels, and cut taxes more than McCain (5% vs. 3% for McCain) for almost everyone. Taxes on small business owners will not increase much, all statements to the contrary. Obama's overall spending plan is just more responsible than McCain's, as well, which has big implications for our current financial crisis.

2) A better plan for energy and the environment: Obama is committed to investment in renewable energy that will create jobs and make our country less dependent on foreign oil (and therefore safer). McCain will give subsidies to oil and nuclear, but very little to renewables. He has consistent refused to vote for renewable energy subsidies. Offshore drilling will provide only 2% of the oil this country needs, while jeopardizing fishing and tourism economies worth hundreds of billions of dollars.

3) Better judgement. Obama has consistently taken foreign policy positions that reflect foresight and listening to experts. McCain shoots from the hip and follows the Bush doctrine of unilateral exercise of military power. Oh yeah, and Obama will get us out of Iraq (saving 10 billion a month) quicker than McCain. The U.S. has bled in Iraq for many long years now: it is time for Iraq to stand up as we stand down. Biden has met more heads of state than I could count.

4) Obama is honest, and smart. He believes in making government and businesses accountable through smart regulations. As a former Keating Five member, McCain makes a lot of noise about making Wall Street pay for its mistakes, but that's a flip-flop driven by today's events. At heart (and during his last few decades in the Senate) McCain is a deregulator, a former Commerce chairman who is surrounded by lobbyists, all on staff in his presidential campaign.

5) Obama is a real lower-middle class American, and he remembers where he came from. He grew up poor, and went to school on scholarships and loans: he was a community organizer after he made it. He has spent 19 years in Christian churches, married a smart woman who has also given back to her community, and has two young daughters who he obviously loves. He made his money by writing two books, not by leaving his wife for a beautiful heiress.

Some people call Obama elistist, because he is smart and doesn't act all down-home on the campaign, like Bush did to great praise (and like Palin does now). Elistist? Look at how he grew up--grandparents don't let you grow up elistist. You grow up old-fashioned, and grounded.

And that "bitter" remark? He wasn't talking about flourishing small towns: he was talking about economic ghost towns. What if he said: "I was fumbling for words, and I made a poor choice of words [he said as much in apologies]. Rural people are scared of losing the economic heart of their town, and they need solid things to hang onto. They hang onto religion to fill their hearts, they hang onto guns to protect their homes and fill their freezers. They just hang on. That's American toughness." That sounds like what Obama HAS said--in his speeches, and on the trail.

Now, Obama is black, and some conservative people can't trust a black man, especially one with such a foreign-sounding name that grew up in Hawaii. But people, this is America. We don't care if our bus drivers are Persian immigrants or if our doctors are part-time hippies from Maine. If they do their jobs well, we pay them. Obama will do his job well, and I am going to vote for him.