The US Economy and the Race for President
My German cousin wrote me about the bankruptcy of the US bank, Lehmann Brothers. He is blaming the war in Iraq. He asked my opinion of the race for president. He said he thinks Sarah Palin is a hick and is inexperienced in foreign affairs compared to Obama and Biden. He says McCain is too old.
This is my response to him:
The problems in the economy have nothing to do with the conflict in Iraq. Things are much better in Iraq now.
The economy is a complex issue.
For several years, the banks made it too easy to get a loan for a house. The interest rate set by the Federal Reserve was unusually low. Many people who normally could not afford a house when the rates were higher were able to get a loan. The greedy banks did not make these people prove they could pay the loan, because the bank would sell the loan to other investors. Many investors like to buy mortagages (house loans) because they are usually a safer investment than others.Also, many people bought homes as an investment because the increased demand for homes made the value go up. They would keep the home for only a year, then sell it and keep the profits. This is called "flipping." The loans they took had an adjustable interest rate, which means the rate can go up or down, depending on what the US Treasury charges the bank for the interest. Instead of the rate staying the same or going down as many thought it would, it instead went up. That meant that many people could no longer afford the loan payment and had to sell the home for a loss, if they were able to sell the house at all. Too many ended up losing the house when the bank took the house away from them. So there have been rising mortgage defaults and plunging home values in the U.S due to tight credit markets. When there are more houses being sold than there are buyers, the price of the house goes down.
When the Federal Reserve raises interest rates, the economy cools off. It means fewer houses will be built and fewer business investments, which decreases jobs. If people lose their job, they can't make loan payments.
The U.S. Treasury earlier this month seized Fannie Mae and Freddie Mac, which are agencies that make loans. They are not really owned by the government, but the Treasury took them over to keep them from going bankrupt. This means the taxpayers are going to have to pay for Fannie Mae and Freddie Mac's negligence. That is why there is a need for stricter financial regulation than before.
As for me, the price of a house has no effect. Bob and I paid the whole loan for our house so we own it totally. As long as we don't sell before the economy gets better, we will be OK. We both have good jobs, so only the higher price of gas and food have an impact on us. Financially, we are better off than we were when Clinton was president.
There is a mixture of inflation and recession going on. The price of gasoline is going up because of more competition from China for oil and hurricanes in the Gulf of Mexico have stopped pumping for oil. The 2005 Hurricane Katrina is still having an effect on this. Also, there are environmentalists that want the price of gas to go up so that Americans will buy less gas. They don't allow drilling for oil in our own country and push for more corn to be turned into gasoline, which makes the price of corn go up. The increase in gas prices to fuel farm machinery and higher corn prices means higher food prices. Usually, in a recession, prices go down and that is not the case this time.
Americans are dependent on gasoline to power our cars until an affordable car is on the market that requires less or no gasoline. I hope that will happen very soon. There is talk of a car that is powered by air compression being on the market soon. It is made in India. One can recharge it by plugging it into the household electric socket. It only goes 175 miles before it needs to be recharged, so it will mean that gas stations will have to make available a way to recharge the tanks. If that happens, we can pay less money to the Arabs. That would make our economy much better because we would have more money to spend on other things.
Please don't believe what the media says about John McCain and Sarah Palin. They have 10 times more experience that Obama. Sarah Palin is the governor of Alaska. She manages a multi-billion dollar budget. She has cleaned up corruption in the government of her state. She has made it possible to build a natural gas pipeline through the state that will make our energy cheaper. She had to get Canada to agree to let Alaska do this. That takes a lot of work to make another country agree to this. Sarah Palin is the chief commander of the Alaska National Guard. The Alaska National Guard is on duty full-time because it is so close to Russia. They are our first line of defence against attack from Russia. That mean that the US military has to work closely with the Alaska National Guard. She has done a great job in this role. The Alaska National Guard love how Sarah Palin leads them. If Sarah Palin is a hick, then my husband is one too. Bob loves to go deer hunting. Hunting is a big sport in this country. It is necessary to manage the wild animal population. It shows she has courage and is competitive, though she is still very feminine. I admire her for being a mom to 5 children and still able to work a job.
Obama was a "community organizer" which means he handed out papers for political candidates door-to-door. He was a state legislator for a few years, but wrote no legislation or got any passed. He got elected Senator because the person who ran against him had to quit the race and then the substitute candidate is a radical. Mostly, people voted for Obama because the politics in Illinois is corrupt and people feel sorry for a Black man. People feel guilty about being so racist against Blacks a long time ago. There was a lot of anger in the country against the conflict in Iraq and so he used that anger to get elected to the Senate, where he also has done no real work. He got there after the conflict started, so he can't be hated for voting in favor of it. It is getting better in Iraq in spite of what he has done to stop it. It would be a disaster to stop fighting now. Obama has never been in charge of any government and never had to balance a state or federal government. He knows nothing about how to fix the economy. He promises people he will give them government benefits that will fill their pockets, but has no way of paying for them because you can only tax people so much before the economy gets worse. That is not what is best for the country in the long run. He says he will tax only the rich, but what he would have to do to pay for all this is tax anyone who is making enough to have a spare dollar. He is almost a socialist or communist. We have never had any candidate for the president that is this extreme about the economy.
Obama is a butcher. He voted in favor of letting babies who survived an abortion die by withholding medical care. The legislation would have required doctors to care for a baby after it was born even if the mother wanted it dead. That is infanticide and killing a baby is murder. Obama is a radical extremist when it comes to the abortion issue. He is like Hilter when it comes to respect for human life. We already have a million babies die each year to abortion. Obama would defeat all the effort done in the last 30 years to stop the slaughter of babies.
Sarah Palin is to be praised for giving birth to her baby even though she knew it would be disabled. Her baby is the kind of baby Obama would have voted to kill.
Sarah Palin is the total opposite of Hilliary Clinton. She wears a skirt and lipstick. She is a real woman and mom. She loves her husband and family. She is in this race to serve, not to be famous or popular. She is not doing this to prove women are as powerful as men. She is more like the ideal American woman than Hilliary.
No person has all the experience needed to be president. Yet most of our presidents were governors of states, which is what Sarah is. Being a governor is a better qualification than being a Senator. For example, Ronald Reagan was the Governor of the state of California before he became President and Clinton was the Governor of the state of Arkansas. Governors of states are leaders, not just people who vote on legislation that was written by others. Governors of states have real responsibilies and manage huge budgets. Senators do not. In some ways, she is more qualified than McCain, Obama or Joe Biden.
However, McCain has been a Senator for a lot longer than Obama, so he is more qualified than him. McCain will be a much better manager of the economy than Obama.
Our country has been through times much worse than now, so I have hope that things will be better soon. What goes up must come down, and when the price goes down, the demand goes up. So what goes down will eventually go up. Our economy has done so much better since Reagan, that people forget how bad it was under Jimmy Carter (another former state governor).
Just as Israel was punished for its bad leaders, I fear what will happen if we elect such an incompetent, evil man as B. Hussein Obama. I am praying that the American people will make the right decision. In the news today, polls in 11 battleground states show Obama retains narrow lead as 78 Electoral College votes are still a toss-up. Sarah Palin has made the race for the White House nearly dead-level even.
Even my mom, who is a life-long Democrat, says she will not vote for Obama. She is offended that people say McCain is old at 72. She is 86, so 72 is young to her. That is an amazing change. A lot will depend on whether Catholics vote pro-life. The race is really just starting because most people don't pay much attention until the last 2 months of the campaign when the TV ads start. A lot has changed since it started almost 2 years ago. This race is going to be a lot of mud slinging, dirty politics.
In other news, I am hoping the Pope's visit to France will make more Catholics go back to church. Our Lady of Lourdes, pray for the United States!