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Bush's Fuedalism; Obama's Socialism; the "N" word and Rush



March 03, 2009 – Comments (9) | RELATED TICKERS: GE , JPM , GS

In the past few weeks, in particular this weekend when L. Rushbaugh addressed the Conservative Pathetic Action Conference- some hanger on believers in the Bush administration from what I could tell watching on TV- many so-called conservatives have been claiming that President Obama is a socialist.  That is a laughable concept rooted in paranoia, an inability to grasp basic math and a complete misunderstanding of who has ripped you off. 

Let's address three simple points about what is going on right now:

1. Many people are afraid of a big black man as President.  It's sad, but true.  There is no way around it.  In fact, many conservatives trot out racism as an attack on liberals and moderates- whom conservatives lump in with liberals, which is a little bothersome to this moderate, but at least they're not calling me a conservative.  To accuse the people who voted for Obama as racist, is such a logical leap, that I am considering paying a visit to my college professor in Logic to figure it out.  I'm pretty sure there isn't an if/then statement to describe this phenomenon, but I'll try.  If you voted for Obama, and are not black, or even if you are, then you are a racist.  I'm pretty sure that doesn't make sense, but it is the argument that Limbaugh and others (Sean "hey listen to me so I can get paid too" Hannity) have been trotting out since the primaries.  I wish Rush would just use the "N" word or one of his stupid followers, maybe Joe the Plumber, would, because you know that's what they are thinking in one way or another (to be fair, in Rush's case, I think he's just profiteering on the ignorance of his audience as the Republican National Committee Chairman Michael Steele pointed out this week).

2. Now, let's go to basic math.  During the Bush administration and a Republican Congress for six years the Federal Govt under ran up massive debts (note: I hear this is not a conservative principle).  Also during this time period, Corporate governance rules were relaxed allowing corporate boards to be packed with friends of friends of Executives, which resulted in record bonuses during a period where the economy and markets were flat (this clearly did not start under Bush, as described in Liar's Poker, but it did accelerate with a weak Justice Dept under Bush).  From 2002-2004, anti-fraud provisions on lending were relaxed via Federal Pre-emption from the Office of the Comptroller- a division of the Bush Treasury Dept, leading to writing of a massive number of failing loans.  And the coup de gras, the Bush SEC allowed the big five (not so big anymore) investment banks- Bear, Lehman, Goldman, Merril and Morgan- to leverage their balance sheets at up to 40:1 in the words of them Goldman CEO Hank Paulson, to be competitive in the world financial markets (paraphrasing his Congressional testimony in 2003).  Where conservatives are hanging their hats regarding mortgage defaults sky rocketing is on laws passed in the 1970s that resulted in no increase in default rates prior to 2002.  Yeah, I know that doesn't make sense, but I've heard it a lot so I mention.  I realize I didn't use any numbers really, but it seems conservatives can't remember numbers at the moment (probably because the numbers don't support their arguments) so I thought I'd stick with broad stroke mathematical concepts that I think should be easy to absorb.  Besides, I'm an economist who manages money, so I like ideas too.

3. Well then, who has really ripped off the American people?  Common sense tells me it isn't the guys who just took office.  I look a little further back (which usually is where to look for today's problems) and I land at the guys who were responsible for everything in section 2 above- including Greenspan who had no concept of what he was perpetuating as he admitted a few months ago.  Now I am not discounting that Clinton signed the Gramm-Leach Act (remember, I'm a moderate not a liberal so there is no political allegiance here) which was a precurser to this collapse.  Clinton shares fault for that piece of legislation (which we could note Hank Paulson testified for), though I understand that nobody thought the idiocy or conspiracy or both I suppose, would happen under another administration.  The result of the Bush policies, as talked about 4 years before they fully hit America in the pocket books (Altman's book: Public Affairs-1994), led to a neo-fuedal structure that is crushing the middle class right now.

As for Obama's socialism, if you actually read his budget ideas and the stimulus package, what you will see is that except for one omission (in my opinion, which I'll get to later) both are good pieces of imperfect legislative framework.  Now I don't like the debt these bills will create for my grandkids- I don't mind the debt on the kids, as future generations should have to support their parents, but not their grandparents in this post Vatican II Catholic's mind.  It's only natural since we're all dead in the end anyway (yes, I've revealed my Keynsian leanings there when things get rough, however, Friedman was right on how to behave when things are good- too bad Bush ignored Uncle Milt).  Let's all face reality, a healthy short term dose of government spending is the only thing that can pull us out of this mess, that (getting to it later) and forcing mid-size banks to merge in return for the Federal govt providing partial loan guarantees- banks that don't want partial loan guarantees can go it alone, whatever the consequences- to bring back broad market lending.

Now, I seriously hope conservatives don't recoil, condemn me as a hater or whatever it is they do in their heads to validate the past eight years of them supporting the Republicans.  I don't hate.  I believe Conservatives and Republicans- though the two aren't tied at the hip and shouldn't be- have an important role in governing in this country by helping providing balance.  Heck, I thought Ron Paul was a kook when one friend introduced him to me, now I think the guy is pretty close to on the money with a lot of things.  Jimmy Rogers is somebody I idolize, if you listen to his economics, I don't think he qualifies as a liberal.  What I think is that real conservatives have to distance themselves from the Bush ideals, while not piling onto the guy who hasn't had a chance yet, because that just seems like sour grapes.  In that regard, Rush is completely wrong in starting to campaign against Obama today.  It will backfire because most moderates who could vote either way in any election can see who really ripped them off, and we know it was the Bush administration and those CLAIMING to be conservatives, when actually they were fuedalists.

9 Comments – Post Your Own

#1) On March 03, 2009 at 12:11 PM, blake303 (28.64) wrote:

How is encouraging mid-sized banks to merge prudent given the number of institutions already in the "too big to fail" category? I would prefer to see the largest financial institutions split up into independent regionals. That aside, it is nice to hear a moderate view amongst the extremists that usually make their way onto these blogs. Good post.

The Austrians and Bush apologists will be here to attack you shortly. It has been nice knowing you.

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#2) On March 03, 2009 at 12:19 PM, jstegma (28.79) wrote:

Bush is no longer in office.  Maybe bashing him for a while will work, but it will not sound good to try to bash the guy 3 or 4 years after he left office. 

At some point someone has to pick up the fumbled ball and run with it.


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#3) On March 03, 2009 at 1:08 PM, blake303 (28.64) wrote:

Right on cue.

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#4) On March 03, 2009 at 1:25 PM, Laniel (< 20) wrote:

So, the Bushies get to bash and blame Clinton for everything wrong for eight years, but the Obamanistas don't get to do the same to Bush? How is that fair?

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#5) On March 03, 2009 at 1:46 PM, stickman555 (< 20) wrote:

Holy cow, how's the Kool-aid on your planet?

kirkydu wrote-

I wish Rush would just use the "N" word or one of his stupid followers, maybe Joe the Plumber, would, because you know that's what they are thinking in one way or another.

Now I don't like the debt these bills will create for my grandkids- I don't mind the debt on the kids, as future generations should have to support their parents, but not their grandparents in this post Vatican II Catholic's mind. What I think is that real conservatives have to distance themselves from the Bush ideals, while not piling onto the guy who hasn't had a chance yet, because that just seems like sour grapes.


I am no rocket surgeon, but I do think that the millions of people who make their living dissecting every possible outcome of Obama's economic policy have a little more credibility than someone who just spouts "they are racist" because they are against it. When will you pathetic lemmings realize that we could care less if the president is purple, as long as his economics make us more prosperous and sound as a country. The markets reaction to this is expected, you increase taxes on people who make more money, increase tax on money made in investing, widely spend that money on your friends and rediculous programs that benefit no one but the person who wrote it, then you get this type of reaction.

I am not a liberal or conservative, I refuse to associate with either of those crooked parties, politics in general is more corrupt than any Fannie or Freddie scandal, and as long as people with weak self esteems coorolate their self worth and identity with a political party as if it was their favorite football team, we will always be at odds with eachother. Quit pointing fingers and placing blame, you sound worse that my 8 year old screaming "well he hit me first" If it was wrong when Bush did it then it is wrong now. Call a duck a duck. To look at this rediculous wasting of money and try to defend it by saying "well, look at all the Bush spending" is moronic, that is no defense. If it was wrong then, its wrong now.

One thing I know and that is I know nothing. But I learned a long time ago you cannot borrow your way out of debt. Obama goes on TV and tells the country to tighten their budgets and cut out the frills to save money, meanwhile increases the taxes on income, energy and consumer goods and establishes more watseful spending attached to what looks like some pretty good programs. We would save a buttload of cash if they went line by line through the budget now and did some of their own belt tightening of wasteful programs, he could have made up the 500 billion just by cutting out the BS we all know is in there. If Bush had wasteful stuff, then get rid of it. No new BS programs till we show a surplus. Look the country in the face and tell them YOU are gonna cut some frills too. Hard times all around.

We all know that Bush is involved in the oil business and surely profited from the war and the price of oil, and was hammered by the media and the democrats. but where are these same critics now that Obama is in bed with GE and has dedicated trillions of dollars to BS solar and wind energy which, oh, hey look, is all made by his buddy Immelt at GE. Where is the Moore movie on that one?

I cannot believe that the same God who has endowed us with such gifts as intelligence, logic and reason has intended us to forego their use.

Here endeth the lesson.

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#6) On March 03, 2009 at 1:48 PM, brwn8484 (< 20) wrote:

Welcome to the new world order.... Every person that questions Obama is blamed for racism.  Interesting... in a way thats just what racism is!  blaming someone based on their color or some other fixed misconception(like Obama can never be wrong). 

One day the liberals (and socialists) will wake up with exactly what they want.  Socialist healthcare, socialist welfare, socialist (in)security and socialist government.  Remember when the animals in Animal Farm began asking questions about why their leaders were getting special treatment.... They were told some animals are more special than others.  Well welcome to America, where some leaders are more special than others.

Otherwise, why would so many people be supportive of a plan that will destroy our nation, our values, and our people.... all from within!

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#7) On March 03, 2009 at 2:25 PM, blake303 (28.64) wrote:

Every person that questions Obama is blamed for racism.

That is not what he is saying at all. Quite the opposite. He is discussing conservative accusations that Obama supporters are racist, which in Rush's case would be incredibly hypocritical in light of his firing from ESPN for making racist comments.

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#8) On March 04, 2009 at 10:02 AM, kirkydu (90.34) wrote:

thank you Blake.  Ding ding ding, CORRECT!  Rush is a guy who supports marriage so much he's completed three of them.  He's against moral vices, so he took superhuman doses of drugs to verify (copyright infringement verification of Jonathon Stewart of the Daily Show). The guy is as honest as a $3 dollar bill, America's number one huckster- though Hannity is mounting a challenge. 

Stickman, I understand and agree with your premise of right is right, wrong is wrong.  To undermine a new President at this stage is idiotic (almost said foolish, but didn't want to throw a compliment inadvertantly) and disingenuous however.  Not recognizing that it was Bush policy based on dogma (and maybe theft) that has crushed the economy by allowing animal spirits to run wild and allow financial markets to be pilfered for most of his time in office is also idiotworthy. 

From an economic standpoint, your mantra Stick is not supported by numbers or common sense (study elasticity much?).  Simple economic fact is that when high or mid level taxes are raised there is a problem brewing, not when low taxes are raised.  The U.S. has among the lowest taxation in the world, as we've preferred to tax using inflation.  We can stand to roll back some breaks to the wealthy (which I and Obama define as the top 2% to 5% essentially) to hopefully avoid hyper inflation in the next decade.  And, yes, it is necessary to spend out of some messes, unfortunately, to avoid bigger messes.  Had Bush not spent the way he did, which was when there wasn't a big mess to fix, we'd not have such a big mess now.

Oh, thank you for backing my credibility.  Apparently you did a little research and figured out I du in fact make my living dissecting things like this. 

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#9) On March 04, 2009 at 10:10 AM, kirkydu (90.34) wrote:

Oh, re the mid-size banks.  Because they are largely insolvent, though not by as much as say Citi, they need massive capital infusions to be able to lend again.  The federal govt can't do that as then we'd all but guarantee massive inflation in the next decade.  What the govt can do is backstop some debt in exchange for mid tier banks consolidating.  Those banks probably have to merge or fail either way, so this is not some major policy issue, just a way to make sure our money is lent back to us as the govt forces cost structures down.  There will be plenty of competition as there are still banks every four blocks in most cities, so I'm not worried about that. 

I do not disagree that a few giant banks need to be broken up in theory.  The problem with that is that the U.S. uses Citi in foriegn policy so I'm not sure if we can break them up- though I agree with your premise.

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