Friday, October 24, 2008

Scare Tactics

Today's headlines are full of stories planted by Republicans and their sympathizers to try to move McCain into the lead through fear. We have seen this tactic before from the Republicans. They have used the threat of terrorism, the gay marriage debate and now they are trying to blame a worldwide financial depression on Senator Barack Obama.

In the October 24, 2008 New York Post, Charles Gasparino writes an article with the headline, An Obama Panic? He then goes on throughout the article pointing to the proposed tax policy as a reason for the tumbling financial markets. This is more than a fear tactic, it is an outright lie. Financial markets are tumbling because of a flood of unregulated Credit Default Swaps, that were left unregulated by the policies of Greenspan and the Republican Congress of 1998. The world is not in a panic because the United States is on the verge of electing a progressive who realizes that the strength of an economy comes from those that produce a product or service.

An Economy grows because of a solid foundation, not from the financial manipulation, games and risky derivatives of those in the Financial Industry. Although in the article Mr. Gasprino points to the right culprits in the current crisis, " "Of Course, the market turmoil is first a reflection of grim reality - the bursting of the housing bubble and the billions upon billions in write downs and losses that have forced upon the hugely leveraged financial companies that had cranked big profits during the bubble years". Here, Mr. Gaspirno hits the nail on the head, but for the rest of the article he claims that the failure of the markets to recover is because they are looking to the future under an Obama Presidency.

Mr. Gaspirno fails to realize that the leverage that he speaks of must be unwound and naturally that would cause market liquidation coupled with the realization that the world is in the midst of a global recession which will see Corporate profits fall. Commodities continue to fall because less demand will mean less production, less production means less demand for resources, less demand for resources means a lower commodity price. It is an economic cycle, it is not because of the perceived policies of a Democratic Administration. Mr. Gaspirno would serve his readers better if he discussed how the Republican policies of deregulation and the lack of regulatory oversight have left us in the situation we are in and that a continuation of these policies under a McCain Administration will only lead to more of the same. If the financial markets were really reacting to future political policy they would welcome the resurgence of an Economy built from the bottom, and would reject a McCain/Bush/Republican Policy of more of the same.

If the markets were to react to a political policy they should react to a political policy that will continue to destroy the working and middle class that are the actual producers of the goods and services of the economy, and not one that favors the manipulators and hedge funds that strip the wealth from the workers of the economy.
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