McCain is Unethical and a Liar – and maybe Worse

It’s one thing to pull a stunt like John McCain did yesterday and ‘suspend’ your campaign and try to move/cancel debates.  It is totally another to play a game of chicken with the U.S. economy and the direct well being of almost all Americans.  Mr. McCain’s lastest gambit in his September suprise was to blow-up the bailout package that President Bush, Democrats, Republicans, and the Fed basically had agreement.

Whether I fully support this proposal or any proposal that had a genesis in Secretary Poulson’s original plan is a conflict I am still struggling to understand.  The reality is, for most Americans including myself, this is too complicated for us to understand.  The best we can do is choose people who we trust that understand the issues at stake and have faith that they are working in our best interests.  I tend to believe the proposal presented by the Congress to the President today was probably nescessary.  A bipartisan Congress, Secretary Poulson, the President, and Fed Chairman Bernake agreed.  The theory goes that if we do not propose a solution that makes money available to Wall Street, the core engine to our economy is imperil.  As President Bush described actually very well last night (see I do compliment the Republicans), the ‘money’ well is drying up.  When companies have investments that touch on these dirivitive assets, and they need liquidity – they won’t have it.  That means laying off people, companies going under, and prices going up (less supply and same demand).   Further they can’t turn to banks to get the loans they need either – neither can you (for that car, boat, house, basic needs, etc.).  Banks don’t have as much money because their investments, which is what banks do with your money, are worthless.  Interest rates go up, borrowing then goes down.  When borrowing goes down, there is less money available in the economy to buy goods.  When goods aren’t in as high demand, companies go under and people are layed off.  Do you see the cycle?  There is a potential for devastating stagflation – when interest rates and inflation are going up.

So, this plan was to ensure that the Government could buy and hold these assets.  This would provide firms and banks with liquidity – cash to hold interest rates down and manage inflation.  It means companies could afford to do business.  It doesn’t mean a robust economy, but not one completely stalled.  The added effect would to spur on more gains on Wall Street which means increasing stock price and creating value for investments.   An economist will tell you that there are a lot of holes in what I described (and I know some of them), but I believe this gives you an idea of what the problem is, why this bail out may be nescessary, and how it all works.  I don’t nescessarily agree and feel 100% comfortable that $700B is the right answer, but not being an economist I trust who I trust and believe my understanding to be strong enough to come to this conclusion – a package like this is probably nescessary.

The Congress – led by the Democrats, but by no means without the significant bipartisan help of Republicans took the core of Poulson and Bernake’s plan and worked seven very long days to hammer out an agreement.  This is actually a huge accomplishment because much of the package goes against the Republican’s core philosophy of a free market economy and ‘corporate welfare’.  There was a lot of pride swallowing.  You can argue much driven by an election 40 days a way, but still against their core beliefs.  Additionally, the Democrats railed for typical Democratic ideals but also gave some – particularly allowing Judges to renegotiate mortgages in default.  Senior Leadership from both sides and the President all said they had a deal.  Then came the President’s meeting.

The meeting lasted an hour and McCain didn’t speak for nearly the entire length as the plan was vetted and discussed.  Towards the end, McCain mentioned, with the support of Republican Senator Shelby, that he thought the U.S. should not rush into an agreement, that the agreement was bad, and that some Republicans had better alternative policies.  With that statement, McCain unraveled the deal. 

McCain is not an economist.  Hell, McCain has demonstrated his grasp of economics to not be strong (and even has admitted as much).  But he torpedoed 7 days of work by those who have spent 24 hours a day understanding and responding to the issue and knows the give and take that has gone into these negotiations.  A meeting with the President to finalize the deal is not the place to put up your red flags.  It should have been done last night when the deal was starting to get finished or this morning – if at all.   What the Democrats said yesterday came true – presidential politics will hurt the process.  It also proved this is simply a political ploy by McCain.  He is toying with the US economy because he may lose the election to the people’s choice.  It is reckless, it is irresponsible, it is scary, and it reprehensible.

The politics go beyond simply delaying a debate, or showing leadership, or hiding Palin.  It also goes to supporting those who have always supported his campaigns – Wall Street and big investors (aka the rich).  The policy they are floating is another form of trickle down economics.  They want to elmininate Capital Gains taxes. In addition, there would be suspension of dividends (earnings owed to investors) and a private mortgage insurance backed by the Government.  What this plan does not do, is allow any of the progressive Democratic ideas that were to help ‘main street’ America.  Let it be known – this policy will only benefit Wall Street directly.  

The more news comes out, the more that it is evident this was an orchrestrated plan by McCain and some in the GOP (if not all) since early yesterday.  What this potentally will allow is for McCain to take that central role in crafting a deal. It also blackmails the Democrats because they need to get on board and pass something.  The GOP also knows, while perhaps the right decision, the plan was not popular with voters and an alternative makes them stars.   Additionally, if it can be done without a large tax payer burden, then he can let America know he saved us $700B dollars.  Here’s the problem, there’s a great chance it won’t work, but we won’t know that until well after the election.  In the interim, Wall Street and the rich can continue to get healthy as the middle class and most of America suffers.  McCain is truly selling his soul to the devil right now.  Any little respect I had for the man is now gone.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: