Tuesday, September 16, 2008

Obama Wastes No Time Hitting McCain Over "The Fundamentals of Our Economy are Strong" Claim

Go get 'im, senator. What I like about this ad is it is simply facts, and McCain's own words making him look like the out-of-touch clueless idiot he is. And the music is good, too.


BaseballCoach said...

Some more facts:

Real GDP -- a measure of the economy -- was up 0.9% in the first quarter 2008, and up 3.3% in the second quarter 2008.

Charles M. Kozierok said...

What relevance does that number have to the underlying problems with the economy? Does it matter to voters? Can we even believe these figures given the games that are played with official inflation figures?

Frankly, I hope McCain starts throwing those numbers around in his stump speeches. It will just continue to show people how clueless he is.

BaseballCoach said...

First, the GDB figures are not subject to any kind of games. These figures are real.

The relevance is that it shows the United States economy is not even in a recession. Our workforce produced more goods and services in the 2nd quarter than it did in the first, and more in the 1st quarter than it did in the last quarter of 2007.

Since 1980, there have been 8 periods of economic contraction, and last quarter was NOT one of them.

The business cycle is just that - a cycle. It is largely independent of who occupies the White House.

The current problem in the US economy is limited to the financial sector. The housing boom earlier in this decade caused many people to buy more expensive homes than they could afford. Lenders offered introductory teaser rates, no interest loans, no documentation loans, and reverse amortization loans. The people that got into these mortgage products knew that their payments would eventually go up to a point they could not afford, yet they went ahead anyway. Lenders packaged these mortgages into risky securities, and the likes of Countrywide, Bear Stears, and Lehman Brothers are paying the price.

Of course, your candidate would blame this on the big bad lenders who pushed these mortgages onto unsuspecting buyers. While I don't agree, I certainly would never call him clueless. I think that those that have gotten into loans over their head are responsible for their own poor financial decisions.

The solution to the current problem in the financial markets is to let the the economy correct itself, with limited government intervention. (Fannie Mae and Freddie Mac are examples where I think the government was right to get involved). This means that some bad companies go under. In the Savings and Loan Crisis of the late 1980's, more than 1000 banks failed, yet we recovered just fine.

Excepting some of the current financial markets, the economy is relatively good. GDP growth continues. Unemployment is up from recent lows, but still inline with historical averages. Borrowing rates are still near their historical lows, and consumer spending continues.

But don't let that stop you from posting gloom and doom predictions for the United States.