Election 2008 Analysis

Ok folks, this one is insanely long... but it's a vitally important issue so hopefully it will be worth it.

I've been discussing the upcoming Presidential Election with my brother Mike and there is just so much going on, I felt I should share it. Hopefully, it's worth something.

Actually, the health care plan is one major reason I am against Obama. I thought about it and realized they are both going to do pretty much the same thing in office - either because they said the same thing (but try to emphasize it differently so it sounds better to the voters on their side) or because they will never do some of the things they say.

Iraq - Obama can blow smoke all he wants but no moron would pull troops out of there if there is still instability. BOTH candidates will end up taking the troops out when the generals on the ground there say enough already, we're done, let's get out. Do it even a day before that and you run the risk of having the next terrorist attack blamed on you. At least if you wait until the generals say it's over, then you have that to cover you if something does happen. Obama likes to emphasize I'll bring them home ASAP, McCain likes to emphasize the responsible thing to do is stabilize the situation first - those both mean the same thing, it's not "Possible" to bring them home any sooner than they get it stabilized.

Afghanistan - Obama likes to emphasize, that's where the front is, drop Iraq fast and send the troops there now. McCain likes to emphasize, no finish Iraq first and only then do you increase forces in Afghanistan and clean that mess up. Again, both mean the same thing.

Energy - Neither one of them is an oil-company sellout or a dumbass so they will both promote alternative energy sources. Obama says we have to focus on the alternative energy and sure we can do drilling along side that but the focus is the alternative energy. McCain says the drilling is super important but of course that's only a stop-gap (or whatever that stupid catchphrase is that they use for it) and then we will do the alternative energy thing too. Again, both the same thing.

Economy - Both have mentioned some form of tax cut, Obama focused on the average person and McCain, trying to pawn off trickle down crap-onomics as a valid theory yet again, focused on the wealthy and corporations. Neither of them will EVER be able to lower taxes with the crap hole we are in now with this trillion dollar bailout which will end up being closer to about 2 trillion by the time you factor in what they already spent on Bear Sterns and AIG and whatever else ends up going wrong. So, a tax cut is out on either side.

Wait, that reminds me of the other reason I am against Obama. He has also suggested RAISING some taxes. Granted, he says only on the rich but I imagine the increase in capital gains taxes will effect everyone regardless what he says - politicians are often wrong about these things; the Alternative Minimum Tax was only supposed to effect the rich too - all it did was make things worse for the middle class and the rich still get away with deducting 90% of their income so it is not taxable. So with McCain, taxes stay the same, but with Obama he raises capital gains taxes and other things so that's in favor of McCain too. Raising capital gains taxes, historically, ends up in less investment activity (which might be good at this point frankly) and less revenue generated so that's a bad idea.

I think he's also talked about reversing Bush's reduction in estate taxes - that's another bad idea. That really does end up having a terrible effect on people who are cash poor and farm-land rich because they frequently have to sell off parts of the land just to pay the estate tax. And honestly, it was way too high before. The schedule goes up to nearly 50% after a few million dollars. No matter how much money you have, that's basically confiscating your property upon death and is ridiculous.

Health Care - I think independent analysts have said they think both will be beneficial and will give more people more choices at a lower price than we have now. BUT, Obama wants to have anyone who wants to use it, be able to sign up for the "same insurance we have as members of Congress" and have a large portion of the actual price paid for by the feds. He says it will cost $800B or something and that it will be paid for by the increase in taxes on the rich. Yeah, and FDR said SS would pay for itself and now look where we are. It will cost at least twice what he says (probably closer to 5 times as much) because they always conveniently forget to factor in the human reaction. "What? I can keep my company's plan of crap that doesn't cover anything and costs me more, or I can take a govt. subsidized one that costs less and covers more? Gee, I'm torn and confused. What shall I do?" And suddenly around 75% of the people in the country are on it and it strangles the federal budget like SS is doing. McCain's plan just lowers the cost of health care plan by opening up the market so you can buy insurance on an open market and puts insurance companies in competition with each other. Frankly, that's what I've been thinking they need to do for years. Right now, the party who chooses the plan (the company) is not the party who actually uses the plan (the worker). So the company's incentive is to pick the one cheapest for them even if it doesn't cover anything because the worker doesn't have a choice, won't just jump from your company to another to get a better plan (and another company won't have a better plan), and if the worker gets sick, this is America and we can always find someone else to take their place. That creates a market where insurance companies have a financial incentive to offer cut-rate, no-coverage insurance plans because the one that will cost the company the least is the one that will get picked. McCain's plan will treat health insurance like car insurance is now. There are constantly commercials for GEICO, All-state, and Progressive saying "we offer more and cost less, buy our plan!" Under McCain's plan, health insurance would be a lot like that I imagine. Free market competition will lower prices, increase quality, and increase the number of people who can afford health insurance.

Regulation - After this crapfest both of them will push more regulation and more transparency and the Congress will pass it unanimously because everyone hates it whether they are blue voters or red voters and, after all, a politician's only real job is to get re-elected. So that's the same too.

Bailout - Looking at McCain's Homeowner's Resurgence Plan that Obama keeps saying is crazy and will cost the taxpayer even more money... it actually makes more sense than not doing anything.

Simply put, Paulson buys all this MBS and CDS crap with some sort of fantasy idea in his head that inserting a big buyer into the market will suddenly make crap smell like roses and raise the price. Frankly, there isn't a high demand for crap so even if you raise the demand by buying it all up, it is still crap and is still worth nothing because it is based on underlying mortgages that will continue to default at an ever-increasing rate. You might as well flush the $700B down the toilet - it's all lost.

The way to stop that is what McCain's plan is about but I don't think he articulates it very well so it's easy to make fun of. His plan works like this:

1 - Restructure the mortgages in order to stop defaults. Sure there is a cost upfront because of the decrease in principal but that can be fixed.

2 - No more defaults means no more flooding the market with 100 houses offered for every 1 buyer looking. That drives ALL house prices up - the ones you restructured, the ones that banks own already and are trying to resell, the ones people are trying to sell because they are relocating, and the ones people are trying to sell to avoid default.

3 - Rising house prices combined with no defaults results in those MBS manure piles sprouting rosebushes and being worth something. Now you can resell them at a profit like Paulson was suggesting. That gets the taxpayer their $700B back PLUS a profit. That profit would make back a lot of the lost principal in restructuring the mortgages.

I think there is one way he could dramatically improve the plan. Instead of forgiving the difference between the original loan and the lower FMV, structure the loans to be longer than 30 years. It would work like this. Say a house has a $400K loan on it and it is now worth only $300K. Calculate how large a payment would be on a $300K loan over 30 years with a regular fixed interest rate. Now, that's the homeowner's PAYMENT amount per month. Then calculate how much longer the loan would have to be to pay off the full $400K (in this case 40 years - I think the ratio would stay the same, right?) and that is the TERM of the mortgage. Now, you still have a lien on the house for the full $400K and you get it all back if the person moves within 40 years, but you still have made the loan affordable for these poor dupes who got talked into loans with the line, "Don't worry, just restructure the loan before it explodes in your face. Your house will be worth way more by then anyway! Now, sign here, sucker." That way, the $300B he uses to buy up the houses is secured by a lien for the full amount of the loan. AND, since house prices will go up when defaults are stopped, you have more of a chance of having the house value go above the loan amount and make it more feasible for the homeowner to sell it eventually. PLUS, his plan will collect interest on the $300B in mortgages bought up, so that's another bonus for the taxpayer.

Abortion - People are stupid. I don't know why this ploy still works as a campaign issue when the fact is that the President doesn't have a whole lot to say about this, other than the rare occasion when he gets to appoint another justice to the Supreme Court. This is a matter of law. Either you interpret the Constitution to impliedly cover this, or you don't. The President can't do more than put someone on the court - unfortunately, their position on this one issue is the biggest deciding factor and most people pay no attention to whether that justice properly analyzes issues and comes up with decisions in a logical manner. Besides, try to think up a scenario where someone would actually have the standing to even bring an abortion case into court. Yeah, I can't think of one either. Also, suppose they overturn Roe v. Wade - all that means is each state can individually decide if they want to outlaw abortion. California, Massachusetts, Connecticut, Vermont, New York... all states that will NEVER outlaw abortion because they are so blue. And if you live in a red state and want to get an abortion, the worst case scenario is you need to pay to get to a blue state, have the procedure, and go back home.

On the other hand, I do feel a person's position on abortion shows what that person values. I suppose there is a reasonable argument for abortion in usual cases and early on in the gestation period, but put that aside for a minute. Partial-birth abortion may be the most barbaric thing I've ever heard of. Just in case you don't know precisely how grotesque the procedure is, here's a summary.

1 - The doctor uses an ultrasound to get a visual image of the fetus - which is developed, at this point, to where it has fully recognizable body features.
2 - The doctor inserts forceps and fishes around to grab a leg of the fetus. Yes, it already has legs, arms, and even fingers and toes.
3 - The fetus is pulled out backwards except for the head. I don't understand why they can't remove the head before they do this next step - maybe the head is too big at its full size to pass through the cervix since it won't be as dilated as it would in labor.
4 - The doctor takes scissors, stabs the fetus in the back of the head, and spreads wide the hole. I actually get really freaked out thinking about this whole thing.
5 - The doctor then puts a suction catheter into the hole he has just stabbed in the baby's head and sucks out the brain. At this point the soft skull collapses on itself like a deflated basketball.
6 - The doctor pulls the baby the rest of the way out and throws it in the trash.

That is so horrific and vile that I can't imagine a doctor could do that without getting physically ill. Obama has voted against the bill to ban that procedure. To me, that's just so insanely selfish and brutal that I can't respect a person who supports it - that is horribly poor judgment no matter how smart he is. And, yes, he is very intelligent. I don't think women should have a choice to do this so late in a pregnancy just because - after 3 or 4 months of being pregnant - she now just doesn't feel like having a baby anymore.

Even a person with no friends, relatives, or associates is protected against murder, right? You can't go up to a lone homeless person and kill them just because no one will miss him. Why? Because, members of our society are protected. We decided that if you are a member of our society, we will use the law to protect your right to continue to live and will punish people who take that right away to deter them from trying to do it in the first place. Now the question just becomes, at what point do you consider a fetus to be a member of society that deserves individual protection? Even protection from his mother - after all, a relative can't just kill you because they are the only one in your life.

I would say anyone with any decency would AT LEAST say that point comes before a fetus has developed to the point of having arms, legs, a head, fingers, and toes. I just don't understand this position at all. Not quite the moderate he pretends to be during the election, is he?

Miscellaneous - This doesn't fall under any particular issue but it is a general difference in their philosophies in how they will approach problems in general, so it's important. I've done a lot to try to figure out who they really are - liberal, centrist, or conservative.

McCain has been in the Senate for 26 years so, we've had a long time to see who he really is. He's always been a centrist. He's always had the guts to tell his party to, "go screw," as you put it, when he thought what they were doing was wrong. The best example of this I can think of at the moment is his effort with campaign finance reform so that elected officials aren't purchased by their biggest donor and then spend their whole term working for that donor. Sure, the last few months he has been pretending to be super conservative but I think that's just to get elected. The 26 years is definitely more persuasive to me than the few months of running for office. As cheesy as it is, and as sick I am of hearing it so often, he really is a Maverick.

Obama has been in the Senate for about 30 minutes or so, so we haven't had much chance to see who he really is. But let's see what we know so far.

1- He DID vote against funding the troops - here's why that isn't a total crock... the bill with the withdrawal deadlines had already been vetoed by Bush, that was no longer an option so it wasn't just picking one instead of the other. The second one was the one without a withdrawal deadline. 37 Democratic Senators voted for it because it was the only way to get funds to the troops since the "withdrawal deadline bill" was already vetoed and they only had 4 days left before funding expired. Only 10 Democratic Senators voted against it. One of them was Obama.

2- He voted against extending the decrease in Estate tax. I've already mentioned why I think that's a bad idea.

3- As I already mentioned, he voted against banning partial birth abortion. That's not only wrong, it is uncivilized.

4- He voted against creating a free trade zone with 5 Central American countries. As you've said, trade barriers are bad for the economy.

5- Overall, he has voted with his party 96% of the time - if you only include the times when he actually voted. That high a percentage pretty much makes him the Democrat poster boy. If he is in office with a Democrat-dominated Congress, they will go so far left it will be about as frightening as how far right Bush went when he had the Congress on his side.

He's far left and has shown on several occasions that he is all for having government pay for everything. And he seems to indicate that the rich should pay for all of those increased expenditures. I agree, taxes on the rich should be higher than on others. A graduated income tax does make sense and it is fair. But to have them pay for ALL these socialist programs is a bit much to ask. Aside from the fact that history has shown that Democrats love to say that their socialist programs are well within the federal budget and will be paid for, but reality shows that they are always wrong and it always costs several times more than they say. Our next huge federal crisis will be the day SS bankrupts the federal budget.

But as you said, I don’t know if it makes a bit of difference at this point who wins because the system is already so screwed up. It seems the only way it will get better is the way it has happened throughout history. Eventually, great societies have always found a way to destroy themselves and completely collapse. Then they are replaced out of necessity. It shouldn’t be long now.