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Would The Democrats Tank Our Economy?

We have noted for some time that it is all too believable that the Democrats helped to precipitate our current financial crisis for political gain.

After all, once it was clear that the surge in Iraq was working and that the war there would not be a good campaign issue for them, they began to talk down the economy.

And of course their minions in the media everywhere followed suit.

It was bruited across every newspaper and television news program for months that we were in a deep recession. Even though the actual GDP showed no such thing.

In the interim, energy prices mysteriously rose to an historic high. And Congressional Democrats made it clear that they would do nothing to help roll them back.

On the contrary, they stiffened their resolve against more drilling and other viable alternatives – and suggested piling on further taxes. All of which only served to drive up prices further.

Then, around the time Mr. McCain pulled ahead in the national polls, top Democrats started a run on a bank (IndyMac, a bridge bank to Fanny Mae and Freddie Mac) and undermined a major insurance company (AIG, a major insurer for the financial markets).

With investor confidence now severely eroded, the stock market took an historic dive – giving us unprecedented bad economic news in the weeks just prior to the November elections.

Meanwhile, the bailouts the Democrats have pushed through have done little but ballooned the national debt and exacerbated the problem.

It is all just a little too convenient.

There certainly would be no risk for the Democrats to try such a thing. Our media would never hold them accountable. Indeed, thus far they have (falsely) blamed the mortgage crisis and everything else on the Republicans.

On the other hand, the benefits from a manufactured economic crisis for the Democrats are manifold.

So far it has:

Taken the focus off the US victory in Iraq and the war against terrorism in general.

Gotten Barack Obama and more Democrats elected. Whereas they were lagging in the polls before this crisis.

Gotten investment money out of the capitalist system (stock market) and into to the government (Treasury bonds).

Made more people dependent on government, through unemployment insurance and other ‘safety net’ programs.

Moreover, the economic crisis will in the immediate future:

Provide an opportunity to ram through their socialist agenda under the cover of an emergency. (Just like what happened for FDR.)

Be used as an excuse to expand the social welfare programs.

Provide an excuse to create government make work projects that further socialist and environmentalist “social justice” goals and make more people dependent on a government paycheck.

Be used as an excuse to cut the military and other national security programs. We will be told we can’t afford to continue the war against terrorism.

Help the environment. (Mr. Clinton even said that we needed to slow down the economy to defeat global warming.)

In the longer run all of this additional government spending and government make work projects and environmental safeguards and income redistribution will probably damage the economy so thoroughly that the crisis will be prolonged.

If so, more and larger government programs will be required, and more socialist policies will be enacted – never to be undone.

We really could be on the brink of reliving the glorious 1930s all over again.

What is worse, we know that is really what the Democrats want. The Great Depression, after all, was their heyday. And it was truly the start of the new Democrat Party — the party of unapologetic socialism.

We also know that it is exactly what Barack Obama has dreamt about for years. He told us so in his book, “The Audacity Of Hope – Thoughts On Reclaiming The American Dream.”

For Mr. Obama the American dream is a second bill of rights, a new New Deal.

What’s more Mr. Obama even suggested that it would take an economic crisis like what President Roosevelt faced to make all this possible.

So is it really all that far-fetched that the Democrats would have helped it along?

What did they have to lose?

This article was posted by Steve on Sunday, January 4th, 2009. Comments are currently closed.

20 Responses to “Would The Democrats Tank Our Economy?”

  1. proreason says:

    This is from December, but still highly relevant:

    Credit crunch? What credit crunch?

    PARIS (Reuters) – The credit crunch is not nearly as severe as the U.S. authorities appear to believe and public data actually suggest world credit markets are functioning remarkably well, a report released on Thursday says.

    As a result, governments are pumping masses of public money into the economy across the world because of the difficulties of a few big, vocal banks and industries such as car manufacturing, which would be in difficulty anyway, according to the report published by Celent, a financial services consultancy.

    “It’s just stabbing in the dark with trillions of dollars,” Octavio Marenzi, report author and head of Celent, told Reuters in a telephone interview where he questioned the depth of the analysis that preceded numerous fiscal stimulus packages.

    The report, much of which is based on U.S. Federal Reserve data, challenges a long list of assumptions one by one, arguing that there is indeed a financial crisis but that, on aggregate, the problems of a few are by no means those of the many when it comes to obtaining credit.

    “It is startling that many of (Federal Reserve) Chairman (Ben) Bernanke and (Treasury) Secretary (Henry) Paulson’s remarks are not supported or are flatly contradicted by the data provided by the very organizations they lead,” said the report.

    ALL A MYTH?

    Regarding U.S. business access to credit, the report says:

    *Overall U.S. bank lending is at its highest level ever and has grown during the current financial crisies.

    *U.S. commercial bank lending is at record highs and growing particularly fast since May 2007.


    All of which drove the Celent report to conclude that the U.S. and other governments may be throwing good money after bad for want of a better idea of what is really happening.

    “Just like a doctor contemplating an obviously sick and suffering patient, a massive surgical intervention based on a misdiagnosis can only worsen the patient’s condition.”

    http://www.reuters.com/article/email/idUSTRE4BA47420081211?pageNumber=1&virtualBrandChannel=0/blockquote>

    I would only add this…….Isn’t it an amazing coincidence that Dubya’s 2 big-time Lib financial advisors (Paulsen and Bernake), rushed into his office to tell him the sky was falling immediately after McCain took the lead in the Gallup poll.

    This report a month later seems to believe the sky was not falling.

    But it doesn’t matter now. Obamy was elected.

    Unless you, like many, lost hundreds of thousands of dollars because of it, or are unemployed, or concerned about your home being worth 30% less than it should be, or have realized that each taxpayer in the country is now committed to about $50,000 in bail-out money so far, or are concerned about unemployment heading toward 10%, or are worried about the reports that the economic downturn could last another year or longer, or have become aware that you will have to work another 5 to 10 years to build a secure retirement, or have had your hopes for a secure retirement shattered. If one of those is true, maybe it does matter to you.

  2. MsDollie says:

    I would not put it past the Democratic Leadership to “want” to cause financial uncertainty, but … I think they are too inept to be successful.

    My money (if I had any left) would be on George Soros.

    • Steve says:

      “My money (if I had any left) would be on George Soros.”

      Isn’t that a distinction without a difference? Mr. Soros owns the Democrat Party.

      That he was centrally involved should go without saying. — Heck, it was probably his idea.

    • Helena says:

      I don’t know that there’s much difference between Soros and the DNC leadership. He bankrolls them. He said publicly that he would spend whatever it took to take down George Bush (he failed, but it probably only made him try harder this go round), and he has put a huge amount of his own money into DNC campaigns and front organizations. He is also in a perfect position to manipulate money markets, since that’s where he lives.

  3. Liberals Demise says:

    Is a frogs butt water tight?

  4. Steve says:

    As if to prove my point, here is an article from today’s New York Timest:

    Obama Considers Major Expansion in Aid to Jobless

    By JACKIE CALMES and CARL HULSE
    Published: January 3, 2009

    CHICAGO — President-elect Barack Obama and Congressional Democrats are considering major expansions of government-assisted health care insurance and unemployment compensation as they begin intensive work this week on a two-year economic recovery package.One proposal, as described by Democratic advisers, would extend unemployment compensation to part-time workers, an idea that Congressional Republicans have blocked in the past.

    Other policy changes would subsidize employers’ expenses for temporarily continuing health insurance coverage to laid-off and retired workers and their dependents, as mandated under a 22-year-old federal law known as Cobra, and allow workers who lose jobs that did not come with insurance benefits to be eligible, for the first time, to apply for Medicaid coverage.

    The proposals indicate the sorts of potentially long-range changes that Mr. Obama intends to push in his promised American Recovery and Reinvestment Plan, as he named it in his weekly Saturday address on the radio and YouTube. They will be combined with one-time measures that are more typical of federal stimulus packages to jump-start a weak economy, like spending for roads and other job-creating public works projects…

    http://tinyurl.com/7nucua

  5. proreason says:

    There are many interesting anamolies about the two months prior to the election.

    Did you know that the volume on the Dow jumped 60% the day after McCain took the lead in the polls. Why do you think that might be? Were investors dumping stocks because it looked like the more pro-business candidate would be elected?

    The Dow loss in Sept and Oct of an election year is by far the greatest in history, including the Great Depression. Pretty strange, considering GNP growth was 3% in Q2 of 2008, unemployment was below normal, and corporate earnings were strong. Think about it. The Great Depression…..25% unemployment, Dust Bowl, mass migration to California, tent cities, bread lines. Yet, the market took bigger losses this year than even then. Where are our bread lines?

    Trading was extremely strange in those 2 months. Many days were up until the last 1/2 hour of trading, and then there would be catastropic losses in a matter of minutes. It’s almost as if the market didn’t want any good news to leak out.

    And don’t forget the jaw-dropping decline in gasoline prices in September and October. Totally unprecedented. But then, the biggest issue in McCain’s favor was high gas prices, wasn’t it? That’s a key reason he named Palin as VP.

    And have you wondered how a 100-year economic crisis happened in the course of a few days? I mean, the sub-prime mess had been known since the prior October. Barney Franks declared Fannie Mae was a great investment in June 2008. Nobody on Wall Street was jumping off any ledges. Do you know anybody who was refused a loan? Personally, I obtained 2 car loans in 2008. I refinanced my mortgage in late 2007. Yet, Henry Paulsen suddenly declared a historic emergency in mid-September, 2008. He is the Treasury Secretary. Isn’t he supposed to be monitoring that financel system? How could we go from things are ok to a 3-alarm emergency in 2 weeks, coincidentally, the 2 weeks after McCain took the lead in the polls.

    But then the article in this post disputes that there was an emergency, doesn’t it?

    Maybe Henry had another agenda.

    Gee, I wonder who the life-long Democrat voted for.

    • proreason says:

      As an update to the volume tidbit, if you consider the modern era to be 1948 forward, the volume increase in September 2008 over the prior month was greater than all months except Jan 1976, and Sept 2001. So, the volume anomoly was only topped twice in 720 instances. The odds against such an event would be 240 to 1, so it was a one in two decades event. (Note: if it were done for the 4 weeks immediately after McCain took the lead, the odds against the event would be 360 to 1).

      If you consider the 1930’s and the war years through 1946, the monthly increase in volume was topped 17 times (out of 965 months of history available on Yahoo). That would make it a once every 5 year event, including those highly unusual years. The odds would be 57 to 1.

      The increase in volume was a VERY RARE happening,

      And on Aug 17, 2008, from Obamy’s own lips:

      “A confident Barack Obama raised an extraordinary $7.8 million Sunday at three California fundraisers, most of it in large checks to a Democratic Party committee.

      “I will win. Don’t worry about that,” he said to the crowd of about 1,300 at his third event of the evening, according to the pool report.”

      I guess he knew something the rest of us didn’t know. At that point, he had a 1 point lead in the Gallup poll of registered voters.

    • CGardner says:

      One of the strangest episodes in the market meltdown came during Aug./Sept., when there was apparent manipulation of the stock prices in the major investment firms. Morgan Stanley’s decline was interesting, since they’d just sold large chunks of the company to the China and Japan and thought they were fairly stable.

      People started blaming “short selling,” and Andrew Cuomo promised to investigate in late August. Then, in late September, he said he was “expanding” his investigation.

      http://cbs5.com/national/wall.street.probe.2.820539.html

      Since the September announcement, Cuomo has said nothing.

    • proreason says:

      this comment moved below to respond to Guppy

  6. GuppyNblue says:

    “What did they have to lose?”

    Not only is it a political power grab but they have been making themselves a few dollars on the way.

    “Then, around the time Mr. McCain pulled ahead in the national polls, top Democrats started a run on a bank (IndyMac, a bridge bank to Fanny Mae and Freddie Mac) and undermined a major insurance company (AIG, a major insurer for the financial markets).”

    It was a technicality they used to take down AIG. They had plenty of assets in real estate but couldn’t report it as such since the properties weren’t selling at that time.

    As far as IndyMac goes, there’s some interesting news out. IndyMac is being bought by a group of investers that ” include five private equity firms or hedge funds: J.C. Flowers & Co.; Stone Point Capital; Paulson & Co.; a fund controlled by billionaire George Soros’ Fund Management; and a fund controlled by Silar Advisors LP.”

    Both Soros and Paulson made billions (Paulson actually made history with his $15 billion take) shorting the subprime market. Remember this S&L posting.

    The Washington Times reported this today but they simply state that IndyMac “was seized by the government in July after a run on the bank as the real estate bubble collapsed.” No mention of Sen. Schumer leaking to the public a negative report about IndyMac’s viability. He knew damn well that the leak would cause a run and did it anyway. That’s intentional.

    Another news item today worth noting (and investigating IMO). “Mary Schapiro is set to be named head of the Securities and Exchange Commission (SEC) today – is currently chief executive of the Financial Industry Regulatory Authority (Finra).”

    “In 2001, she employed Mark Madoff to serve on the board of the National Adjudicatory Council – the division which reviews disciplinary decisions made by Finra, according to the Times.”

    They tell us that Bernard Madoff’s Ponzi scheme has been going on since the 1970’s without being exposed. Isn’t it no wonder when he had someone on the inside with regulators like Schapiro?

  7. proreason says:

    very interesting point about IndyMac. Thanks for the additional information.

    Donn Luskin, a well-known conservative/libertarian Wall Street guru who appears regularly on Larry Kudlow’s show, says that Henry Paulsen caused a good bit of the financial turmoil in the fall because he screwed up the early interventions. He also says that Paulsen now has his act together, which is why the markets have stabalized.

    But the Paulsen and co mentioned is probably not Henry’s company. There is another Paulsen who is apparently unconnected with King Henry. He hade even more money in 2008 shorting the market than Soros. It would be interesting to hear what his politics are.

    Even so, the Soros connection is striking and additional evidence that something very very strange was going on.

    • GuppyNblue says:

      Yes, it’s hedge fund manager John Paulson in this case. He and Soros had a meeting in which he explained how the scheme worked.

      IMO the whole hedge fund market (which Chelsea Clinton is now a part of) and the practice of shorting is suspect. But what’s clear is that people like Soros pushed subprime lending and while it ended up compromising our economic future, they are profiting nicely. I won’t dismiss this as stupidity on their part. They knew exactly what they were doing.

    • proreason says:

      Soros is well-known for almost bringing the Bank of England down in 1992.

      That is probably when he got the idea he could impact politics with his schemes.

      As I’ve said before, no small group of individuals can manipulate the stock market, but they can bring down individual companies, and if they can get the momentum going strongly enough, perhaps influence the entire market.

      That’s what I think happened in 2008.

      They were shorting financial services companies throughout the year, both to make money, but more importantly to cast gloom on the 40% of the country who invest through 401K’s. The market fell 20% from Oct 2007 until the summer, even though the economy was relatively normal. Then they went after IndyMac (with Schummer’s help), and other financial institutions.

      Even though they made billions, it wasn’t enough to tank the market. The economy and market withstood the assaults through July. But when McCain grabbed the lead immediately after the conventions, it was too much for Soros and Company to tolerate. The next Monday, volume shot up 50% (and went even higher in the next two months). By the next Friday, Lehman Bros was toast (I would love to see data about Soros’ involvement, or even just the trading action). The government stepped in that weekend, Lehman went bankrupt, and the rest is history. The activity for the next 7 weeks was probably partially driven by Soros, but by that point, the lurching government mis-actions ochestrated by King Henry, were enough to get other opportunists involved and the whole thing got dangerously out of hand.

      The reason nobody is talking about it is a good question to ask. The answer for the media is obvious. They were ecstatic, and will never investigate it. But why isn’t Wall Street speaking up about the once-in-two-lifetimes events? The reason, I think, is that Wall Street needs confidence to be restored in the markets to make money for themseleves. If somebody were to begin asking questions like these, a swarm of Wall Street people would descend like a hive of locusts and chew up the naysayer. And since they have access to the detailed data, they have a great advantage to prove any case they want to prove. They other party who might have an interest is the government (and there is a low-key SEC investigation in progress), but the Obamy cabal will quickly put a stop to anything that comes out from government action.

      If word does begin to spread that something extremely unusual was going on, the media will portray the people talking about it as lunatic conspriacy theorists.

    • Steve says:

      “The reason nobody is talking about it is a good question to ask. The answer for the media is obvious. They were ecstatic, and will never investigate it. But why isn’t Wall Street speaking up about the once-in-two-lifetimes events? The reason, I think, is that Wall Street needs confidence to be restored in the markets to make money for themseleves. If somebody were to begin asking questions like these, a swarm of Wall Street people would descend like a hive of locusts and chew up the naysayer.”

      Excellent point, PR.

    • BillK says:

      Rise or fall, isn’t Wall Street making money given brokers charge a commission on trades?

      Even if everyone is selling every stock they own, there’s that per-trade spiff…

    • proreason says:

      BillK, Wall street loses if people don’t trade. But that’s chump change. Trading volume is actually pretty strong anyway.

      What they really want is to get the Capital Markets businesse revved up again (mergers/acquisitions, new bonds, new derivative propduct, initial public offerings, new stock issues for existing companies, Hedge Funds, etc.). That’s where the big money is, and that space is comotose until public confidence is restored.

      Income on wall street is probably down 50% or more right now. We would probably hear more about it, but like them not debating publicly what really happened, talking about the disaster they are experiencing would only shake public confidence. We do hear about the layoffs, but that’s about it.

      I did notice today an AP article that headlined “Is the worst already priced into the market”. That’s the Obamy tingly leg shills pushing to trick the suckers into jumping back in so they can trumpet a miracle. A lot of Wall Street pros think it can get a lot worse than it is now. Of course, nobody really knows….but we do know what happened in the 30’s with the kind of government interventions Barakenstein is about to foist on his marks.

      Can’t wait for those windmills to kick start the economy!!!

  8. GuppyNblue says:

    One thing to remember is that Soros trades currency – not stocks.

    What gets lost in all this argument is that we just printed a lot of money and once that gets into the economy it means inflation. No way around that and all the drones that thought money grows on trees will be the first to b*tch about how the mighty dollar has fallen.

  9. proreason says:

    From the NRO video interview with John Taylor Jan 5 2008 about the economic crisis:

    “a crisis that was was caused, prolonged, and made more severe by government policies” (note: last 10 seconds of the interview.

    About John Taylor

    Dr. John Taylor holds degrees in economics from Princeton and Stanford. He served as a staff economist on the Council of Economic Advisors under President Ford and as a member of the CEA under President George H.W. Bush. He also served as the undersecretary of the Treasury for international affairs during the first term of President George W. Bush. He is the author of numerous books, including Global Financial Warriors: The Untold Story of International Finance in the post-9/11 World.


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