Why I dislike Obama's policies...

Obama's "stimulus" agenda fails utterly, but not because it follows the New Deal paradigm, as many pundits suggest.

Obama (and Bush Jr., too) has taken tomorrow's earnings out of the pockets of the working American and poured it into HUGE, failing corporate beasts like AIG, Goldman-Sacks, GM, Chrysler, Washington Mutual, the mortgage giants Fannie Mae and Freddie Mac, and Bear Stearns. All that did (again, in my opinion) was prop up a failing industry that had promoted a bubble-market with unsustainable loans and mortgages or the mismanagement of corporate funds (as in the case of the auto industry). Had, for example, the giants Freddie Mac and Fannie Mae been allowed to fail utterly, we'd have seen one out of every 12 mortgages in this country fail, meaning that the mortgages would be sold at a loss to anyone willing to buy them for pennies on the dollar. Since most banks and lenders don't want houses, they want money... the most likely buyers of these mortgages would be the people living in them now, who would refinance at either a lower rate or at the actual value of the home (as opposed to the actual value of the loan... something that does not necessarily equate to the same thing). The banks and lenders would have lost as much as 45% of their investments in the adjustment, but they would still have people in the houses paying something rather than nothing.

How do I know this to be the case? Because it happened before, when the lenders and banks of the 1930s saw nearly 50% of ALL mortgages fail. People still stayed in their homes or on their farms (at least the majority of them did)... but the terms of their loans and the amounts they owed had to be adjusted to reflect the new reality of actual value versus estimated value. The banks and lenders must have realized that something was better than nothing, and there was no one lining up to buy foreclosed housing and farms in the 1930s anyway.

In 2004 (the latest figures I could find) there were 131 million tax returns filed in the US. That means that each of those taxpayers could have received a "rebate" of more than $6,000 had the $787 billion simply been divided amongst the American taxpayers (more, if those filing exempt didn't get any money... but that is another story). Does anyone think THAT money would have given immediate and measurable results to the economic prospects of the country? What if the "rebate" were only for principle reduction on high-interest home loans? Now we see the means by which thousands of American families can stay in their homes AND reduce their monthly nut by as much as 6% over the course of their mortgage. Show the Fed you have an out-of-control mortgage or a sky-high interest rate, and the IRS mails you a $6k check. All through a pretty fundamental tax "rebate" (which isn't the same as a tax reduction, I know... and maybe isn't as good, either... but I think it would be more immediate in its effect).

That's not what FDR did, and its not what Obama did... and I'm not sure its what I'd do (I'm shooting from the cuff here), but I think it demonstrates that the efforts of the Obama White House have been short-sighted, and are more likely to increase Federal intervention in the private sector than it is to stimulate the economy. I've never understood Obama and Pelosi's disdain for "Big Business", while they bail out the biggest of them as "too big to fail"... what sense is there in that? When a giant tree falls over dead, lots of little ones pop up to takes its place in the sun... wouldn't that be better for the "environment" than propping up a dead tree that does nothing but soak up resources that the new little trees need?

(Sorry for the "green" analogy... it just seemed to work)