Wednesday, October 8, 2008

An Open Letter

Dear Mr. McCain, Mr. Obama, and President Bush,'s definition of the term socialism is this:

Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.

Socialism is the slanted ground between capitalism and communism.

To see the end results of socialism, please visit China, North Korea, Cuba, or the debris that is now Russia.

The fact that you assume I, as a middle class American, am too panicked by the constant media frenzy over a potential economic meltdown to understand a sweeping piece of socialism when I see one is insulting.

The economy is in trouble because banks speculated too much and gave loans to anyone with a paycheck and a pulse. Since I bank at an FDIC insured institution and have less than the $100,000 insurable limit in my account, their crisis is not mine.

The economy has slowed down because a) recession happens and b) bankers were idiots and tied up all their profit in bad debt.

I understand this. I realize we need to pull together to create jobs and liquidity in the financial industry. I also realize that it is not the government's job to hold the hand of failing banks. I don't want the government owning a large chunk of our economy. I've seen how successful you've been with public education and social security. I sincerely do not want that "success" repeated with my money.

Mr. McCain, you voted for this ridiculous bailout. This 700 billion dollars of buying up bad debt with taxpayers' money. Now you say you want to allocate $300 billion of that to buying individual mortgages from people who are in trouble. Are you serious? Does ANYONE really want the government to own the home they live in? This is a serious escalation of the scope and role of the government and does little to help right the economy. You are simply responding to the outcry of those who think the government somehow owes them the bread they eat.

I encourage you to re-read your Constitution, bone up on the definition of capitalism, listen to economists rather than pollsters, and try again. A leader doesn't pander to the loudest group with band aids that don't fix anything. A leader assesses the facts and makes the best decision for the group, even if the decision is difficult. You're a war hero. You know that. You've just forgotten to apply it to politics.

Mr. Obama, you voted for this bailout too. And you were the first to suggest the government put its sticky fingers all over individual mortgages. You claim the way to help our economy is to raise taxes on the rich and call it their patriotic duty to pay more. This shows, at best, a serious lack of understanding of fundamental economics and at worst, a dangerous disregard for our Constitution (a disregard apparently shared by a majority in Congress). Those who make over $200,000 a year already pay the vast majority of taxes, most of it going for services they'll never use. We have a system where 20% of the people shoulder over 90% of the tax burden. Before you pat me on the shoulder and tell me that the middle class deserve a break, allow me to do my own calculations. The tax code limits the middle class to paying 15% of their income in taxes. I consistently pay 4%, and that's without cheating or finding shady little loopholes.

I don't need a break, Mr. Obama, and I don't believe you plan to give me one. Over-taxing the very people who have the capital to create jobs cripples the economy. Stop trying so hard for my vote and look at logic instead. Taking from the rich because those who don't have as much are clamoring for more is the anti-thesis of capitalism. It's socialism. Besides, you've repeatedly voted to raise taxes on the middle class and the many promises you are making have to be funded somehow. I smell another tax hike in our future.

I encourage you to re-read your Constitution as well. There are rights listed therein. Many of what you promise to somehow fund for us as our rights aren't listed in the Constitution at all. If you believe in making those things rights, go about a Constitutional amendment and then we'll talk.

President Bush, shame on you for pandering to panic within the financial institutions. Get rid of capital gains tax to make investing more lucrative and enticing to those who have capital, and you instantly generate movement within the housing market. Listen to economists who have no election on the line and work on rates, tax breaks for businesses who keep jobs in the U.S., and increasing the FDIC insurable limit for account holders. Flushing 700 billion into bad debt is just plain stupid. If the debt was bad to begin with, buying it with taxpayer money doesn't suddenly make it good. This isn't a loan that will ever be paid back. This is an albatross around our necks.

I'm disgusted with the rampant disregard for our Constitution, for capitalism, and for good, plain common sense. I hope one of you, Mr. McCain and Mr. Obama, can pull your head out of your polls long enough to look up the definition of socialism and take a stand.


  1. The problem as I see it is that someone could have the most brilliant, foolproof solution to effectively and cheaply solve all the nation's problems, but the fools in the government would screw it up. At this point, I have absolutely no confidence in the government's ability to govern.

    We, the taxpayers, pay politicians a very generous salary to do the job we, the voters, elected them to do. Then the special interest groups pay them five times that. Where do you think their loyalties really lie? From my perspective, that's a blatant conflict of interest and shouldn't be allowed.

    Oh, and something that keeps getting lost in the staggering numbers that have been thrown around--Congress refused to pass the $700 billion bailout... until an additional $150 billion of pork was added to make it worth their while. Heck, the country's already $10 trillion in debt. A few more billion won't make a difference.

    As for the candidates having their heads up their... polls, unfortunately, you can't tell it like it is and win a popularity contest with the American public. It'll be a good 2 years into the new Prez's term before we see what effect he'll really have.

  2. I tend to let things like this go… but I question this way of thinking. This letter appears to be well-intended and I think represents how many folks think- but I am not sure that it actually has facts to support it. It seems to be driven out of a fear of socialism. Or perhaps fear is too strong a word, but some idea that socialism has no place in the American government. Which, is actually a party platform, Libertarian. But they are not a major party platform because it just cannot work. Pure capitalism and a free market society will actually, and perhaps ironically, end in the same result as pure socialism. This is not my opinion, but the general consensus of economists. The logic is simple. A pure socialistic society becomes oppressed by the all powerful government leader, and a purely capitalistic society becomes oppressed by monopolies. What makes America great, in my opinion, is the ability to waiver between the two. What we are going through now is not at all different from the late 1800s up through the Great Depression. I don’t have the exact numbers, but 90% of the country’s wealth lies in less than 5% of the people’s hands. I think that a lot of these people are good people, they give lots of money away- and not just for tax write-offs. I find it intriguing though, that so many rich people actually are not opposed to their taxes being raised. Perhaps one of the best capitalists in the world, Warren Buffet, is an advisor to Obama. Alternatively, there is this strange notion by the middle class that it is unfair to the rich people to carry the tax burden. One notion of fairness might be that if you have 90% of the money, you should cover 90% of the taxes? I mean do you really care if Bill Gates has to pay more taxes? He doesn’t! I read your blog about how you cannot afford to pay a $700 auto bill, and yet you are willing to forgo that tax break? I used to be a big fan of Reagan, back when I was at Pepperdine. Go America, kill the communists, red meat. I get that. But trickle down economics just does not work. Giving the money back to the middle class does. Call it redistribution of wealth, because that is what it is- but I don’t think it is fundamentally wrong. Just to add some fire to the argument, one can say that Jesus himself was an advocate of this- you know the whole camel in a pinhole story? Here is why the smart rich are not against raising their taxes- because they will end up making lots more money. How? If there are no more consumers (recession) then they lose money! Think about it- that $700 you are spending to fix your car. Some of it will go to folks like my dad, a mechanic, to do the work. He spends some of that at the toy store to buy his grandkids a toy. This is stimulating the economy. If the $700 sits in that bank account it does nothing for no one. How is the rich guy going to create new jobs if there is no one to use the services (because they have no money)?
    Ok, that was taxes- the bailout is a sad story, but one not new to America either. My mom lost her job at a bank in the 80s because she worked for a Savings and Loan. What happened there? De-regulation of the home loan market- home prices soared, they raised the interest rate to counter inflation, market dropped, folks couldn’t afford their homes. What was the result? The government bought the houses! So, this is not new. And, the government actually made money on the deal. What was the policy that was strengthened from that? The FDIC! So your comfort in the fact that your savings will not be wiped out- is actually a socialistic notion. So, it seems weird to argue against socialism for big companies knowing that socialism supports you? You comment that the politicians should listen to the economists and not the pollsters? Sadly, I think that the Republicans actually did the opposite when the bill initially failed. People buy into a romantic free market ideal, and the bail out bill is incredible unpopular. Yet, the very people that know the economy and how it functions were desperately seeking it to be passed. Why? Because if there is no liquidity in the market- the WORLD’S economy will fail. Like, great depression, soup line level of failure. So yeah, it blows, but that doesn’t mean it doesn’t have to be done.
    Finally, one should note that China is quickly becoming the most powerful country in the world- it has nothing to do with socialism- mostly to due with their economy being based in manufacturing and not finance (like ours). The examples you use as failures of socialist government, social security and schools… really? Failures? They are clearly imperfect, but can you imagine a society where everyone had to pay for an education? I know lots of people that went to public school their whole life- and they are pretty smart people. Can you imagine if these “socialistic” programs were not in place? Would there be any chance for the poor to be educated? The failure really only comes from the poor communities because they have poor funding for their schools. So the solution is what, no schools? Yowsers. And no social security? The “problem” with it is merely accounting. We steal from it to pay out other programs- Gore could have fixed it with his infamous “lockbox.” The image of it being a bad program, was primarily aiming to get American people to invest it into the stock market. Which is likely a good idea in the long run if you know how to manage money- but think about all those folks that were getting ready to retire this year. Their accounts might have been reduced by 50% in a week. I would consider that a greater failure. What we need now is a “New Deal.” That saved America before, and that “socialism” will be required to save it again. If you want to be a Republican because you are anti- abortion, anti- gay marriage, fine. But to be a Republican for fiscal policy only makes sense if you are making lots of money or are employed by someone that makes missiles (my mom did that after getting laid off from the bank). What was the result of the Reagan administration? A recession. The result of the Bush administration? A recession. Trickle down economics sounds good, but there is no evidence that it works. De-regulation sounds good, but it only results in corruption.
    Look, I like John McCain. He is a war hero. Someone able to make quick judgements from the gut is probably a great quality for a fighter pilot (Although I might point out that he got shot down). For a country, in this condition, with this much at stake. I think it is a much safer bet to consider a thoughtful orator that inspires hope (Reagan anyone?). Even if he is an Arab Muslim Terrorist scary Black man. ;)
    …and I was only going to write a short reply!
    (I apologize if this is read as an attack- more so just a comment on how I see the world. I am anti-abortion. I was a registered Republican. I love Ronald Reagan. But I just cannot embrace this party any longer.)


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