Is the Iraq War the Cause of Recession?

Sure, it’s an election year and the spin is getting faster as the manure we’re all standing in is getting deeper, but the latest stretch is really phenomenal.

Recently, we’ve all heard Democratic party leaders attribute the recession … or “economic slowdown”, depending on your orientation … to the war in Iraq.

Okay. So they say.

Now, why was I under the impression that the current financial crisis was just that … a financial crisis … created, not by the war in Iraq, but by the sub-prime mess and the collapse of the housing industry.

I’ve been watching financial news and financial channels for, literally, years … and hearing Nancy Pelosi just matter of factly say that the war in Iraq was the cause of the current recession (yes, I’ll call it that) just plain caught me off guard.

It’s been a while since she said it but as I remember listening to the Senate and House interrogations of General Petraus and Ambassador Crocker, the presumed correlation between the war in Iraq and our economic woes seemed to be a prominent and recurring theme among Democratic inquisitors.

I wondered if I was having a brain cramp or something. Was I and all of those economic experts I was listening to on CNBC and Bloomberg that much out of touch with economic realities? I’m the first to admit that I’m not an economic expert but, at least, some of those people ought to know what they’re talking about … people like Robert Reich, Warren Buffett, Boone Pickens, Ben Stein. I never heard any of them say that the pending or current economic crisis was caused by the war in Iraq.

I understand that San Francisco marches to its own drum. But, I didn’t realize that they are in an alternate world. Well … actually … it isn’t just San Francisco politicians. It’s Democratic politicians in general. Theirs does seem to be an alternate world or universe continually restructured to fit the talking point of the moment.

Maybe they’re spreading their coping ability too thin. They must feel that being opposed to the war in Iraq simply because it is isn’t sufficient reason to oppose it. They must feel that they have to steal the economic crisis from the cause that most learned peolple seem to attribute it to … the subprime mess and the housing market collapse. Go figure. Maybe they’re just getting confused. Now isn’t that a scary thought?

These people are supposed to be in Washington to solve the country’s problems and they can’t even get cause and effect correct.

Maybe they all “mispoke”.

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Obama Attacks “Politics of Fear”

Barack Obama is attacking Hillary Clinton’s latest ad in Pennsylvania briefly showing the image of Osama bin Laden referring to it as the “politics of fear”.

Well, I think fear is a overused word by the media and don’t feel most Americans are hiding in the closet afraid of Osama bin Laden or anything or anyone else, but I also think it’s pretty stupid to ignore history and not watch your back or keep vigilant guard against your enemies which includes destroying them when and wherever possible.

Obama’s notion that we should forget history unless it is convenient for his purposes is fairly simpleminded, but I’m finding that, for some reason, “simpleminded” seems to be very appealing in America these days.

For example, Barack wants us to remember that he opposed the war in Iraq in 2002 and 2003, but he wants us to forget 9/11 and somehow the image of Osama bin Laden still being out there is detrimental to his candidacy. I just don’t figure that … unless, in some way he has a problem dealing with Osama.

He wants us to be afraid, or fear, that John McCain is too old to be an effective president … yet he doesn’t turn down a photo op with Warren Buffett … a financial tycoon about McCain’s age. Warren Buffett is okay but John McCain isn’t. Go figure.

Barack just needs to make up his mind and get his message straight. Is that too much to ask of a Harvard trained lawyer?

Bush’s Upcoming Proposal to Overhaul Financial Regulation

Knology – News

Like John McCain, I’m no economist or financial expert. Neither are Barack Obama or Hillary Clinton. Both of the Democratic candidates are quick to point out John McCain’s statement that he doesn’t know much about the economy. McCain’s honesty is refreshing and should be lauded rather than ridiculed.

After spending several years of retirement watching CNBC and Bloomberg trying to figure out the best way to make investments, I’ve come to the conclusion that the so-called “experts” don’t really know that much about it either.

That’s not to say that economists with bachelor’s, master’s, and doctorate degrees don’t have a lot of knowledge regarding economic history and theory, but it’s also very apparent that there are as many opposing views about economics and the application of economic theory as there are political opinions. Everyone, well, almost everyone, has 20-20 hindsight. There are some out there that will still argue that the sky is green and not blue.

It almost humorous to watch CNBC (my current favorite) invite economists and financial experts with opposing views onto their various programs to “duke it out”. It’s sort of like, “If you get enough views expressed on your program, in all probability, one of them will be proven to be true … in a given circumstance.”

I’ve noticed also, if the market is down on a particular day, CNBC will get the nay sayers, the prophets of doom and gloom, to come on and say, “I told you so.” If the market is up or showing signs of improvement, they’ll get the preachers of “good times are here forever” on their shows to match the market sentiments. When the market is “iffy”, get ready for both and a string of heated arguments. Then there’s Cramer, Jim Cramer. This guy’s so influential that you can’t afford not to watch him. But, hold your breath. If he happens to trash that favorite stock you just purchased, get ready to watch it plummet to the bottom of the cesspool. If you’re really lucky, you’ve done your research ahead of him and his callers and are holding a stock that he mentions favorably on his show that everyone’s been ignoring. Then you can watch it climb astronomically in after hours trading as his listeners try to get the jump on the next morning’s trading. I think the only group that may be more fanatic are the followers of Warren Buffett’s portfolio. Simply look at Burlington Northern as the latest example of Buffett’s influence. Warren Buffett could buy stock in a company that packages dog poop for party favors and the stock would go up 20 points.

I manage several portfolios for my mother so I have the responsibility to her and my siblings of not loosing the family inheritance. It’s a formidable responsibility to try to maintain and enhance her fragile investments which are a significant part of the sum of her life’s work and savings.

I am old enough to remember the out of control economy of the Carter presidency with nearly 10% unemployment and interest rates passing 20%. I was in the unfavorable position of having to buy my second home at an interest rate of nearly 15% in 1983.

The facts above really make me wonder at the demagoguery of Democratic pundits complaining about the current 5% unemployment and the “high” interest rates running between six and seven per cent recently. You would think all of them were born yesterday. Or, more accurately, they’re treating the American public like we were born yesterday … with short attention spans and even shorter memories. I give my dog credit for a better memory than they seem to attribute to the American public.

The fact that so many people have been getting into trouble with minimal increases in interest rates on their adjustable rate home loans and the massive crisis this has caused in banking and investment institutions is a reflection of the lack of adequate oversight by the federal regulatory bodies who have been given that responsibility.

There are already laws on the books regarding proper lending practices and these have been completely ignored by the lending institutions and the federal agencies who have the responsibility to exercise that oversight. This is criminal and the justice department should have enough investigations and pending cases to keep it busy for a very, very, very long time. These should include not only corporate personnel but the bureaucratic bumpkins responsible for the oversight.

Adjustable rate mortgages are not new. I don’t know whether the subprime lending practices are new, but someone in a position of responsibility should have been diligent and alert … sensing that the real estate bubble wasn’t going to last forever and someone eventually would be left holding the bag … like a chain letter.

Anyone over forty years old should remember the real estate bubble that burst in the late 1970’s. That’s just not that long ago.

I can recall when, even in the rural community where I grew up in central Georgia, agricultural land appreciated to valuations ranging from $1200 to $3000 an acre. This was 50 miles from any urban centers. The land became practically too expensive to buy for farming. When the bubble burst, the land depreciated to a more realistic $200 to $300 an acre … and that was the best land. The current crisis was predictable.

Fortunately, I became very uneasy about what was going on in 2006, a full year before the meltdown began, and got my mother out of banking and financial stocks and resisted the temptation to jump into the blind elation that was rampant during 2007 which ran these stocks up before their sudden collapse.

I was no more prophetic in 2006 exercising caution with financial stocks than Barack Obama was in 2002 when he spoke out against a war in Iraq. There was one big difference in our actions, though. My actions were based on experience and his was based in ideology.

Barack Obama has already vaguely outlined a plan, or at least his desire, to increase the regulation of financial institutions. The Democrats may oppose the Bush recommendations simply to forestall President Bush from stealing their thunder. That, in itself, would be reprehensible since there is an immediate need to fill in any gaps which may exist in the ability of the government to oversee the financial markets. Any improvement in this ability is better than none. The politicians shouldn’t be “playing politics” with this crucial necessity. I don’t know that they can be trusted to resist the temptation … probably not.

By the way, someone should inform Obama that having his picture taken with Warren Buffett doesn’t make him a financial guru. Maybe Obama and his wife should get an IRA or 401-k (which neither have according to their tax returns) and see what it feels like to try to invest for the future. Even a little experience would help if he’s going to be president. I suppose he’s counting on the federal retirement system to take care of that problem. That’s arrogance … or stupidity. Take your choice.

Regardless, the current crisis isn’t simply a product of the Bush administration and has nothing to do with his economic views. It has resulted as a lack of proper oversight and could have been deterred to a large degree, if not in entirety, if existing laws had been enforced. This is the responsibility of a career bureaucracy which is little, if any, changed from administration to administration. It is also the responsibility of the Congress which has been too busy with political bickering, both Republican and Democratic, to fulfill their responsibility to the American public. Frankly, I’m sick and tired of their finger pointing.

Some bureaucratic heads need to roll … from low to high. And … people need to be held accountable and criminally prosecuted if warranted from property appraisers and loan officers to high corporate officials.