Not So Dismal

Making Economics a Little Easier to Understand

Posts Tagged ‘McCain

He Has Them Where He Wants Them

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John McCain wasn’t kidding when he made that statement. The reality is that his campaign faces such certain doom that it would seem Obama has already been the president for several months. McCain is a specialist in rising like a phoenix at the least likely (and last possible) moment, and this is the perfect opportunity for his greatest performance. The elements are in place for such a stunning reversal of fortune to occur. This isn’t to say that it’s likely, just that it’s possible, which is in and of itself a feat given how far the conventional wisdom has gone to write him off at this point.

Two things must happen for McCain to pull out a squeaker. First, note that a stunning fourteen percent of voters remain persuadable at this late hour, only four days until the general election. You have to love the incredulosity of the Associated Press report that claims, “a stubborn wedge of people…somehow, are still making up their minds about who should be president.” After all, what could keep them away from Obama? It all comes down to money. When the economy looks a little bad, I believe that voters tend toward a more liberal philosophy to “fix it”. Yet when faced with a market selloff like the one hopefully just behind us, more of an every-man-for-himself mindset begins to set in. Given this newfound personal insulationism in the face of dwindling retirement accounts, voters are becoming more wary of what they perceive as the Obama threat of raising taxes. They feel they simply can’t afford to give up one more dime. The Obama campaign’s fuzziness on the high-end number for their redistributive tax credit doesn’t help because it leaves the middle-class receptive to McCain’s argument that their tax hikes will creep down the line, leaving tax credits only for those that barely pay taxes to begin with.

Secondly, the almost absolute assumption of Barack Obama’s inauguration on January 20, 2009 could potentially depress turnout on election day. Even though excitement seems high for the Obama ticket, if too many of his supporters figure that he will win by such a landslide that their vote is not required, we may see a stunning reversal from arguably accurate poll numbers to actual numbers at the poll. That, however, assumes strong turnout for McCain, which is a problem. But if enough undecideds swing toward the more conservative choice and enough Obama supporters simiply write off victory as inarguable, John McCain may yet find a way to pull off what would be, perhaps, the greatest upset in the history of the presidency.

Written by caseyayers

31 October, 2008 at 10:16 am

Stop the Bailout Train

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In response to today’s Politico Arena question, “Does McCain’s ‘Homeowner Resurgence Plan’ announced at the debate make sense?” (Text of plan from the campaign’s website can be found here.)

The problem with the McCain campaign’s proposal is that it favors certain types of investment (namely, housing and real estate) and does so with taxpayer money. What compensation is to be given to those that own Apple or Google stock, with both companies’ market capitalization nearly sliced in half in the past year? Will there be a bailout for stock market investors that were “misled” into buying at prices that make the investment seem unpalatable today?

Government assistance in guaranteeing low interest rates is still an affront to the free market, but a more necessary and less harmful one. It is true that many homeowners were misled into accepting deceptive mortgage terms, and many families may be willing to continue to pay down the original principal of the loan if their payments at the very least do not go up from here.

Free market adjustment of mortgage values should be encouraged, too. Homeowners have every right to simply walk away from the mortgage they signed. The banks that hold these loans will often be very willing to rewrite mortgages to lower values on their own accord, rather than assume the responsibility of the property and be left with a house they may not resell for a long time.

Involving the federal government in yet another facet of a problem that, at its origin, is the result of artificially low interest rates will only serve to increase the national debt, lower the dollar’s prestige, and accelerate the rate of inflation, only further penalizing those that continue to pay their mortgages or invested in assets other than real estate.

Written by caseyayers

9 October, 2008 at 8:08 am