Saturday, September 27, 2008

Stupid Statements By Candidates and My Responses, First Edition: Barack Obama

1. “$700 billion, potentially, is a lot of money.”

Response: Aint no potential about it, Barack

2. “the root problem here has to do with the foreclosures that are taking place all across the country.”

Response: This is evidence that you do not understand the problem. Please don’t try to fix it. The root of the problem is that interest rates were artificially held too low for too long, leading to mis-pricing of risk in the marketplace. This led to an over-supply of loans (including, but not limited to home loans), which in turn led to massively inflated home prices. The net result is we had people who couldn’t afford a $200,000 house paying $400,000 for a house with a true value of $300,000.

We cannot undo the mistakes of the past. They will be paid for one way or another. Keeping a family in a house they cannot afford solves nothing. It makes the problem worse. Home prices have further to fall, and they will fall, no matter what you do.

There is life after foreclosure. We have enough housing in this country to put a roof over everyone’s head and then some. A person who outspent his means may need to downgrade, but that is not a catastrophe.

3. “this is a final verdict on eight years of failed economic policies promoted by George Bush.”

Response: More evidence that you do not understand the problem. No one is more critical of Bush’s policies than I, but little if any of the blame rests with him. There is plenty of blame to spread but it starts with the failed monetary policies of Alan Greenspan and Ben Bernanke and trickles down to bankers who foolishly allowed independent brokers to sell mortgages to anyone with a pulse.

To the extent that Bush is culpable, you sir share that blame as a member of the political class which keeps promoting the farce that the American dream can be had by anyone without cost or sacrifice.

Shame on you for exploiting this very real problem to score a purely political low blow.

Note: Good lord, that’s only the first of 27 pages of the transcript.

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