The presidential debate was revealing. Obama took it upon himself last night to “Correct history”. According to Obama “the biggest problem in this whole process was deregulation of the financial system”. “Its not enough to help those at the top, Prosperity is not just going to trickle down”. We therefore need a middle class tax cut. Obama further claims that “A year ago I went to Wall Street and said we need to reregulate”. The solution to our problems is therefore “much better regulations in the financial system”.
Can Mr. Obama name even one act of deregulation signed into law in the past eight years? The fact of the matter is that financial markets are among the more regulated areas of commerce in the USA. While Obama seems oblivious to this fact, it might be reasonable to assume that he does not believe his own words.
Unfortunately the candidate of the other major party appears no better on these issues. According to McCain “The system in Washington is broken”. How is it broken? Special interest money has corrupted Washington. What McCain does not understand is that politics works largely through special interest lobbying. In other words, special interest bias is in the very nature of large activist government. Special interests are easier to organize than broader more encompassing interests. Given the relatively high cost of organizing ‘the people’, we should expect special interest bias in politics. The system is not broken, it is working as badly it should. Given that we have a system that delivers bad results when it is working as it should, it does not need to be fixed, it needs to be deconstructed.
One woman asked both candidates “How can we trust either of you with our money when both parties got us into this crisis?” This is an excellent question. It would seem that the answer is that we should not trust either candidate. Obama wants to exploit the current crisis to promote new regulation. He must therefore blame the current situation on mythical deregulation. Obama rails against the failed policies of GW Bush. However, he is proposing a tax cut, some new spending, and new regulation. This is roughly the same set of policies that Bush delivered. If Obama knows that he is misrepresenting the facts, then he is a demagogue whom we cannot trust. If he believes his own words, then he is deluded to the point of being dangerous. Either way, we should expect further trouble from an Obama presidency.
McCain is proposing more regulation and spending, including the recent bailout. McCain also gained notoriety for saying that interest rates should be zero. The boom that led to our current crisis was produced largely by artificially low interest rates, courtesy of the Federal Reserve Bank. Neither candidate is speaking to the real issues at stake in this election because both are wedded to the policies that are to blame. McCain believes that Washington is broken because he is an idealist. He is enamored with an idealistic vision of democratic governance. We can therefore expect little or nothing in terms of positive change from a McCain presidency.
It is sometimes said that there isn’t a dimes worth of difference between the two major parties. This saying has never been more true than in this election.