Sunday, October 21, 2012

What This Election Means to Your Pocketbook

This is a financial blog, and this election season, finances are on everyone's mind.   Which candidate has the best interests of the average Middle-Class American in mind?  The guy who is going to help you directly, or the fellow who says, "Let's help the rich - and it will all trickle down to you!"

Trickle down is another word for being pissed on.

How do these candidates stack up on these financial issues?   I think the contrast is clear.  If you are a middle-class American, you will do better with Obama than with Romney, as measured by every financial criteria:

1.  The Deficit and National Debt:  Yes, these have increased in the last three years.  Wake up - we are in the middle of the worse recession since 1929.  The worst thing the government can do in a recession is to cut back on spending.   Ask any economist.    Temporary deficit spending is a cure, not the cause, of our recession.   Permanent deficits during the Bush years, brought on by unwise tax cuts for the very wealthy, on the other hand, were what brought on our current recession, in part.   What we need to do is stay the course, grow the economy, and the need for "stimulus" and deficit spending will decrease.  Increased revenues from growth, as well as from the exipiry of the Bush Era Tax Cuts, will make up the rest.

2.  Balance of Trade:  Romney says Obama is not "tough on China" - however, Mr. Etch-A-Sketchy has criticized the cases the Obama Administration has brought before the ITC against China (and won, such as the famous tire case) as being "unnecessary protectionism".   Mr. Romney also has a history of farming out jobs to China, in the companies his Bain Capital owns or owned.    Look at the records of the candidates not the sweet words they say in debates.   Who is really being tough on China?  Not Romney.  He is flat-out lying on this one.

3. The Job Market:   Bain Capital was structured to do one thing and one thing only - buy up failing companies, strip off assets, load them up with debt, and then offer them as IPO packages to the people who are managing your 401(k).   No jobs were "created" by Romney, and no, he doesn't know the "secret" to creating jobs, only to making himself wildly wealthy - at our expense.  Despite what Fox News says, unemployment is down, the economy is up.  In the next four years, this trend will slowly accelerate (which is good, rapid changes in the economy are usually bad for the long-term).  Stay the course!

4.  The Stock Market:  The antics of Wall Street and the likes of Bain Capital are what got us in this mess in the first place.   We are better off with a nice stable and slow-growing stock market than the wild swings of the last decades.  You make 30% in one month, chances are, you'll lose 70% the next.  Ask me how I know this - experience!   We don't need more Bain Capitals, more Dot-Com meltdowns, more mortgage bubbles and bizarre mortgage-backed securities and incomprehensible derivatives.  We don't need more ENRONS.  What we need are companies that do what they are supposed to do - make money by creating real wealth (as opposed to just rearranging wealth as Bain Capital did) by taking raw materials, using labor, and adding value to a product.  And over time, you crank out good old reliable dividends - not wild speculation on stock price.  This is the "secret" to personal financial success and jobs creation.  The smoke-and-mirrors of the last two decades has to come to an end!

5.  The Housing Market:  Housing went way up, and then went way down.  Why?  Funny money, mortgage fraud, and the government encouraging people to think that owning granite counter-tops was "the American Dream".   It crashed hard and heavy in 2007, and people on the Right want to blame this on Bill Clinton loaning money to poor black folks.   Sorry, but no sale.  Bill was out of Office the better part of a decade by the time this blew up.  And the folks who borrowed money on these funny-money loans weren't from the ghetto, they were middle-class folks convinced they "deserved" a mini-mansion or would make a million bucks on a "buy and flip" scheme.    What we need are more regulations to prevent this sort of thing from happening again - making banks accountable for how loans are paid back, not just how they are made.   De-regulation - the GOP mantra - is not the answer here, either!

6.  Taxes:  The GOP has done a great job in brainwashing people - middle class people - into thinking that their taxes have gone up under Obama, when in fact they have gone down thanks to the cut in the payroll tax.   If we allow the Bush Era Tax Cuts (which is what got us into trouble in the first place) to expire, we can cut taxes of the middle class further.   Romney?  He wants to cut everyone's taxes, he says, by 20% (!!)  But that means the wealthy will save millions of dollars a year, and you might save hundreds.   And how is this going to help with the deficit?   He doesn't say.   If you make over $250,000 a year, you might want to vote for Romney.  The rest of us?  Well, those sort of policies hurt, not help us.

7.  Health Care:  I have to pay for my own health insurance, and it is a real worry.  If I have a pre-existing condition (after age 40, you can expect to have at least one) I will not be covered, under the old law, if I want to switch plans.   So under the old law, I could not switch plans.   Let's face it, under the old law, things pretty much sucked.   So many people chose not to get coverage, and the rest of us paid for it.  As a result, costs skyrocketed.   Romney says he will overturn Obamacare (how?  Without a supermajority in the Senate, a filibuster will block him).    But more to the point, he signed the same damn law when he was Governor of Massachusetts, and then brags about it at the debate - while saying he would overturn ObamaCare.    Put all the Fox News Scare Stories aside, and look at the real terms of the Affordable Health Care Act and you will realize that it will help the middle class, not hurt them.

8.  Social Security:  Again, the GOP has done a good job of convincing young people (through its mouthpiece, Fox News) that they will never see any Social Security anyway, so why not just chuck the whole program?   Nice try, but with so many Seniors already retired, and a huge generation ready to, the cost of those already on Social Security will not be reduced.  The program is solvent and will remain so with minor adjustments in benefits and income.   No one will be taxed to death (more than they are) and Granny isn't going to be eating cat food.  Privatizing Social Security or putting a "means test" on it are horrific ideas.  The former throws more money into the Wall Street Casino, the latter turns it into outright Welfare.  There is no "crises" in Social Security, other than a crises of faith!

9.  Medicare:   Medicare, we are told, is also in "crises" even as Medicare costs have eased in recent years.  Nevermind that ObamaCare will reduce Medicare spending more than Romney's vouchers - according to Forbes Magazine.  The message they want you to swallow is that a program that helps the middle class and elderly (but not the very, very rich - or rich doctors) is in "crises" and should be slashed to the bone, and people given "vouchers" instead of health care.  The real agenda is clear - Medicare does "crunch" doctor's fees - and ObamaCare will do so even more.   And doctors don't want that, do they?   The AMA has fought national health care since the time of Truman, and they keep fighting today.  If you are a doctor, maybe you are pro-Romney.  If you are a patient, well, it might be a different story.

10.  Medicaid:   Republicans like to grouse about Medicaid - and it is a problem, as more and more middle-class people and rich people end up using Medicaid for nursing home care.  I wrote about this before.   Rich folks give it all to their kids - so they get an inheritance - and then claim poverty so that they can get the government to pay for the nursing home.   What a great way to make sure that wealth stays concentrated in the hands of the few!  I don't know what the answer to this is, but for the GOP to claim the high ground here is utterly specious.   People of both parties and all economic levels use Medicaid.  The only difference is really poor people are the ones who really need it.   Guess who will end up suffering when we cut Medicaid?

11. Credit Cards:  Credit Cards suck, let's face it.  They dangle frequent flyer miles in your face and then sock you with 25% to 30% "penalty interest" if you are 10 seconds late on a payement.  Then they shake down the retailers for 2-5% and try to run the debit card people out of town on a rail.   Credit Card Companies are not your friends.  They are, however, friends of the Mitt, and that is all you need know.  The Obama Administration pushed through legislation to rein in the excesses of the credit card companies.  They still make a ton of dough, but are finding it a lot harder to just ruin people for fun and profit.   The protections of this new consumer agency are helping YOU, and they are the first thing Mitt Romney has promised to destroy.   Which candidate has your best interests at heart?

* * *

So why do people want to vote for Romney?   Well, some  are super-wealthy and know that his policies will benefit them directly by lowering taxes, cutting benefits for the middle-class and poor, and throwing more money at defense spending and big oil.   It makes sense that such folks would vote Republican.  You can't blame them for voting in their own self-interest.   The guy running the chain of check-cashing parlors is going to vote Romney - can you blame him?   But why would the guy who patronizes such a place vote for Romney?   The answers are varied.

Some are distracted by "social issues" like Gay Marriage or Abortion, or Gun Control, and think these are more important than the fundamental workings of our nation.   You can sell these people shit-on-a-stick if you tell them they can keep their shotgun, that little Bubba won't get Gay-Married, and that Amber won't have an abortion (and that shotgun will come in handy for the wedding!).  These are the idiot voters and they believe whatever they want to believe.  They believe Romney created jobs at Bain, and that trickle-down economics will actually work.  No amount of logic or argument will persuade them, as they distrust logic and argument as being "egghead" and "elitist" and possibly Gay.  The GOP's greatest accomplishment over the last two decades has been to elevate ignorance as noble, and education (other than readin' and writin') as suspect.

Still others are racist.  Act shocked.  I know some people like this, and they are not fun to be around.  They blather on with Fox New Talking Points to "rationalize" their hatred of Obama.  But what it comes down to is the Black thing.   And in the South, this is still very prevalent.    They will never fess up to it, of course, but once the discussion gets away from politics, they tell their (n-word) jokes and also blather on about how much they hate (n-word) and how all the (n-words) are getting welfare and how Obama is giving free houses and cell phones to (n-words).

But of course, they are not racist.  No, really, they have well-formed political opinions.  And in the South you even see the phenomenon of Gay Racists, I kid you not.   They are voting for Romney because they hate (n-words) but don't seem to realize that the Romneys of the world feel the same way about them!  Talk about voting against your own self-interest!

Ahhhhh.... but the white elite has been playing blacks and poor  white trash off against each other since before the Civil War.  My Great-Great-Grandfather "Colonel" Thompson looked resplendent on his white horse, leading all that white-trash into battle - from the rear, of course.  He was the only one there who actually owned slaves, of course (and he de-facto owned the poor white tenant farmers, too).    I'll bet he would have been a Romney man, too - and convinced his tenant farmers Romney had their best interests at heart ("Vote for Romney, or I'll lay all of you off!" - the plantation is still with us, it seems).

But that leaves a lot of other people who are voting for Romney for other reasons.   Despite what the fundamentalist Right says, bigoted Christians are really a minority in this country.   However, there is a large group, and maybe that includes you, who are merely confused by all the smoke and noise of a campaign.   Maybe you watch television a lot, and don't have a chance to really think about these things.   You feel that the economy is "bad" because the news programs have had a drumbeat of "bad news" since the Bush Recession started.   And maybe, if you were born in 1980 or later, you've never experienced a real recession as an adult.   All you know is, things were going great in the 1990's, and they went pretty well in the 2000's, and then what the fuck happened, man?   Things are not supposed to be this way, right?

Well, recessions happen - and after living through a couple, I can tell you it ain't no big thing.  And that what causes these recessions is bad government policies.   And what gets out of  out them are good policies.    Wild swings in the market are a sign of an undampened control system that is swinging wildly out of control.  And that is what the policies of the Bush years did to us - throw gasoline on an already out-of-control fire.   What we need now is a dampening - preventing the same sudden surges that can wreck a marketplace - but make huge profits for the very few.  Dampening down Wall Street is the answer, not the problem.  And that is right there, the fundamental difference between the candidates.

Or did you buy Facebook stock and are still a "true believer"?

THINK ABOUT IT.   If you are a redneck who is going to vote based on gun control issues or because you are racist, then there is no point in thinking about it.   Your mind is made up - and it is made of cement.

But if you are an average middle class American, and you are thinking in your mind, "Gee, maybe I'll make more money in the stock market under Romney, or I'll get a tax cut! Or a new job!" maybe you should think a little harder.    Are these just vague and broad promises he is making just to get elected?

Or do you really believe that he can cut your taxes, cut the deficit, increase spending?   If you use any modicum of logic, you might think otherwise.   And that voice in the back of your mind that says, "Gee, something isn't right when a guy promises me everything with no sacrifices on my part whatsoever!"

It is, like anything else I have discussed here, whether it is car leasing, or credit card offers.    You may think the big companies are giving away candy, but it ain't Halloween just yet.   And in fact, they are not giving anything away, but merely robbing you.   And you can know this in advance, because when someone promises you something-for-nothing, chances are they have one hand on your wallet.

When you enter into a business relationship with someone, predicated on a lie, no matter how trivial, it will only go downhill from there.

Romney has lied a lot - long and hard - when he has bothered to tell us anything at all.  It will only go downhill from here.