Happy Time!

Even though the economy isn't my topic, I just want to let everyone know that the DOW went up 11% today gaining almost 1000 points throwing it back over 9000. This was the highest daily point gain for the DOW doubling the previous high. 

Does anyone think it's a coincidence that the banks which were part of this mess to begin with were closed today and the market did so well? I don't know if that makes sense to anyone, but I know what I'm trying to explain so just let me know what you think.

Post for week 10/03/08

Hi everyone, This friday was the first presidential debate. The debate started of quite respectful and tranquil but started to get more and more heated as it went on. The first about 40 minutes was covering the economic crisis going on in the United States and even though this was not supposed to be about the crisis the debate covered many important issues. As the debate went on there were numerous repeated comments from each of the presidents. John McCain said Obama's biggest problem was his expierence, as always. Barack Obama said that McCain has been agreeing with President Bush's wrong doings for 8 years now. This fierce battle went on until the last seconds of the debate where they had to stop both Obama and McCain from talking anymore. My opinions on the debate were that both candidates did very well but Obama truly spoke more crisp and organized. The second thing I truly realized from this debate is that McCain all of a sudden seperates himself from the man he has been for the last 8 years and more. He has agreed with Bush and his ideas and decisions and It annoys me that he doubts having done this. John you cant dodge the bullet, youve agreed with many of Bush's horrible decisions. Just admit it and move on.

Is it the economy stupid?

OOOkkaaay.
Nice Job on the blog entries everyone (er--almost everyone). Good to be reminded that the contest is about more than the economy, though hard to tell given the latest news coverage. Here's my question: What's up with the $700 billion dollar bail-out for Wall Street? Is this a clearly needed economic fix or a too sweet deal for greedy gamblers? What do the candidates say?

Connections

As I watched the presidential debate that occurred Friday night at the University of Mississippi, I realized several things about the candidates that I never noticed before. As both Senator McCain and Senator Obama were asked the opening questions about the economic downfall that is happening right now in America, I noticed that Obama was trying to connect McCain with the Bush administration and their failure to keep the economy strong. Obama tried to use the technique of linking McCain with the frowned upon Bush administration, in a way putting fear into the American people that John McCain will follow the policies of George Bush.  McCain mostly focused on the plan of the 700 billion dollar bailout whereas Obama focused on the underlying issues of why the economy is in this crisis now, and how he will CHANGE old policies to make America a strong economic power. McCain also used the strategy of talking about past experience and past voting records, stating "look at the record." Obama rocked the first half an hour of the debate as a confident and strong orator and constantly reassuring the citizens of the United States that the economy is one of the top priorities for him. Although I am for Obama, I must say John McCain seemed experienced and knowledgeable when talking about foreign policies. In conclusion I do not believe there was a clear winner in the debate, although Obama seemed to be more focused on the camera, more engaged, and constantly making directly eye contact with us viewers. This debate did not seem to win the hearts of the undecided, but I'm sure the vice presidential debate will be an exciting thing to watch next.

All For Now,

-K

Economy

Ahh the economy, what to think? Boy oh boy these past few weeks have been quite the rollercoaster ride. From Fannie to Freddie, Leigmein to Bear the news has been awash with dismal financial analysis and hail marry passes from the government. But these events are not some new occurrence or some freak accident; this financial “meltdown” is merely the product of de regulation and Wall Streets almost psychotic pursuit of a larger bottom line.

Between 1999-2001 a series of sweeping legislation was passed essentially de regulated much of the banking and investment banking industries, in laymen terms the government basically took a hands off approach assuming the market was sophisticated enough to keep itself in equilibrium. This of course is the tried and true republican mantra, because of course less government is better government. At the same time a bubble in the housing market began to emerge, it is important to realize that in our capitalist free market system bubbles are perfectly normal. As housing prices began to skyrocket various banking instuitions began handing out loans to less and less applicable applicants that did not necessarily have the proper income or savings to back these promises, instead the hedged on the fact that no matter what ever year there house would be worth more, and could always be sold at a higher profit then when it was purchased. On top of this some households received variable rate home lowns, which essentially started at a low rate of interest (the amount paid back to the bank for profit) but were set by market factors.

At this point the market is flush with shaky credit, investment banks such as Bear Stearns lent money out at rates as high as 30 to 1, meaning for every actual dollar they had in the vault they lent out 30 more. So when people began to default on there loans and it became apparent that all this credit that the economy was relying on to sustain its growth was faulty it created a chain reaction sucking all the money out of the market.

Environment & Poverty

Environment:

The issue on environment covers: energy, global warming, endangered species, pollutions vs. cost control, and federal lands. Energy contains: ANWR that is The Arctic National Wildlife Refuge, which is a protected area in Alaska that could supply oil and gas. It also includes Energy Conservation, which focuses on finding more efficient automobiles and appliances that do not require additional energy imports, or oil drilling. Lastly, the issue on energy includes the idea of alternative energy such as solar power, wind power, wave power, biomass power, and other alternative energy sources. Global warming contains the issues on global warming, climate change treaty, and Kyoto protocol. Most scientists believe that the greenhouse gases cause the rise in Earth’s temperatures, and that the government should regulate industry, and whether it will affect climate change. Endangered species contains issues on the endangered species ACT, which prohibits activities that harm endangered plants or animals or their environments. Pollution control vs. cost control, focus on the clean air act, the clean water act, and the CAFÉ standard, which required cars to maintain an average of 28 miles per gallon for all cars sold..

Poverty:
Individuals and families are considered impoverished if their pre-tax income falls below U.S. Census Bureau’s poverty threshold. The thresholds are based on two variables: the cost of the “economic food plan”, and evidence that a family of three or more send approx. one-third of their income on food. For example in 1963 the measure of the threshold for a family of four was $3,128 spent on food. Today the same family would need an income of more than $17,029 to be above the poverty line. Meaning in order to survive a family would need an income of three times the cost of the economy food plan. The poverty rate in 2005 was 12.6%. The poverty rate in 2005 for children under 18 was 17.6%. In 1995, 88% of poor children received food stamps, but by 1998 the number dropped to 70%.

Obama & McCain on Tax Reform

Both presidential candidates reflect and entirely different approach to tax reform in the United States.  Barack Obama believes that any changes to the tax code should reflect the needs and concerns of middle class America.  In his September 12th speech in New Hampshire on tax reform, Obama stated, "My plan will cut taxes to a smaller share of the economy then they were under president Reagan.  Under my plan, income taxes for typical American families will pay lower taxes then they did under Bill Clinton." Obama aims to support the working families instead of well off corporations.  Based on the current economic standpoint, Obama believes raising taxes on middle class America is the worst idea.  His plan includes a 95% tax cut for American workers and small business owners who deserve it, in place of tax breaks for large corporations.  Obama's current tax reform plan provides middle class families with three times as much tax relief then under McCain's plan, which gives nothing to a hundred million households.  McCain plans to give tax cuts to wealthy American's, but also lower taxes for middle class families.  He hopes to repeal the Alternative Minimum Tax (AMT), that is paid by almost twenty-million middle class Americans.  This would save middle class America sixty billion in a single year.  Under McCain's plan, middle class families with children, who are positioned to pay the AMT, will save an estimated $2,700.  A supporter of the current Bush tax rates, McCain plans to make the Bush income and investment tax cuts permanent if he becomes president.  This continues a majority of tax cuts for the wealthy and affluent corporations.  The real question is if McCain would be able to make the Bush tax rate system permanent and still fullfill his promises to middle class America.