[digg-reddit-me]The Financial Times has a graph illustrating the dramatic rise in housing prices in recent years.
Given the warning signs of some impending financial collapse, the graph is truly frightening.
Luckily, to dramatize the matter further, some enterprising individual decided to use the stats behind this graph to make a simulated roller coaster…
Paul Krugman takes a break from Obama-bashing – including not a single reference to the candidate in an entire column – in order to try to take a sensible position on the current near-collapse of Fannie Mae and Freddie Mac – and with them, potentially, the entire worldwide financial system. While Krugman comes out in favor of a government bailout, he points out that these two companies are problematic institutions:
The most important of these privileges is implicit: it’s the belief of investors that if Fannie and Freddie are threatened with failure, the federal government will come to their rescue.
This implicit guarantee means that profits are privatized but losses are socialized. If Fannie and Freddie do well, their stockholders reap the benefits, but if things go badly, Washington picks up the tab. Heads they win, tails we lose.
Such one-way bets can encourage the taking of bad risks, because the downside is someone else’s problem.
The Financial Times’s Willem Butier takes a similar position, but with more verve:
There are many forms of socialism. The version practiced in the US is the most deceitful one I know. An honest, courageous socialist government would say: this is a worthwhile social purpose (financing home ownership, helping my friends on Wall Street); therefore I am going to subsidize it; and here are the additional taxes (or cuts in other public spending) to finance it.
Instead the dishonest, spineless socialist policy makers in successive Democratic and Republican administrations have systematically tried to hide both the subsidies and size and distribution of the incremental fiscal burden associated with the provision of these subsidies, behind an endless array of opaque arrangements and institutions…
So let’s call a spade a bloody shovel: nationalise Freddie Mac and Fannie Mae. They should never have been privatised in the first place. Cost the exercise. Increase taxes or cut other public spending to finance the exercise. But stop pretending. Stop lying about the financial viability of institutions designed to hand out subsidies to favoured constituencies. These GSEs were designed to make losses. They are expected to make losses. If they don’t make losses they are not serving their political purpose.
So I call on Secretary Paulson, Chairman Bernanke and Director Lockhart to drop the market-friendly fig-leaf. Be a socialist and proud of it. Come out of the red closet. The Soviet Union may have collapsed, but the cause of socialism is alive and well in the USA.
Many reporters have been using the phrase “too big to fail” to refer to the crisis surrounding Freddie Mac and Fannie Mae – Butier acknowledges this for what it is – a socialism for the rich, in which concentrations of power are protected, profits are privatized, and losses are spread across the social spectrum.
I’m nervous as the citizens of Pennsylvania vote and the rest of us await the results. The numbers have been pored over by everyone, and have already been pre-spun in a dozen different ways. Kos predicts an 8 point spread, which is well within the range of the polls. His main reason is that such a result would not resolve anything – which would be in keeping with how this race is going. I think that’s the safe bet.
My feeling – my gut feeling, based on nothing in particular, and everything in general – is that the race will be a lot closer. I’m predicting that the race will be within 3 points – with either candidate in the lead in the popular vote, and Obama winning a slightly larger number of delegates.
Worth reading as we await the results:
The excellent endorsement of the Philadelphia Daily News:
It would not be content with eking out slim victories by playing to the narrow interests of the swing voters of the moment while leaving the rest of the country as deeply divided as ever. Instead, an Obama administration would seek to expand the number of Americans who believe that they have a personal stake in our collective future – and that they have the power to change things.
It would motivate them to hold their representatives accountable for making it happen. That is, after all, the only way to get us out of Iraq, to address global warming, to make us energy-independent. It’s the only way to resist the forces arrayed against providing universal health care, rebuilding our infrastructure and returning our schools to world-class status. It’s the only way to give our children the means to compete with children in other parts of the world who are healthier, better-educated and have more opportunities than many of our own.
An Obama administration would be freer of the the corrupting influence of big-money donors and corporate interests. Obama has raised $240 million overall, with half coming in contributions of less than $200. People who contribute to political campaigns can feel they “own” a candidate and so Obama would owe allegiance to the wide swath of America that has financed his campaign.
Based on his experience in running a quarter-billion-dollar enterprise with thousands upon thousands of volunteers, we could expect an Obama administration to be well-managed and cost-effective, with the president choosing forward-thinking advisers committed to his program, demanding that they work as a team and pay attention to details.
He would be steady and calm, given neither to irrational exuberance or outbursts of anger. He would make mistakes, that’s for sure, but he could be expected to recognize them, adjust, and move forward.
He would adjust his views to reality rather than trying to adjust reality to his views…
As New Mexico Gov. Bill Richardson has said, Obama is a once-in-a-lifetime candidate who has the skill and eloquence to help us raise our eyes and our aspirations beyond individual, personal concerns, beyond religion or region or race or gender, beyond our well-founded fears to a shared destiny.
Most candidates claim that they will change the way business is done in Washington. Barack Obama has made us believe that, yes, he can.
The Financial Times of London explains why the Democrats must choose Obama.
Mr Obama has fought a brilliant campaign, out-organising his opponent, raising more money, and convincing undecided Democrats as well as the country at large that he was more likeable, more straightforward and more worthy of trust.
On form, he is a spell-binding orator and holds arena-sized audiences in thrall. He is given to airy exhortations, it is true, but genuinely seeks consensus and has cross-party appeal.
Mrs Clinton’s campaign, in contrast, has been a shambles…
The US has the urge to be inspired a little. Electing the country’s first woman president ought to be very inspiring. But not this woman – with her dynastic baggage and knack for antagonising the undecided – running against this man.
The Democratic party has waited an awfully long time for a politician like Barack Obama. Enough already.
The National Journal meanwhile writes that Obama’s campaign may well be considered the first of the 21st century:
The change is still incipient, but the unprecedented scale of the Clinton-Obama race suggests that presidential politics may be moving from the television-based network era to an Internet-based networked era in which candidates who can attract and inspire vast networks of supporters will enjoy potentially decisive advantages over those who cannot.
Many observers in both parties think that Obama has seized the advantage over Clinton and moved to the brink of winning their party’s nomination largely because he has aligned his campaign with the bottom-up principles of the networked era, while Clinton initially sought to run a more traditional, top-down campaign. Obama’s success against a rival who began the race with overwhelming advantages by most customary yardsticks—name identification, support from elected officials, and the backing of an established nationwide roster of donors—may go down in history as the tipping point in the way that presidential campaigns are organized and executed.
