Taxes are no longer a reason to choose a candidate

“The fundamentals of the economy are still sound.”

Ouch! It doesn’t feel that way to me. It hasn’t felt that way for quite some time; yet, this has been John McCain’s mantra for several months. Walking off the plane on Monday morning in London, I was barraged by the latest bank failures and was overwhelmed by a feeling of dread. I wondered (and still do) if the average American understands how serious this is.

OK, folks, a number of you cite taxes as the reason to vote for McCain. For those of who cite taxes as your main reason for voting for any candidate scratch that argument. Regardless of which party enters the White House in January taxes will need to be raised or, at the very least, they won’t be cut. Period. You can debate the merits of one tax policy as opposed to another but we are in unchartered territory. In fact, if you’d like to find an example of this type of crisis you should go back to the Great Depression. Yes, it is that serious. And, yes, it was Democratic policies and regulation that got us out of that mess and ushered in one of our most prosperous economic eras.

McCain has supported deregulation as much as he tries to back pedal this week. That same deregulation coupled with no government oversight is what has brought us to the worst economic crisis since the Great Depression. Let me ask you this, if you support small government and free markets do you support the $700 billion to $1 trillion bailout of the banking industry? Why? Why is it OK to jump in now and let taxpayers shoulder the cost?

Do you remember the days when banks were just banks? The Glass -Steagall Act of 1933 split commercial banking and investment banking. The thinking was that the free reign given to banks prior to “The Crash” was one of the major causes thanks to the excessive risks banks were taking. Sound familiar?

Fast forward to Reaganomics and the beginning of deregulation. Throughout the 80s and 90s the banking industry lobbied hard for the repeal of these laws. Senator Phil Gram, now an economic adviser to McCain, was a key supporter. Believe it or not, we can’t just blame Republicans for this repeal. It was passed in 1999, voted for by both Republicans (McCain was notably absent probably due to the fact that this economy stuff is self-admittedly over his head) and Democrats and signed into law by Clinton. The consensus being that these outdated rules no longer applied to the current environment.

But, here’s where the Republicans are left holding the bag. Oversight. There was none. There’s no debating the fact that Republicans were in control. If they couldn’t monitor and stop these egregious abuses while they were occurring what makes you think they’ll fix it now? You and I may not have seen it coming but others did. When credit is cheap, unaffordable homes are somehow affordable, and investment banks are selling instruments that are impossible to understand for most people you have to wonder how so many people could be asleep at the wheel. Greed is a powerful thing.

Lastly, our Republican administration has offered to bailout our banks by buying $700 billion of toxic assets which would then be managed by the investment banks we bought them from. Is it me or does this make absolutely no sense? How does that work? If they couldn't sell these instruments when they owned them why do we think they'll be able to sell them when taxpayers own them?! Not only are we getting slammed due to inflation, tight credit, job losses, etc. but now we also get to own the crap no one can sell? Brilliant.

Come on, people. Wake up.