Does The Winner Of Today’s Presidential Election Stand A Chance?

Today is election day, the day Americans get to choose their next leader. This election is considered by many to be one of the most important in recent memory. This is evidenced by the record number of voters expected at the polls this year. With the economy tanking, and so many other problems looming in the U.S., Americans are looking for the new president to come in and make everything better. A lot is going to be expected of the new president, and it certainly is not going to be easy to deliver. This begs the question: Does the next president even stand a chance for success?

My first thought on this is, not really. I don’t think the new president, be it Barack Obama or John McCain, has much hope to be remembered as a successful president. The situation they are going to come into is just too problematic. We are already scheduled to add another $2 trillion to the national debt next year, according to Goldman Sachs as reported by the Wall Street Journal. With this debt level already basically committed, the new president would be hard-pressed to justify even more spending. That means that many promised programs will likely get shelved. While this would certainly be for the greater good, people won’t necessarily remember that part. What they remember is what life was like for them during the term of the previous president. Considering the factors we are faced with today, I don’t see how life is going to get better for Americans, and this is likely to reflect poorly on the new president.

Really, I feel bad for whoever becomes our president-elect today. It was not their failed policies that put the U.S. in the place it is today, but they certainly will have to deal with the mess. They don’t have a hard act to follow, and they will likely be remembered more fondly than their predecessor, but with their hands essentially tied behind their backs it will be difficult for them to be remembered for much of anything beyond the man who preceded them, George W. Bush.

The next president is going to inherit one of the toughest jobs of all time. Americans want change and the president is going to be pressured to deliver, and quickly, without selling out America’s future generations. How are they going to do it? Honestly, I have no idea, and I certainly do not envy the situation they are faced with. I look forward to seeing how they handle it, though, and I wish them the best of luck. No matter which candidate is elected, I know I’m looking forward to change. I am tempering my expectations somewhat, considering the circumstances, but at this point we are in need of new leadership and I hope America chooses the right man for the job.

Case-Shiller Home Price Index Shows Another Record Decline, But…

Every month now, the Case-Shiller home price index is setting a new record for the largest price drop, but some are seeing a silver lining in that cloud. There are a couple cities tracked by the index that appear to be heading in a positive direction. Cleveland and Boston both showed a price increase over the previous month. Cleveland lead the way with a 1.1 percent month-over-month price increase, while Boston barely held positive ground, with a 0.1 percent month-over-month increase. This came on the heels of some other positive news regarding the housing market, which is leading some to say the market rebound is coming.

The other positive news regarding the housing market was that new home sales rose by 2.7 percent in September, beating expectations. In addition, it looks like the Fed is preparing to lower interest rates, and the $700 billion bailout money is starting to get circulated, which many hope will soon jump start lending. Will this all be enough to fix the mess that is the housing market right now? I doubt it.

The real determinate in all of this is whether or not you feel that the U.S. economy is on the right track. If you think that all these fancy bailout measures are going to fix the problems we are facing, then you can probably figure that the housing market is going to rebound as well. On the other hand, if you don’t think that the economy is heading in the right direction, then calling a real estate market rebound is very premature. There is a lot of hope that the measures already in place--along with the fact that the election is next week--will bring stability to the markets. While I certainly think it might, at least for a brief period of time, I just don’t see how it will last. The fundamentals that brought the economy to its knees are still in place, and in some cases are even worse than before. So how can we say that a new president is going to magically make everything better? The answer is that he won’t, but he might make people forget about all the underlying problem--at least for a little bit.

The latest consumer confidence poll from The Conference Board fell to an all-time low of 38 percent, according to the Wall Street Journal; this is down from more 64 percent in last month’s poll. People are extremely fearful and cautious right now, and any glimpse of stability is likely to help somewhat. The election will certainly bring that, but again, the new leader is going to come into an exceptionally difficult situation. Layoffs keep coming and the credit markets still haven’t been opened. The government has written a lot of checks, but so far the only thing they have accomplished is adding to the already astronomical national debt tally. I certainly do not envy the position the new president is going to be put in, and no matter how good they are, I just don’t see how they are going to be able to fix all these problems. It is going to take a lot of time and heartache to get this ship righted. I certainly wish the new president the best, and I hope he does an amazing job, but I’m not holding my breath that he is going to be a miracle worker. It is likely that we will see the markets rally after the election, but investors beware.

Barack Obama And John McCain’s Effect On Your Pocket Book

With the election coming up next week, voters on the fence really need to start looking long and hard at the candidates' positions on key topics. And what topics could be more important than those affecting voters' pocket books? The Wall Street Journal just published a great article that breaks down the views of Barack Obama and John McCain on various issues that affect voters' pocket books, so let’s take a closer look at them:

Short-Term Relief:

Obama wants to stimulate the economy through a tax rebate of $1,000 for families and $500 for individuals. In addition, he is proposing that we allow for penalty free withdrawals from 401(k)s and IRAs, up to 15 percent of the account value or $10,000, whichever is lower.

McCain wants to stimulate the economy by cutting the capital gains tax for stock held more than one year to 7.5 percent. He also wants to increase the amount of stock losses deducible against ordinary income from $3,000 to $15,000. In addition, McCain would tax withdrawals from seniors' retirement accounts no more than 10 percent.

Analysis: If you are wealthy and have a lot of money in stocks McCain is your man. If you don’t, then Obama will likely provide your family with more short-term relief.

Income Taxes:

Obama wants to raise taxes on the wealthy. Families making more than $250,000 and individuals making more than $200,000 will likely see tax increases. The top two marginal tax rates will be increased to 36 percent and 39.6 percent, respectively. Obama also plans for some tax cuts for lower and middle class families.

McCain wants to keep all the Bush tax cuts, and also plans to gradually extend tax credits for dependents from $3,500 to $7,000 over time.

Analysis: Again, if you are wealthy, McCain’s plan will benefit you much more as you will actually see tax cuts as opposed to tax increases. If you have a lot of kids, McCain’s plan might also make sense for you, but that probably depends on your income bracket. For most people not in the wealthy category, Obama’s plan will offer them more benefit. This, of course, is not taking into account the potential for job losses that could stem from these measures as McCain proclaims would happen.

Investments:

Obama wants to raise capital gains tax from 15 percent to 20 percent for the wealthy. At the same time, though, he wants to eliminate capital gains tax on start-up and small businesses.

McCain wants to keep capital gains taxes right where they are, at 15 percent.

Analysis: We don’t get much insight as to the full extent of Obama’s plan for small businesses, so it is difficult to opine on that piece, but the basic trend is the wealthy are going to be taxed more by Obama while McCain wants to stimulate the economy through tax breaks to this class.

The full Wall Street Journal article covers other areas as well, so if you are really on the fence as a voter, make sure to read the full article; I just pulled out the sections most applicable to investors. The theme you will see in pretty much all of these issues is that, in terms of your pocket book, if you are lower to middle class you will probably do better with Obama in office. If you are upper class, McCain definitely favors you. The problem is that nothing is quite as straightforward as that. You also need to take into account the potential impact that these policies could have on the overall economy. It certainly appears that Obama’s policies would add a great deal more to the balance sheet of the U.S. government, but a lot of things could potentially change that. McCain stresses that Obama’s plans would be deadly to small businesses; obviously Obama doesn’t agree with that, and he does offer several measures to aid small business.

The bottom line is a lot of this stuff that the candidates are saying could go either way. We just don’t know how the economy is going to react to the policy changes, or what limits the economy will place upon their plans and their ability to act, and we will never get to see how the losing candidate’s policies would have turned out. At the end of the day, voters are going to have to use their own judgment and decide whether Obama or McCain is the best man for their family and their country. These are difficult times right now, and this is certainly a difficult decision that we all are faced with. Who is the best person to deliver our country out of this mess? You have a week and a day to figure it out…good luck, and remember to vote next Tuesday.

Any Homeowner Bailout Will Come Loaded With Problems

The calls for a homeowner bailout are becoming louder and louder. After all, why should we bailout Wall Street, but not but Joe Homeowner, who was the victim in all this? Then, of course, there are the financial ramifications to consider. Foreclosures are bringing down the real estate market right now, and isn’t it our duty to save it? If we save the real estate market, then we can go back to the way things were before and everyone will be happy, right? Obviously it isn’t as easy as that, but let’s look at some of the proposals and some the problems that could arise.

We will begin with John McCain’s proposal. McCain would like to see us use $300 billion, taken from the $700 billion bailout package already passed, to buy up mortgages of troubled homeowners. We would then renegotiate the terms of these mortgages to make them affordable for the homeowners. These mortgages would be purchased in reflection of the current diminished value of the properties, according to the New York Times. “Is it expensive?” McCain said of the proposal, as quoted in the New York Times, “Yes. But we all know, my friends, until we stabilize home values in America, we’re never going to start turning around and creating jobs and fixing our economy.”

Sounds pretty fantastic, huh? Couple questions, though: How are we going to make sure that only people who truly need the help get it? It sounds like to me this plan would encourage people to stop paying their mortgage so that they could get some principal reduced and a lower monthly payment. Furthermore, why should responsible homeowners--and renters for that matter--who have been diligent with their finances subsidize the bad mortgages that these homeowners entered into? What kind of message are we sending when we start rewarding people for not paying their bills? There are many other potential issues with this plan, but for the sake of time, let’s move on to Barack Obama’s plan.

Obama is proposing that we issue a 90-day moratorium on foreclosures, according to the New York Times. So we would halt foreclosure proceedings for 90 days in order to accomplish what, exactly? I’m trying to figure it out, but all I can get from this is that we are giving these homeowners 90 more days to live in their homes rent-free at the bank's expense. Is this a new version of economic stimulus we are trying to get banks to pay for? The problem is, because the government now controls Freddie Mac and Fannie Mae, taxpayers are going to be on the hook for a good portion either way. So, really, what’s the point? I assume that they are trying to encourage lenders to work out a deal with the homeowners, but how successful do we really think this is going to be?

The biggest positive I think I see in this plan is that it will force banks to work with short sale buyers. Right now all I’m hearing (I personally don’t do short sales anymore for this exact reason) are horror stories about how all these people are trying to buy short sale properties, but the banks just aren’t cooperating. If they are going to have to sit on these properties for another 90 days, that might be enough to motivate them to make a deal. What does this really accomplish for the economy, though? We would have fewer people with foreclosures on their credit reports, but really, this isn’t preventing a property from hitting the market, it is just selling the property earlier on. For the most part, I see this 90-day moratorium as simply delaying the inevitable, and something that people are just going to unscrupulously try to take advantage of. For the clincher, though, let’s look at Obama’s own statement against this plan from back in February, as published by the Los Angeles Times:

“A ‘blanket freeze,’ Obama added, might ‘drive rates through the roof for those trying to buy or refinance. Experts say the value of homes will fall even more, and even more families could face foreclosure.’” It’s got to be hard to argue with yourself, but I think the February Obama is right on this one.

There are lots of other ideas being thrown around as well, but every one of them has flaws. Frankly, I don’t see how it would even be possible to create a plan that works for everyone. Somewhere along the way, someone is going to get screwed; unfortunately I don’t see how it isn’t going to be renters and responsible homeowners. Any bailout plan is certain to reward the people who simply don’t deserve it. Maybe we should send out tax rebates to everyone who is current on their mortgage or rental payment instead--at least that would encourage the right set of principles. The problem, of course, would be that these responsible people are the same ones who would put that rebate check right into savings instead of spending it on useless stuff. Again, no plan is going to be perfect.

Is Another Economic Stimulus Package Imminent?

Now that the effects of the first economic stimulus package are wearing off and consumer spending is dropping like an anvil, taking America’s economic prospects with it, how long will it be before we see the next brilliant economic stimulus package? The government seems intent on avoiding a recession at all costs, so it seems almost inevitable that a second stimulus package will be unleashed, especially if Obama takes office.

Democrats in House are pushing for more economic aid to be sent out, but in this version they want to see money sent to local governments along with infrastructure improvements and assistance to certain families and workers in need, according to the Economist. Their proposal totals around $50 billion. So far President Bush seems intent to avoid another stimulus package, but who knows if he will change his mind or not. In all likelihood, though, nothing would happen until early next year, under the new President’s leadership. Since Obama has been pushing for a second stimulus package, it seems that if he is elected we can pretty much expect to see one next year, unless the economy makes a miraculous recovery in the second half of 2008 (not likely). McCain, on the other hand, seems opposed to one for the most part, but with Democrats expected to rule in both chambers, according to the Economist, he might be easily swayed if elected.

If I had to guess, I would say chances are more likely than not that we will see another stimulus package. The question that always comes up in my mind though is, “Who’s going to pay for it?” It seems rather silly to tax people in order to give them money back via an economic stimulus, which means we are going to rack up some more IOUs. What’s another $50 billion when you are already $9.9 trillion in the hole, right?

History Sides With Barack Obama’s Tax Plan, But What About The Future?

The New York Times published a compelling opinion piece this weekend written by Alan Blinder, an economics professor at Princeton and Democratic advisor, titled, “Is History Siding with Obama’s Tax Plan?” In his article Blinder uses historical figures to make the statement that Obama’s tax policy will be better than McCain’s. On the other end of the spectrum, the Wall Street Journal published an opinion piece this morning by Martin Feldstein and John Taylor, economic professors at Harvard and Stanford and advisors to McCain, titled, “John McCain Has a Tax Plan to Create Jobs.” Both articles make great points, but the authors are obviously biased. So who are we to believe? Which Presidential nominee ultimately has a better tax plan?

Of course, what candidates say in a campaign and what they do in office can be completely different, but even if we assume that the winner will follow through on his tax promises, we can only make an educated guess. McCain plans to keep the existing Bush tax cuts in place, which will help wealthy Americans and investors who pay capital gains taxes. McCain also wants to cut business taxes among other things, which Feldstein and Taylor believe will create jobs, spur growth and benefit virtually everyone. That certainly sounds lovely, but Blinder makes some great points that seem to counter such praise of McCain’s plans.

Blinder makes the case in his article that Democratic Presidents have greatly outperformed Republican Presidents while in office, economically speaking. From 1948 to 2007 the U.S. economy has grown 1.64 percent per year under Republican Presidents and 2.78 per year under Democratic ones. Blinder estimates that this difference in growth over an 8 year period would mean an additional 9.33 percent of additional income for every American. Blinder then goes on to point out that income inequality widens when Republicans are in office and shrinks when Democrats are in office. This point of course is fairly obvious given the policy of Republicans and Democrats, but worth noting nonetheless.

So where exactly does this leave us? One article focuses on the future, while the other focuses on the past. Can one really look at the past as an accurate predictor the future? The past certainly does not guarantee future results, but by what other means can we make projections?

Blinder’s article had the bigger impact on me because he actually supports his points with statistical facts. Whether or not they accurately represent what the future holds for Obama or McCain, they do give us a basis for conjecture. Feldstein and Taylor claim that jobs will be created, but they don’t support this claim with anything. Though the logical side of my brain tells me that tax cuts for businesses will lead to job creation, where is the proof? After reading Blinder’s article one is certainly left to wonder.

Another interesting piece of information I learned watching I.O.U.S.A. was that the national debt has tended to increase at a much faster pace when Republicans were in office. This coincides well with the GDP growth mentioned in Blinder’s article, but also, as pointed out in the movie, is a result of tax cuts. This again leaves one to wonder and even rethink one’s perceptions about the validity of certain tax policy reforms, though one must still question whether the past performances of a few Presidents can accurately predict future results.

Are McCain and Obama likely to follow in the footsteps of past Republican and Democratic economic performance, or are their plans different? Voters must decide for themselves, and I urge anyone who hasn’t yet read these two articles to do so, as they might encourage readers to think more seriously about this issue.

Paris Hilton For President: Energy Policy For People (magazine)

Paris Hilton has recently released a video rebuttal to a rather ill-advised John McCain ad which compares Barack Obama with “celebrities” such as Hilton and Britney Spears, suggesting a lack of substance despite their charisma. The original ad seems desperate and is as insulting to the viewer as it is to those mentioned. Meanwhile, Paris’ ad is actually witty, albeit a touch misinformed about energy policy.

Who would have thought that perennial tabloid darling Paris Hilton could actually deliver a speech more effectively and with greater poise than our president of eight years? It seemed, in fact, that her relevance was beginning to fade until the McCain ad was released. While I doubt that Ms. Hilton will win a single state in November, this may have the unfortunate side-effect of reinvigorating the public’s fascination with her. Thanks, John; I guess we’ll always have Paris. Still, we could do worse than President Hilton: I dare say that she would have looked as convincing as Bush did arriving in a flight suit on the USS Lincoln to announce “Mission Totally Accomplished! Luvz it!” She might even be able to pronounce Sarkozy properly.

But my praise of Ms. Hilton stops there. In the video, she suggests combining the two energy policies of McCain and Obama to help solve the energy crisis. Her suggestion is to allow offshore drilling to tap those rich deposits for cheap, easy fuel as we work on alternatives. Appropriately enough, the last time I used the words “rich,” “cheap” and “easy” in the same sentence, it was to describe Paris Hilton, but unfortunately her plan is as superficial as her cult, and it is flawed for the same reason that McCain’s “solution” is flawed.

Offshore drilling would be a placebo for the problem at best, as the restricted areas would provide only a drop in the proverbial barrel of our oil consumption. Furthermore, it will take several years to construct derricks and refine the crude, providing no immediate relief and precious little when the wells truly begin to produce. All of this assumes that the oil would be sold exclusively to Americans, and we should know by now that this is not a given.

The Paris for President campaign is off to a rocky, though amusing start. I’m afraid she won’t have time to really establish a solid platform by November. That said, I think her decision to start this late in the campaign is a refreshing one. This overextended campaign season has been costly and grueling for everyone involved, and though I can’t get behind Hilton on her energy policy, her frank approach is a balm in this hostile election year. She even may have a running mate selected before the Republicans or the Democrats. She mentions Rihanna, but a ‘Hilton Clinton’ ticket has such assonant appeal, and it’s better to be called assonant than asinine, which is how I would describe the campaigns of other nominees at this point.

Luvz it, indeed.

What Is The Gravest Long Term Threat To The U.S. Economy? Radical Islam, Says John McCain

In an interview with Fortune, Republican presidential candidate John McCain was asked what the single gravest long term threat to the U.S. economy was. This is not an easy question, with so many choices and all. Is it the housing crisis or the credit crisis? What about the huge deficit the country is running, or the rising cost of energy? How about Social Security? McCain didn’t select any of those options; instead, he said that radical Islam was the single biggest threat to the U.S. economy. Pardon me a moment while I let this sink in a bit…nope, still don’t see it…oh well, maybe it’s beyond me. Why don’t we analyze it a little more and see if that helps?

Okay, so 9/11 did a number on our economy, I give him that. I can also understand the argument that terrorist attacks, or even the threat of them, can upset consumers, thus affecting the economy. So radical Islam can have an impact on the economy, but is it really the biggest threat? Wait…I think I get what he is trying to say--maybe McCain is telling us that radical Islam is the biggest economic issue because it is forcing us into war and costing us not only billions of dollars each year to fight abroad, but also billions to fight here at home. Oh, and it is also a problem because the movement keeps growing stronger the more we fight it--kind of like using fire to put out fire. Wow, I totally understand now, this fight is going to go on forever--man, that is going to be a downer for our economy. Okay, so now I see why it is such a huge problem…

In all seriousness, I could go on for awhile about why radical Islam is, and has, been fueled by our actions, but for the sake of brevity I will not (for more information here is a good write up). Based on the fact that we in essence created (in many cases) and have fueled radical Islam, maybe the biggest long- term threat to the U.S. economy is not radical Islam, but rather poor foreign policy. That might not be such a bad selection after all. We could look at the national debt as a big one, but we can also say that a lot of that debt was created because of poor foreign policy decisions. We could make the same case for several other problems as well.

At the end of the day, we know exactly why McCain chose radical Islam as the biggest problem, and that is because he is riding the “national security” ticket. If any voter has serious doubts about our national security, McCain is their man. The politics of fear, as it is called, is probably the biggest thing McCain has going for him right now, and he wants to milk it for all he can. The more American voters he can convince that national security is an issue, the better chance he has to win. It also doesn’t hurt that Barack Obama, the Democratic candidate for president has family ties to Islam, a point which has unfairly caused accusations that he is supporting terrorists--despite the fact that Obama himself is a Christian, not a Muslim. Long story short, McCain chose this reason for political purposes, yet he might not be too far off in actuality--only he needs to focus less on the effect and more on the cause.

Barack Obama And John McCain Battle Over Economic Policy

Does Barack Obama or John McCain offer the best hope for the U.S. economy? This, of course, is the number one issue on everyone’s mind for the upcoming presidential election. The candidate who is able to best answer this question, and do so in a way that Americans can understand, stands a great chance of becoming our next president. So which candidate does offer the best hope for our economy anyway? Well, it depends on who you ask.

Yesterday in Raleigh, Obama attacked McCain’s economic policy, calling it a repeat of Bush’s miserable failure. Obama’s own plans for the economy include an expansion of unemployment benefits, another economic stimulus package of $50 billion, tax cuts for the middle and lower classes and relief for homeowners facing foreclosure, according to the International Herald Tribune. Obama was quoted in the article as saying, "We were promised a fiscal conservative. Instead, we got the most fiscally irresponsible administration in history. And now John McCain wants to give us another. Well, we've been there once. We're not going back."

The McCain campaign didn’t take the attacks sitting down, though. "While hardworking families are hurting and employers are vulnerable, Barack Obama has promised higher income taxes, Social Security taxes, capital gains taxes, dividend taxes and tax hikes on job-creating businesses," McCain spokesman Tucker Bounds said in a statement issued before Obama's remarks, according to the International Herald Tribune. "Barack Obama doesn't understand the American economy, and that's change we just can't afford.” McCain’s plans for the economy include keeping the Bush tax cuts in place as well as tax cuts for businesses.

In the end it comes down to two schools of economic thought. Obama believes that government spending and policies can help us get out of the economic rut. His policies are going to increase government spending, and overall government involvement in the economy. McCain, on the other hand, belongs to the school of thought that says the economy revolves around businesses. In his mind, the best way to stimulate the economy is to put money into the hands of businesses, who will then be able to add more workers and so on, which ultimately will lead to improvement in the economy.

One thing I haven’t talked about yet is the Iraq war. Obama, of course, wants to start drawing troops out of Iraq, potentially saving us a lot of money (money he wants to put back into our economy). On the other hand, McCain plans to keep troops there for a long time, continuing to add to our government spending on the war (much of this spending is not directly aiding America's economy). That being said, Obama’s overall plans for government spending far exceed McCain's. For the most part I tend to agree more with McCain’s policies than Obama’s, but I do side with Obama in relation to the Iraq war. While I don’t agree with pulling out altogether at this point (because it would hang those Iraqis who trusted us with their lives out to dry), I do think we need to figure out a better plan. The plan to occupy Iraq indefinitely is not a good plan. We never should have gone there in the first place, in my mind. It has cost us billions of dollars and many American lives, but that is another post for another day.

The bottom line is these two candidates differ greatly in their policies: One thinks the government can get us out of this mess, and the other is going to rely on business and the markets to turn things around. Which one is correct? We will have to wait and see. Either way, though, the new president is going to have their hands full, and I seriously doubt either one is going to be able to come up with the magic elixir that rights this thing over night. Turning this ship around is going to take some time and diligence.

Will We See Another Economic Stimulus Package?

After the latest round of unemployment figures, there is renewed buzz for another economic stimulus package. At this point it is just talk, but depending on how the first economic stimulus package pans out, and whether the price of oil comes down, we may see the talk turn to action sooner rather than later.

President Bush has expressed interest in more economic stimuli, but he wants to wait until we can see how the first round performs first. In addition, Bush has his hands full at the moment trying to get his tax cuts to become permanent, according to CNN. A couple of the plans being proposed in the Senate, though, are increasing unemployment benefits and a $300 billion FHA loan boost, according to CNN.

Those of you who are frequent readers of my blog probably know that I wasn’t a big fan of the first economic stimulus plan, and I’m certainly not in favor of another one. Without getting into a full on tirade about how irresponsible our government is, we are more than $9 trillion in debt, and we should not be going further in debt in order to “attempt” to artificially rouse our economy. Contrary to popular belief, we can’t keep borrowing or printing money indefinitely without recourse. We are walking on thin ice right now, and who knows when it is going to break--but the more weight we add, the higher the chance goes.

Ultimately, I expect we will see some sort of economic stimulus because I seriously doubt the first one is going to have the effect that Bush is hoping for. It was a poorly devised plan to begin with, and things are only getting worse for American consumers. When it gets a little closer to election time (assuming the economy doesn't miraculously get better) you can bet that Bush is going to put his best foot forward for the American public in order to attempt to gain support for the Republican presidential candidate: John McCain. He will propose some miracle plan--that is completely full of hot air--which he will claim will fix everything, and then dare the Democrats to shoot it down. As long as Bush does it right and positions it so that the American public agrees with it, then if the Democrats don’t vote it through they will look like the bad guys and then Obama will take the hit. By the time the public finds out that the net effect of this plan leaves us worse than where we started, it will be too late.

I don’t want to be pessimistic, but I have a hard time not being so when talking about our government right now. I hope that the government thinks twice about another stimulus plan, and actually takes into account our budgetary deficiencies, but when has that ever stopped them before? If you are wondering where I am, I’m heading out to get a wet suit, because the water under the ice looks awfully cold.

Barack Obama Could Win The Election Thanks To Ron Paul?

The fact that the Ron Paul Revolution is still kicking, despite the fact that the Republican nominee has already been decided, could potentially help Barack Obama and hurt John McCain’s chances at the presidency. I read an interesting blog post from Tommy Christopher at the Political Machine that brought up a key point. According to Christopher, one of the strongest ties of the Ron Paul revolutionaries is that they strongly oppose the war in Iraq. Since McCain plans to keep the Iraq war going indefinitely, this will likely lead to many Ron Paul supporters crossing party lines to vote for the Democratic candidate, which will likely be Obama.

McCain’s party hasn’t worried too much about the Ron Paul fallout, probably assuming that it would taper off once he clearly won the nomination, but that doesn’t appear to be happening. In the recent Pennsylvania primary, Ron Paul won 16% of the vote, which in itself is not a huge number, but if a majority of these Ron Paul supporters turn to Obama come election time, they could easily swing the race.

Ron Paul seems intent on continuing to use his platform as a presidential candidate to spread his revolutionary ideas for as long as he can. The more people who hear Paul’s message, about the Iraq war in particular, the more people who could demand the end to this war, which would likely only come if Obama is elected president.

By staying in the race Ron Paul is in effect helping Obama. I don’t think that Ron Paul supporters are truly excited about the prospects of McCain or Obama, or they would be supporting one of these candidates by now. Which way they go in the end though could possibly decide the presidential race, and it is hard to ignore that the biggest issue in many of the Ron Paul Revolutionaries minds is the Iraq war. I can’t imagine many things more upsetting to Republican leaders than the idea of the Ron Paul Revolution helping Obama win the presidency, but it just might happen.

Think Barack Obama Is Going To Be The Next President? Wanna Make A Bet?

If you are so confident that your candidate—be it Barack Obama, Hillary Clinton, Ron Paul or John McCain—will become the next President of the United States, then why don’t you put your money where your mouth is? To show just how far the free market has come, there is now a website that allows you to make money by betting on the outcome of world events from the U.S. presidential race to whether or not Venezuela or Ecuador will declare war on Colombia. The company, which operates out of Ireland, is called Intrade. The website offers a trading platform similar to the U.S. stock exchange, but traders on Intrade buy and sell options on things most people might consider a bit out of the ordinary.

Investors who consider placing bets on Intrade should keep in mind that Intrade is still a small marketplace. This means that positions can be volatile and may be difficult to close out of. Therefore, Intrade should not make up a large portion of an investment portfolio, and should probably be viewed more in terms of entertainment than an actual investment.

Smart investors may be able to profit from some of the holes in the Intrade system and capitalize on the small marketplace. According to an article by The New York Times, a professional poker player named Serge Ravitch made a 35 percent return on his money in just 6 weeks by identifying these weaknesses. One trade he took advantage of was based on the Republican Presidential nomination, which more than 10 percent of traders on Intrade thought would go to Ron Paul. No one in the Republican Party—or any party for that matter—was giving Ron Paul a prayer to win the nomination. Because of the market’s small size, the diehard supporters of Ron Paul raised the percentages in his favor higher than they really should have been.

For other events, Intrade’s predictions have proven surprisingly accurate. The following is a quote from The New York Times article:

“In 2004, President Bush won every state in which Intrade’s contracts—as of the night before Election Day—gave him a better than 50 percent chance of winning. He lost every state where the traders thought Mr. Kerry was the favorite. Late on election night in 2006, while the talking heads on CNN and MSNBC were still saying that the Republicans would hold onto the Senate, Intrade knew better.”

Investors should take caution when making bets on Intrade, and not invest too much at this point. If nothing else, Intrade could prove to be a source of entertainment for investors who want to see if they can outsmart the public. For those investors who want the entertainment value without putting up real money, Intrade also offers play money accounts for free.

As Obama And Clinton Fight, McCain Is Closing In On Presidency

There have been some interesting turns of events in the Presidential race. Last month, Barack Obama enjoyed a huge lead over Hillary Clinton, and was largely favored to win over John McCain. Obama is now only slightly ahead of Clinton, and the margin seems to be getting tighter. Even worse for the Democratic Party, the new Reuters/Zogby poll released on Wednesday shows that McCain is now favored over Obama.

The problems began for the Democrats for two main reasons: 1) McCain clinched the Republican nomination early on, and has been able to focus his full efforts on the race for the Presidency. 2) Tactics and arguments have gotten dirty between the two Democratic nominees. Clinton especially has bombarded Obama with attacks in an effort to expose alleged weaknesses.

Whether or not the attacks on Obama are warranted, they have changed public opinion. If nothing else, they have worked to cast doubt in voters’ minds about the chances of Obama to win against McCain. During the Republican primaries, McCain’s biggest problem was fundraising, and his early victory has aided him greatly. Not only was he able to conserve funds, but his clear nomination allows him an advantage in raising additional funds going forward.

Results differ greatly from poll to poll, and many voters don’t really decide until the very end, so no poll will be perfectly accurate. Democrats probably shouldn’t worry about the Reuters/Zogby poll at this point, but they should be aware that the longer the battle for the Democratic nomination draws out, and the more intra-party fighting goes on, the more advantage McCain will gain.

Summary of Barack Obama, Hillary Clinton and John McCain Tax Policy

I came across an article today by Jeremy Siegel on Yahoo Finance that gives a nice summary of each Presidential candidate’s tax policy. I will attempt to summarize the summary.

Barack Obama

Obama wants to increase the dividend and capital gains tax rate to 24 percent. At the same time, Obama recognizes the power of start-up companies to create jobs, and wants to eliminate capital gains tax on them. Obama would also like to raise the top income tax bracket to a 39.6 percent tax rate.

Hillary Clinton

Clinton is essentially advocating for the same rates as when her husband was in office, before the Bush tax cuts. That would mean capital gains taxes would be raised to 20 percent from their current 15 percent rate, and dividend income would be taxed at a maximum 35 percent. Clinton also supports a raise in the upper tax bracket rate to 39.6 percent, same as Obama.

John McCain

McCain wants to keep the current tax rates, but Siegel points out that he may not be able to. The Bush tax cuts are set to expire in 2011, and taxes will revert to pre-Bush rates if the cuts are not re-approved. Seeing as the Democrats strongly oppose the Bush cuts, and that they are likely to control Congress, McCain could have a difficult time getting the necessary laws passed. It should be noted that McCain and several other Republicans voted against making the Bush tax cuts permanent, which is why Bush had to settle for a test run of the current rates.

Barack Obama Is Taking Shots From The Left And The Right

Barack Obama is getting attacked from all sides now, and it appears that no place is safe for him. On the left he is being attacked by Hillary Clinton, with accusations of plagiarism among other things. On the right he is being bombarded by supporters of John McCain, who are setting him up as a supporter of terrorists. I sincerely feel bad for the guy right now.

I’m not a big supporter of Obama, but I’m also not a supporter of low blows (I don’t support Obama because of his huge spending proposals and other polices, not personal issues). The latest blow coming from McCain supporters at a recent rally was especially distasteful. There the speaker who introduced Obama repeatedly called out his full name Barack Hussein Obama, and suggested that he was being friendly with our terrorist enemies. I was upset with Clinton’s plagiarism accusations, but this is 100 times worse. It would be one thing if they had proof that he is working with terrorists. But to accuse him of what amounts to treason just because the guy was born into a Muslim family (although it is debated whether they were even practicing) and has the middle name Hussein...give me a break. Not that religion even matters, but they guy is a renowned Christian now, not Muslim. All this does is make the McCain campaign look like an ignorant bunch of bigots, which is not exactly the image one wants to portray in a campaign.

To his credit, McCain did repeatedly apologize for the remarks made by his supporters, and he said that he expects that it won’t happen again. I certainly hope that is the case.

In every election, things eventually turn nasty, and it has been one of the biggest turn-offs to me for politics. For once, I would like to see the candidates fight a nice, clean fight and stick to the issues. If you have a problem with a candidate’s proposals...great, let’s debate them. Topics involving religion, race, and family...lets keep those out of it. Here’s hoping for a good clean Presidential race, whichever candidates it may involve.