Before today, I wasn't really too worried about either candidate. I knew that complaints about Obama's popularity weren't sustainable, and that the whole Hillary-hating enterprise that has infected a certain subset of American society is just too intense to be believable.
It was, however, the following statement by Hillary Clinton during the last debate with Barack Obama:
I think it’s imperative that we approach this mortgage crisis with the seriousness that it is presenting. There are 95,000 homes in foreclosure in California right now. I want a moratorium on foreclosures for 90 days so we can try to work out keeping people in their homes instead of having them lose their homes, and I want to freeze interest rates for five years.It's this sort of statement - a populist solution that has little serious economic thinking behind it - that makes me worried.
I remember back in the late 1990s here in Australia when Pauline Hanson was running around getting votes and attention for her far-out brand of conservative populism. Apart from the blatant racism of her policies, it was her economics that ended any respect she had amongst people in the know. She went on about a strange new tax system that no one understood and proposed things like community banks lending out money to people in rural areas at a fixed rate of 1% interest. But that wasn't the worst bit. No. One of her lackeys - I think it was David Ettridge - declared that it was official One Nation policy to prevent overseas companies and individuals from investing directly in Australian businesses. When a reporter mentioned that overseas investment was a significant form of economic growth for Australia and wouldn't this policy basically ruin the economy, Ettridge responded by saying that the government could just "print the money" to use rather than getting it from overseas. At that point pretty much every serious voter with knowledge of basic economics said "these guys are not fit to rule".
And that is how I feel now about Clinton regarding this statement.
This idea - freezing interest rates and stopping foreclosures - is certainly a populist idea. However you can't just bang your fist onto the desk and say "no more foreclosures!" and "interest rates will stay where they are" (and by interest rates she probably means the interest rates on current mortgages, not the interest rates set by the Federal Reserve). You might as well argue for price controls or reducing the budget deficit simply by getting a big pen and crossing it out on a bit of paper.
If such policies were enacted they would be disastrous, and create more problems that they solve... if they solved anything in the first place.
Of course, with highly trained and competent advisors at her beck and call, this sort of policy would be nipped in the bud straight away if she managed to become president. So either Clinton knew this would happen and said it anyway (which would make her a liar) or she actually did think it would work and did not realise that her advisors would change her mind (which essentially makes her a fool).
Some basic understanding of economics needs to be essential for any politician - but especially those who aim for a higher office like President of the United States. This "solution" presented by Hillary Clinton as a way of dealing with the current economic crisis has its basis in a deadly combination of populism and ignorance. As soon as I read this statement from Clinton, I immediately determined that she is "not fit to rule".
© 2008 Neil McKenzie Cameron, http://one-salient-oversight.blogspot.com/
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