It’s the Economy: Stupid Fact Check

THE SCRIPT Voice of Mr. McCain: “You, the American workers, are the best in the world. But your economic security has been put at risk by the greed of Wall Street. That’s unacceptable. My opponent’s only solutions are talk and taxes. I’ll reform Wall Street and fix Washington. I’ve taken on tougher guys than this before.” Announcer’s voice: “Change is coming. John McCain.”

ACCURACY According to a 2007 study by the International Labor Organization, workers in Norway are the world’s most productive (when measured on an hourly basis), followed by the United States and France. Mr. Obama has offered detailed proposals on the economy, for stemming the mortgage default crisis and channeling investment into activities that will generate new jobs.

He would raise capital gains taxes as well as income and Social Security taxes on those earning more than $250,000 a year, but the notion that he would also increase taxes on middle-class voters has been repeatedly debunked. Studies have found that Mr. Obama would offer most Americans a tax cut three times the size of what Mr. McCain proposes.

Finally, Mr. McCain’s record has favored deregulation of the financial industry, a factor that analysts say has contributed to the credit crisis, and opposed creation of a government agency to oversee Freddie Mac and Fannie Mae. NYT

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Fred First holds masters degrees in Vertebrate Zoology and physical therapy, and has been a biology teacher and physical therapist by profession. He moved to southwest Virginia in 1975 and to Floyd County in 1997. He maintains a daily photo-blog, broadcasts essays on the Roanoke NPR station, and contributes regular columns for the Floyd Press and Roanoke's Star Sentinel. His two non-fiction books, Slow Road Home and his recent What We Hold in Our Hands, celebrate the riches that we possess in our families and communities, our natural bounty, social capital and Appalachian cultures old and new. He has served on the Jacksonville Center Board of Directors and is newly active in the Sustain Floyd organization. He lives in northeastern Floyd County on the headwaters of the Roanoke River.

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  1. I don’t have a lot of faith that either candidate will do much more than place a patch on the economy. To blame Wall Street is a bit of a red herring, in that it diverts our attention from the consumerist frenzy that has enveloped our culture in the last 40 years. That consumerism is what is ultimately responsible because there is no fiscal responsibility, across the board, in this country today. Greed and the urge to get rich is what has caused this crisis. It is time for all of us to look at ourselves and to stop pointing at others. Wall Street is just the fall guy here. Or a mirror, if we would study our reflections closely. First, there was the “dot com” boom (and bust) and now we’ve been through the housing boom (and bust). It is time to take stock and draw a lesson here and stop worshipping at the feet of the secular Messiah (however you define him/her) that will save us so that we can continue engaging in destructive behavior.

  2. Obama would increase taxes on income, capital gains, employers, and the estate tax. McCain would help the middle class as well without both stealing from our most productive citizens and sending a message that innovation and hard work isn’t as rewarding as it has been. Today we saw Biden say that you aren’t patriotic unless you pay more taxes. I didn’t know you could buy patriotism, but I know there is a price at which the Democrats will try to buy your vote.

    I think the problem with Freddie/Fannie is that they were never truly private with their credit line to the Treasury and a mandate to buy loans which led it to take on more leverage and risk than a purely private company would have.

    To say financial deregulation is bad without regard to complex interactions of our world is opportunistic and an oversimplification of what happened. The recent debacle will reveal how Main St, Wall St, banks, the Community Reinvestment Act, bankruptcy law, and regulators (SEC, Fed) as well as unprecedented policies all contributed. Banks and investment companies will probably be required to have higher capital requirements for on and off book assets, and to have limits for certain risky or complex products, and yes, greater regulation.

    Who knows, taxpayers have made $15Billion on AIG so far, but this is a drop compared to the new Resolution Trust entity. Clearly, the taxpayer should never be put into this position, but they could potentially profit from it down the road?

  3. Fred, I have been reading that McCain was the co-sponsor of Senate Bill S-190, the Federal Housing Enterprise Regulatory Reform Act of 2005, which called for reforming Freddie Mac and Fannie Mae from taking on undue risk. This could not have been more timely. The bill was defeated by the Democrats in a House Committee. This seems incredibly germane in the current context.