It was no surprise that my son plans to vote for Obama. He's been veering left throughout his college years. We had a rather heated discussion about Obama on the phone. I told him that Obama was a socialist. His response was "maybe a little socialism won't hurt". Here is my written response.
Dear Son,
When we discussed Barack Obama and I said he was a socialist, I remember that you responded that "maybe a little socialism won't hurt."
We are now in the midst of an economic crisis of global proportions, the results of which will impact much of your life and perhaps even your children's lives.
This is the result of a "little socialism". Community activists, like Barack Obama and Jesse Jackson, with the help of groups like ACORN, pressured banks into giving favorable loans to minorities in blighted areas of urban America. The banks did one of two things, they either closed the targeted branch, or complied and lost money.
This pattern continued through the 1990s and became more and more insideous. Loan amounts were increased, qualification standards were relaxed, down payments were eliminated. Things became so loose that even illegal immigrants were receiving loans with little down payment or proof of income.
This was done in the name of social engineering, trying to increase minority home ownership to people who clearly couldn't afford it. In short, govenment making decisions that market should make, in short, socialism.
The "CEO's" of Freddie Mac and Fannie May received higher bonuses the more loans they gave, so they had a financial incentive to make more loans. Two execs, Franklin Raines and Jim Johnson, raked in over $100M in personal bonuses between them. They were fired for cooking the books and overstating financial health of their organizations, a'la Enron. They both are now advisors to the Obama campaign.
Over the years, the Republicans have called for more regulation and oversight of Fannie/Freddie, Bush pushed for it over ten times. McCain co-authored legislation to that effect. The Democrats were incredibly protective, fighting off any oversight, despite all the warning signs of problems.
Perhaps it was the contributions. Obama is the top recipient of Fannie/Freddie political contributions in the last three years, with the top recipients being overwhlemingly democrats.
Since controlling congress the democrats have covered for the abuses, and have tried to deflect blame to the banks involved with the loans. It's quite remarkable that they would cite greed of the banking industry for getting involved in high-risk, low-profit loans. In fact, the banks became involved out of political correctness as well as some political coercion and cronyism. One of the early banks in the sub-prime mess was Bear-Stearns, one of the first to fail.
I know that you were delighted to see Ken Lay of Enron go to jail and so was I. The cost of the Fannie/Freddie scandal is already over ten times that of Enron, just for the United States, and is likely to end out costing us more than double that. Mom and I have lost a lot of our retirement savings because of this scandal.
Now we have a bailout plan that doesn't fix the core problem of sub-prime loans. A criminal investigation is underway from the U. S. Attorney's office on Freddie and Fannie. How far will that go with the democrats in control? (If you like conspiracy theories, there are many who think that former New York Attorney General Elliot Spitzer was set up in the callgirl scandal because he was getting too close to too many important people in Washington.)
So why am I so fearful of socialism? Why did I make a career of fighting it? How much can a little socialism hurt?
Love, Dad
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