Free markets, deregulation, small government, low taxes, control spending, and no pork

If I understand the tenants of the Republican party, these are their values. They are also John McCain's reform prescriptions for change. The problem is that these are the same prescriptions that they have been giving us for over thirty years since Ronald Reagan was president. The problem also is that they don't seem be be working very well in practice. Exhibit number one is the current crisis in the financial markets. Failure to provide a reasonable level of government regulation for security firms and non-bank mortgage lenders has led the way into our current financial mess. The same can be said about the problems with the government sponsored entities: FNMA and Freddie Mac. The irony is that the same proponents for these policies and their Wall Street benefactors are the very same ones who now seek government assistance to bail out failed institutions. What ever happened to the notion of "free markets?" The proposed solutions to prop up these companies or to facilitate a fire sale through government guarantees are anything but "free" to the taxpayers. So much for deregulation and unfettered markets.

Well, one could say that we are just in one of those economic downturns perhaps even a recession, but according to McCain, the fundamentals of the economy are good. Is he looking at the rising unemployment rates, the falling value of the US dollar, our exploding trade deficit, the mushrooming budget deficit, our national debt, or the cost of health care? What about wages, cost of education, and the sharp decline in home valuations. And now with the recent events on Wall Street,yesterday's market decline was biggest one day retreat on the DOW since 9/11! What about the declining value of retirement funds?

John McCain is right about one thing: America desperately needs reform. Unfortunately, he and his running mate are very unlikely to be able to deliver. By his own admission, he doesn't view himself as steeped in understanding the economy. His running mate has even less experience with the macro economy. Even more sadly he relies on a team of advisers that includes lobbyists for special interests. Chief among them is the lobbyist for USB, former Senator Phil Gramm, who characterizes Americans as "whiners" while his fingerprints are all over much of the financial deregulation that has got us where we are today. Just imagine Phil Gramm as the likely Secretary of the Treasury under McCain. I don't want my investments dependent on their prescriptions. They will simply mimic the current administration's approach over the last eight years that has run us into a ditch.

America needs to reform its financial system and put regulatory safeguards in place to prevent market excesses created by totally unfettered markets. Free markets yes, but with appropriate regulation. We need to get America on a sound financial footing by critically evaluating all government spending including defense to eliminate unnecessary spending. No longer can we afford deficit spending which is simply a tax on future generations if it is to be repaid responsibly. Otherwise, the Treasury will simply print a few more dollars while the value of our currency declines against other major currencies like the Euro and the Yen. Without reform and fiscal responsibility, we are destined to become the financial equivalent of a "Banana Republic" with inflation to boot. Already we see a massive transfer of our wealth abroad while the US Treasury sells bonds to sovereign funds and international investors. As our economic woes continue, these investors will loose confidence in our ability to repay, and the interest rates will correspondingly go up to attract the capital. This will only compound the problem with a larger share of our discretionary budget going to debt service.

The choice in this election is quite clear. We need change. Although John McCain has cleverly cast himself as a Maverick, the fact remains that his staff and supporters are the same ones that have pushed the these same Republican principles for most of the last thirty years. Continued tax cuts for the wealthy, mismanaged government that caters to special interests, and failure to invest in critical infrastructure at home will only make the problem worse. The elimination of a few pork programs will simply not be enough. I fully agree that the earmark process should be shut down, but this is simply a drop in the proverbial bucket when looking at the whole scheme of things.

The Democrats and Barak Obama may not have all the answers, but one thing is for sure: They do legitimately represent change from what we have been doing and they have the only successful track record of sound fiscal policy from the Clinton Administration. If we expect to get different results in the future, then we must do something different now from what we have done for the last eight, or for most of the last thirty years. Putting America First is not about supporting either of the parties, but America can not take a risk on the possibility of change. We can do this America, but we must change NOW!