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Obama Populist Speech Misses the Mark

Last night President Obama gave another speech dressed in his best likeness of a historical figure who history, rightfully or wrongfully, has anointed an American hero. The Pres enjoys likening himself to such American figures in attempts to draw parallels to support his goals. From what I gathered from the speech, Obama likes the middle class and thinks it’s bad that it’s shrinking. I think the direct goal of the speech was to ensure us that the payroll tax cut should be extended while the indirect goal was to remind us that despite his actions, he’s a populist? While this speech was moving and parts of it hard to argue from a basic humanitarian standpoint, our leadership once again misses the mark on the real issues.

Like I said parts of this are spot on…

“But everybody else struggled with costs that were growing and paychecks that weren’t — and too many families found themselves racking up more and more debt just to keep up.”

Ok Barack, you’re on to something I like where this is going…

”Now, for many years, credit cards and home equity loans papered over this harsh reality. But in 2008, the house of cards collapsed.”

….and you lost me.

The credit cards and home equity loans? These are the instruments that deserve all the blame for a credit bubble? This is where the buck stops for the inflationary, unstable credit expansion over the last 2 decades? There’s a big piece missing here-the foundation for credit expansion. What is that foundation? Well if you’ve read anything I have ever written before you probably know where this is going. That’s right, the Fed! The Federal Reserve’s unprecedented expansion of the money supply through interest rate manipulation has fueled unprecedented debt. It has created an environment that, by deliberate design mind you, de-incentivizes savings and forces people to put their money to other use. “Papering” over the harsh reality of diminishing wealth is the sole function of the central bank. Retail debt issuers are tertiary at most in the debt scam chain that has created this credit crisis. Home equity loans are also not independent of Fed action or the Federal Government’s never ending meddling efforts to socially engineer some outcome. He made many statements like this, never tying the government policies of last 40 years to the decimation of middle class wealth. This one made me shiver with irony:

“At stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home and secure their retirement."

How can we build a modest savings with the current state of money? “High interest” savings accounts go for around 1%. What we saved 10 years ago is worth 20% less. How can we buy homes when government policy continuously inflates the prices beyond reasonable and attainable value? How can we be secure in retirement when government tax code forces us to put most of it in risky markets while putting the rest toward an insoluble fund?

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