Blaming the Bush Legacy

Bush wasn't popular at the end of his term and I wonder how history will judge him. He wasn't the sharpest tool in the shed, but is it fair to blame the recession on him?

Critics say that during Bush's term, there were two recessions under his term and this is true. One of them was inherited from the Clinton administration when the Tech bubble popped. The second one we're currently going through was a result of CMBS and RMBS funds (Commercial/Residential Mortgage Backed Securities). I've studied this in my master's course and these are basically investment vehicles that are backed by Commercial or Residential debt. Very simply and commonly put, the mortgage interest homeowners pay each month is combined with several other ones and sold on the market.

For example: Carmen pays $100 in interest per month, and Electra pays $150. The Carmen-Electra RMBS fund delivers a cashflow of $250 per month which equates to $3,000/year. Investors from mutual/pension/charity funds buy these RMBS's to strengthen their portfolio since real estate is considered a solid investment.

While Carmen has great credit (say 700) and a well paying job as a software engineer, Electra is a pole dancer with bad credit (say 520). Electra was able to get a loan and purchase a home because politicians in Washington believed that everybody should be allowed to own a home. They created FHA loans which allowed people like first time homebuyer Electra get government backed loans at 3% down payments. While this is great for those who have great credit and steady jobs, it's terrible for those who have bad credit and unstable jobs.

Anyhow, Electra starts to miss her payments because she broke her leg. The Carmen-Electra RMBS now only produces $100 a month now. This is not good since the Texas public school teacher's pension fund bought this RMBS and now doesn't have th cashflow to pay the retired teachers pension. Gasp! Imagine this on a larger scale where huge defaults begin to occur due to flexible interest rates on people who have bad credit. 20% of the Electras default on their subprime mortgage and cause a plummet on Wall street. Big investment banks and insurance companies which backed these securities go under because they can't deliver on what they promised. Charities lose funding and non-profits go out of business. Pensions get screwed over and default on the payments they owe their pensioners.

Who is to blame? Bush? Clinton? The house and senate? FHA loans were developed during the great depression to stop foreclosures and allow first time homebuyers to own their own slice of the U.S. of A, a very 'left-wing' sentiment. The 'right-wing' didn't do much to stop it because they thought a 1% increase in home-ownership gave a 2% increase in commerce, or something economic along those lines. I think there's plenty of blame to go around, because Washington (which comprises of our elected representatives) voted in majority to allow these things to happen. The left set it going, the right did nothing to stop or slow it down.

One of the things I admire about Obama is his vision for moving forward into the future and not staying consistent with past mistakes. Stop blaming the past and lets apply new principles to new times. Okay, so what new principles must we enact?

I believe we need to revise of a lot of these populist notions of 'givings'. I've put in my hours of volunteer work, and it's not minimum 10 hours you do for national honor society I assure you. It feels good to give, it really does. However, I would like to make a distinction. Lets give to those who got hit with a burden that they did nothing to deserve.

I've begun to revise my arguments on socialized healthcare because I'm sure some of those people did nothing to deserve cancer or multiple scoliosis. It's still a theory of justice (not charity) because people should get what they deserve. I think a guy who smoked for 30 years and got lung cancer should have no access to socialized healthcare. The big girl who eats junk food, drinks excessively, and never visits a gym, shouldn't get a free heart-transplant. That was a choice. The person who is born with leukemia had no choice in the matter. It was genetically inherited and he/she did not deserve it, therefore should receive help. My theory of justice is simple, all I'm saying is that if you shit where you sleep, then you've gotta sleep in your shit.

Anyway, my point is, let's stop this notion that all giving is good. People with bad credit discipline and low incomes do not deserve to own a home. They should rent until they build up their means. People should get what they deserve not what they feel entitled to.

Bush inherited a lot of the countries problems and he kept the country safe after jihadists went after us. I'm sure he deserves a lot of blame for other things, but as I said before, there's plenty to go around.

(Sidebar: If you want to balme him for Iraq, remember, Hillary Clinton voted for the war as well. The majority of Congress was FOR the war, not just Bush. Intel reports suggested there were WMDs there. So you also need to go after the CIA and your own representatives and senators for backing it too.)