Maybe, maybe not. The fact that Obama’s plan is screwy doesn’t mean that McCain’s plan was wise, although the promised corporate tax cut might have had a positive effect on companies considering RIFs and slashing capex.
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Tax cuts don’t mean anything when there are no profits to tax.
There are no profits because the plankton that feed the entire world economy (U.S. consumers) are dying off at an unprecedented rate. They are dying off because housing prices stopped rising…and their access to tens or hundreds of thousands of dollars per year is no longer there.
The plankton needed access to massive credit because their wages have been falling/stagnant for many years (the “stagflation” situation was exacerbated by the cost inflation that resulted from all the credit expansion).
This was a CREDIT bubble, not a housing bubble. ALL assets were affected on the way up, and ALL assets will be affected on the way down. This goes for stocks, bonds, real estate, commodities, precious metals, etc. Look at the price movements of all these assets since 1982, and then look at the parabolic move from 2000-2007 (the stock market obviously declined during the dot.com bust, but rallied back rather quickly). Look at the credit markets over those years, and you will see a direct correlation.
Add to all this the unregulated derivatives that were betting on all these credit movements (by an order of magnitude…and then more derivatives that were indexed to the other derivatives, and so on…), and you will understand why we are where we are right now.
This has nothing to do with Obama…nothing at all. While there are politicians on both side of the aisle who are largely responsible for blocking regulation of these markets, it is the Republicans who came out publicly in support of massive deregulation of the financial industry.
