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Obama White House loses powerful psychology tool
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Editor, Manteca Bulletin,
The Obama White House has lost its most powerful tool for fixing the economy.  For the Fed to manipulate the economy, one of their most powerful tools is psychology.  
All the Fed has to do to change economic conditions is to announce that they are going to take action if, say, inflation is too high.  Very little actual action is needed in most cases to bring about the changes they desire.  Fed watchers report their speculations regarding the Feds concerns or possible actions, and the market changes in anticipation.  

Whether it is the housing market, stock market, energy market, or main street market, the psychology of herd mentality is powerful and pervasive to cause the desired results. For the past 8 years, the Democrats have constantly stated “the failed policies of Mr. Bush” is the cause of all of America’s problems.  On any bad news, you hear the Democrats stating how bad things are.  Even in 2006 – 2007 when this country had 4.6% unemployment rate, which was the best in over 50 years.  Excluding 1997 – 1998 which was down to 4.0%.  The plan for Democrats to gain control was to create a universal atmosphere of “Doom and Gloom”, which worked only too well. Last year during the election, Mr. McCain stated that the economy was basically sound. The Obama campaign team and Mr. Obama himself picked up on that statement and carried it to his rallies.  One could hear loud and clear that his supporters disagreed with Mr. McCain while agreeing with Mr. Obama that the economy was in bad condition.  Those were ordinary rank and file Democrats.  In the past I have also stated that the economy was sound and that we are in a financial crisis, not an economic crisis.  

That brought condemnation from Mr. Baca letting readers know that I am delusional.  Last week the Obama White House proclaimed that the “economy is sound despite the temporary “mess it’s in”.  Instantly this calls into question his ability to understand and solve this country’s economic woes, or his integrity during the elections.  How can the economy be more sound now than in 2008?  Mr. Obma had to quickly refrain from those comments.  Mr. Obama is unable to use his most powerful tool of psychology to get a herd mentality that the economy is sound.  If he does retreat from his “bad” economy stance, he will be politically attacked.  I, for one, will use the “I told you so” position and rip into Democrats.  If the recovery takes too long then the Democratic Party will start getting the blame for not fixing the economy.  In this day and age, impatience is the attitude.  Remember that after two weeks the media was talking about the Iraqi war being in a quagmire?  If the population does not feel the Democrats are solving this nation’s problems within the next four months, then the Democrats are going to feel the heat.  The Democrats have another issue that is hurting them.

 So far there is an overwhelming amount of objective evidence pointing to the actions of the Democrats for causing this banking crisis.  I have not seen any objective evidence in the news stating otherwise.  None of the Bulletin’s Democrat readers have supplied any objective evidence either, only accusatory comments.  Without the psychology affect, this crisis will be perceived to be longer.  With the Republicans virtually out of power, all negative actions lands squarely on the Democrats.  This will cause the population to start questioning the philosophies of the Democrats.  The actions of Mr. Dodd (D) and the AIG bonuses is big news.  People are angry at Mr. Dodd and his fellow Democrats.  If Fannie and Freddie keep making sub-prime loans, Americans will recognize the dangers to the economy and blame the Democrats for failing to stop this mess.  If the rules are tightened then the economy will not pick up as fast.  It is time for you, Democrats, to “Man Up”, take the criticism and do what it takes to fix the banking crisis without worrying about what is said.  I have for the past several years, now it is your turn to be in the hot seat.
Scott McComas
March 22, 2009