Source: http://www.ibdeditorials.com/IBDArticles.aspx?id=306716270814143
By INVESTOR'S BUSINESS DAILY | Posted Friday, September 19, 2008 4:20 PM PT
Election '08: Barack Obama's quasi-presidential address offering a four-part solution to the financial crisis offers little more than veiled pork-barrel programs. It signals a mind more focused on elections than answers.
Read More: Election 2008
How else can one explain why, against all data and market indicators, Obama's painting the American economy as gloomily as possible?
Obama seems to think that if he can persuade voters the sky is falling, his halo as savior will be brighter, even if he doesn't have a credible grasp of economics. That's why he's begun a nonstop verbal drumbeat of misery on today's difficulties, never mind the facts.
And what would Obama do instead? We're beginning to find out. In a four-point action plan Obama presented on Friday, he goes beyond "hope" and "change" oratory and moves on to what really matters to him: the big-government spending he's been selling all election.
And here's what Obama proposes:
• Point one, Obama calls for subsidies to "working families" to beat high food and energy prices. The problem: High food and energy prices won't be helped by subsidies, but by more supplies. The real solution is to force a Democratic Congress to allow domestic drilling for oil. Thus far, Obama isn't even "present" on that one.
• Point two, dubbed "mutual responsibility and reciprocity," calls for banks to subsidize bad borrowers to "protect homeowners and the economy." This would eliminate personal responsibility. Demagoguing false details — such as about bankers getting golden parachutes, instead of 25,000 of them losing their jobs — Obama insists the solution is simple: Banks shouldn't foreclose on delinquent home buyers. Obviously, he hasn't heard of how bad loans drained Japan's economy of its vitality for a decade.
• Third, Obama seeks "new oversight and regulations of our financial institutions." That means forcing new bureaucracies and regulations into the private sector, the very phenomenon that has made navigating our health care industry such a delight.
• Fourth, Obama seeks to empower unelected foreign entities to the same "globally coordinated (rescue) effort." But Bernanke and Paulson have already done the heavy lifting, as the rest of "the world" has done next to nothing. One more global bureaucracy won't make America's financial system any healthier.
Obama makes a final point by blasting the failure of "common-sense regulation and oversight," to the financial system.
He ought to bring this up with fellow Democrats in Congress. In the 1990s, Rep. Barney Frank blocked key reforms even as he took campaign cash from banking interests. In 2004, President Bush attempted to revive the reforms, but Democrats blocked them.
Today's bank crisis isn't due to the inherent evil of the private sector, as Obama claims. It's due to Democratic leaders who were bought off by political donations and hostile to reform.
Obama, curiously enough, is one of the top recipients of cash from Fannie Mae and Freddie Mac. Small wonder, then, that his main election argument would expand the scope of government by using the banks' subprime woes as leverage.
No comments:
Post a Comment