Welcome to another edition of Obama’s Fables.
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President Obama’s Grecian Formula Magical Elixer
But President Obama continued to enjoy himself in Las Vegas, a place he advised businesses not to waste their money going to last year, adding to the current depression there. After playing the entire country for years, promising a new era of bipartisanship and postpartisanship to get elected, he continued his scorched earth attack on Republicans, saying:
“And what the other side is offering is basically to go back to the same ideas that got us into this mess in the first place….They are peddling that same snake oil they have been peddling for years. They basically — they spent a decade driving the economy into a ditch….This is a choice between the policies that led us into the mess, or the policies that are leading out of the mess.” [Emphasis added.]
Well, let’s see what got us into this mess in the first place. As explained by Stanford economics professor and monetary policy guru John Taylor in his book Getting Off Track, the housing bubble was stoked to toxic levels by irresponsibly loose Fed monetary policy during 2002-2006, when real interest rates were kept actually below zero for two and a half years. Real interest rates below zero are an outright subsidy for excessive risk, leveraging, and debt, actually paying financial firms to fall into that ditch. This was primarily a failure of the Bush Administration. Out of control monetary policy misleading investors, businesses, and financial firms has been identified by top economics scholars as the root cause of depressions, recessions and the business cycle for decades. Milton Friedman won his Nobel prize for his contribution to that work. Another Nobel prize winner, Friedrich Hayek, was a major contributor to this work as well. All of this is way over Barack Obama’s head.
But the roots of the housing bubble and the financial crisis go back to the Clinton Administration, who with liberal Congressional Democrat allies like Barney Frank, gave birth to the subprime mortgage market as part of the liberal/left “affordable housing” policy. The Clinton Administration joined with the Obama allies at ACORN even back then to use the Community Reinvestment Act (CRA) to pressure banks to break down traditional mortgage lending standards. Clinton’s Justice Department and HUD added to the bonfire with discrimination lawsuits against banks that were reluctant to go along. Fannie Mae and Freddie Mac got with the program to drop their standards as well to cycle trillions in subprime and substandard mortgage backed securities throughout the financial community in America and across the globe.
George Bush and the Republicans actually sought legislation to stop this developing danger and disgrace from 2002-2006. But they were shouted down by liberals including Barack Obama as racists who just didn’t want minorities and the poor to enjoy home ownership. Barney Frank famously said at the time that he wanted to continue to roll the dice on these affordable housing policies, to the shame of his stupid constituents who keep voting for him. The federal government further contributed to the crisis through massively counterproductive mark to market accounting regulations, and regulations enshrining the top 3 credit rating agencies that christened the subprime mortgage backed securities as AAA.
These were the causes that “got us into this mess” — more excessive, runaway, government foolishness — not “Lehman Brothers and AIG,” or “Wall Street,” as in Barack Obama’s greatest Aesop’s Fables contribution of all time, playing us still more. But he continued to play us in Las Vegas with further fairy tales, saying:
“You would have thought that after this financial crisis…everybody would agree that proper oversight over the financial sector would be the smart thing to do — just to prevent this from ever happening again….[T]hanks to Harry’s leadership, we are about to pass this landmark legislation that will end this era of irresponsibility.”
He was talking here about his financial reg reform bill, which he also touted in Racine, Wisconsin with further fabling, saying:
“As we speak, right now, we’re on the verge of passing the most comprehensive financial reform since the Great Depression — a reform that will prevent a crisis like this from ever happening again. It will protect our economy from the recklessness and irresponsibility of a few on Wall Street. It’s a reform that makes sure taxpayers never again have to engage in a bailout for Wall Street’s mistakes.”
But that financial reg reform bill does exactly zero to “prevent a crisis like this from every happening again.” What is needed to do that is fundamental reform of the Fed to mandate sound long-term monetary policy, which Barack Obama does not even remotely understand. Moreover, there is absolutely nothing in the bill regarding Fannie Mae and Freddie Mac, which Sharron Angle, a sweeping reformer criticized exactly wrongly by Obama as wedded to the status quo, has rightly pledged to liquidate. Nor is there anything in the bill to repeal the CRA.
Rather than acting to prevent this crisis from ever happening again, Obama has used the crisis from the start as a bait and switch excuse playing us to push America into the canyon of braindead, long outdated socialism. Instead of snake oil, Obama is hawking us his Grecian formula of magical stimulus beans and record shattering federal spending, deficits, and debt. Remember that was supposed to prevent unemployment from soaring to 8%. Instead we have suffered a year of unemployment around 10%, with Obama’s pal Harry Reid telling us several months ago, “Today is a big day in America. Only 36,000 people lost their jobs today, which is really good.” (Emphasis in original.) More than two years after the recession officially began, to still be losing jobs, as we did yet again last month, is not really good.
Moreover, instead of ending Wall Street bailouts, the Reid/Obama financial reg reform bill institutionalizes federal authority for still more bailouts. Then next year comes chapter 2 in the Obama nightmare, with sweeping, across the board, tax rate increases on America’s employers and investors. Even before that, the double dip recession already beckons. With the Reid/Obama/Pelosi federal deficit already at $1.6 trillion for this year, what will it be in the double dip, which will come next year if not this year.
In both Racine and Las Vegas, Obama made clear that what he thinks promotes economic growth and prosperity is government spending and still more bailouts and corporate welfare, which is what his green energy strategy involves. And he thinks what causes recessions and economic crisis is tax rate cuts on employers and investors, which he doesn’t understand is what gives them the incentives to grow the economy. That is what he is saying in both speeches. And with economic logic like that, the American Dream and standard of living is gone, gone to Greece, and America will, indeed, eventually be just another country. This is where Obama, with his thorough socialist background and education, is taking America.
Barack Obama’s Banana Republic
A man of faith in a godless age is hitting Americans where it hurts.
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