OBAMA RESPONDS TO THE LEFT
If you didn't see Obama's speech on the economy today, you really should. If interested, you can see it here. Anyway, I thought it worth mentioning the defense of his economic plan from some on the Left like Paul Krugman. Here's part of it ...
On the other hand, there have been some who don't dispute that we need to shore up the banking system, but suggest that we have been too timid in how we go about it. They say that the federal government should have already preemptively stepped in and taken over major financial institutions the way that the FDIC currently intervenes in smaller banks, and that our failure to do so is yet another example of Washington coddling Wall Street. So let me be clear - the reason we have not taken this step has nothing to do with any ideological or political judgment we've made about government involvement in banks, and it's certainly not because of any concern we have for the management and shareholders whose actions have helped cause this mess.
Rather, it is because we believe that preemptive government takeovers are likely to end up costing taxpayers even more in the end, and because it is more likely to undermine than to create confidence. Governments should practice the same principle as doctors: first do no harm. So rest assured - we will do whatever is necessary to get credit flowing again, but we will do so in ways that minimize risks to taxpayers and to the broader economy. To that end, in addition to the program to provide capital to the banks, we have launched a plan that will pair government resources with private investment in order to clear away the old loans and securities - the so-called toxic assets - that are also preventing our banks from lending money.
So, I don't know if Obama is right or not about this stuff, but he sure sounds like he knows what he's talking about when you listen to the speech. He's a very impressive man.
Labels: barack obama, economy
posted by Trekking Left @ 12:12 AM
9 comments
9 Comments:
The left's problem with the Obama/Geithner/Summers's approach to Wall Street no doubt takes many forms, including political and ideological suspicions. The bottom line, however, is that the administration and the left fundamentally disagree on the problem.
The Obama team sees the problem as a breakdown in the system. Thus they want to get the system running again and therefore see the involvement of hedge funds to clear toxic assets and get lending happening again as a good thing. Those of us on the economic left see it as a problem with the system itself and want the administration to seize this financial crisis as an opportunity to change the system--mainly to rebuild the wall between hedge funds and other exotic and risky Wall Street investment practices and regular old Main Street banking, mortgages and such.
Obama's medical metaphor says it all. He assumes some healthy Wall Street financial body that his government aims to get healthy. The left thinks that that healthy Wall Street financial body is itself toxic.
None of this is to say that I don't respect and greatly appreciate Obama, his intelligence, his impressiveness, or even his honest concern for regular Main Street Americans. He may even have a plan to rebuild the wall between Wall Street investments on one side and regular mortgage and other Main Street banking on the other. But until he starts rebuilding that wall, and until he stops feeding tax money to Wall Street instead of Main Street, I can be angry, and express my anger.
Thanks for that fine comment, Patrick. Now all I have to say is "I agree with Patrick."
WHAT'S BECOME OF US?
"Those of us on the economic left see it as a problem with the system itself and want the administration to ... rebuild the wall between hedge funds and other exotic and risky Wall Street investment practices and regular old Main Street banking, mortgages and such."
I believe that's what he will be doing in the coming moths with their banking regulation plans.
"...I can be angry, and express my anger."
Clearly :) ... I would, however, recommend that you watch the whole speech; I think it will make you less angry.
hello t.l.,
He isn't prepared to take on the entire rotten financial system. It will take the destruction of the usd for that. the bankers are spoiled children, who tell the parents what to do. They are completely without oversight of any kind. No-one goes to jail, not even mozilo. If what mozilo did was legal then the wild west is back on. The whole gubbermint and fedres use enron accounting principles now. I appreciate that you want to believe in hopey, so I won't bash him anymore. Best.
Here is a decent idea, if anything it doesn't go far enough.
Edgar - Yeah, the high speed rail thing is a great idea, but I agree that it doesn't go far enough.
You know, I've been to many other coutries and am always impressed with their public transportation systems and always sad for us. It's just really pathetic how addicted to cars we are over here ... espcially in California.
hello t.l.,
Any high speed rail system should go coast to coast, and along the GOM one should be able to travel from houston to tampa. I worry that immigrants will get all the construction jobs and that the trains will be built in Japan or Germany. When I was in grade school we learned about the benefit of value added manufacturing. I guess now we have the bubble eCONoME so we don't need that anymore. Honestly, things might seem like they are getting better for awhile, but I never expect the usa middle class economy to ever recover. Never.
don't know about you, but I believe i've got a gnarly hopeover.
which is good. It means the next step is action. And Obama has said publicly, as FDR once did -- "I agree with you. now make me do it."
He's just one man, and he cannot get the things done that he wants to, especially considering the opposition -- without a hell of a lot of very vocal pressure (read: political cover) from all of us.
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