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March 17, 2009 | 9:32 pm
On the Credit crisis, Obama Needs to Change Course
Posted by Raphael J. Sonenshein
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So far, I think Obama has done a tremendous job as president. He has now gotten two hugely important bills through Congress, the stimulus package and the budget, and has made signal efforts to open up stem-cell research and to overturn various ill-advised Bush orders and policies. He is already on track to be the most successful Democratic president in domestic policy since Lyndon Johnson.
But I have to tell you that I do not think he has the banking and credit thing down yet. I am surprised, to tell you the truth, that this very smart guy with his extraordinary staff and deep political base, has lost hold of an issue that could have such a profound impact on his presidency.
Ever since Obama chose Tim Geithner and Larry Summers as economic gurus, and followed their advice instead of his political advisors Rahm Emanuel and David Axelrod, and his other finance guru, Paul Volcker, he has been at sea. Beginning with Geithner’s evasive and opaque testimony to Congress, it is clear that their priorities are all messed up. Day after day, the Geithner-Summers team has served Obama badly, and it’s up to Obama to either get rid of them or make them do the job.
Fundamentally, they are treating the banking community with kid gloves instead of treating the banking crisis as something that affects us. This has to be flipped around. The government has tons of clout but the inside crew that has Obama’s ear is terrified of insulting the bankers by using it. Instead, they allowed this to become an irrelevant debate about “nationalization.” This is an appalling lapse of both policy and politics.
And we need to get this right, because the next big battle is to take on the credit card crisis. Are we going to let these companies gouge us into a Depression because otherwise they might be unhappy? What chance is there that this team with these marching orders (or lack of orders) is going to keep credit card companies from jacking up interest rates and reducing credit during a recession? Are we going to hear that if we push them too hard, we might (gasp!) lose more of the “best and the brightest” minds in the credit card business, as we have heard about the banks and insurance companies? Whatever Obama does to straighten out his banking team will pay big dividends when the credit card issue reemerges.
Throughout all of American history, the source of populism has often been the banking and credit system. You don’t have to be a demagogue to understand that this is real stuff to average Americans. You just have to think of Harry S Truman, and his feisty attitude that while the special interests have most of Washington, the people only have the president. In every other area of domestic policy, Obama has shown that he understands that we need a bottom-up approach to recovery. The banking issue has been his blind spot.
The AIG scandal on bonuses, with the bipartisan outrage it has generated, gives Obama a precious chance to start again, but to do so will take more than a press conference. He has to either fire his economic team or completely change their marching orders. Obama has indicated his admiration for the FDR approach of experimentation. This is not the time to dig in his heels on a policy that is not working. Now is the time to once again prove his strategic effectiveness by changing course.
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Greed and dirty foul money continues to infect the land as all kinds of schemes continue to defraud the poor. Meanwhile the rich the chief executives receive bonus payments for nothing. Stimulus payments are only seen in those that need no stimulus as they need no social programs to eat, sleep or for the basic needs of human existence. However rest assured God needs nothing material.
OK, we get it. You love Obama, and you think that he “has done a tremendous job as president.”
His appeasement of Iran has failed. The stock market had continued to spiral downward. And we are still waiting to understand what his economic plan is.
We elected a man with no previous executive experience who appears to be naive and inexperienced who resides over an administration which is increasingly perceived as incompetent. His top priorities has to be the economy, and so far has has not been able to fill 17 top positions in Finance.
Wake up and spare us the BS.
Im agree with two comments above. He hasnt really shown his “skills” yet.
Gives Thanks, Very fascinating read, you should be dramatic of your web logs. I’ve been genuinely delighting developing up your situations from meter to time. Looking forward to understand your future positions
Many wonderful selective information, thanks for partaking. Testament definitely be back more often….
Boost Credit Score
Actually, yesterday, Obama administration called for the end to unfair practices in credit card industry like the increases of retroactive interest rate for any reasons, late-fee traps that may penalize debtors with middle-of-the-day or weekend deadlines and teaser rates which last less than 6 months.
to be honest that’s a good sign
Okay, Raphael, you’ve proved you’re a liberal or progressive. You look at Obama, Johnson, and FDR through a different lens than I do. Look at what Obama is doing structurally to the country for a change. Imagine for a moment that you believe in most of the U.S. Constitution, the Declaration and the Founders. Through that camera you see a different Obama. Sure, he will do “some” good, like on credit card reform. But overall, he grows government while weakening people’s power to choose for themselves. He’s a statist. Case in point, health care. I’m a senior and he’s for rationing my health care. Cap and Trade: he’s for taxing me so much more I won’t be able to remain in my current house or run a business in America. Then in 50 years people can look back and say, the world is electrical. We got rid of oil and carbons. Wasn’t Obama great. Put him down as one of our greatest presidents because he stuffed it down our throats when we didn’t want it.” That’s not what America is about, it’s about “all of the above” approaches. Don’t you remember, Raphael, we’re a mixture of Jews, English, Germans, Russians and every race on earth. We’re not all black, white, or Chinese. We came here for freedom, not to have a guy make a reputation on us and hang us out to dry like this man Obama is doing.
Don White
Thank you for this.
Nice read… I fully agree
Credit card industry like the increases of retroactive interest rate for any reasons,late fee traps that may penalize debtors with middle-of the day or weekend deadlines and teaser rates which last less than 6 months.
I agree that he has done a great job as President and feel that he has made some very impressive strides. I can say, however, that there does seem to be a need to provide more jobs and offer up some solace for the job market as well.