Friday, December 4, 2009

Job Summit or Just More Blame Storming?

President Obama just finished a speech in Pennsylvania. His speech was meant to inspire confidence in his economic agenda. What economic agenda? Well, we are all still waiting to hear. The illusion of a jobs summit that was attennded mostly by Union leaders, and ivory tower academics with a few company CEO's (who happen to be Obama supporters) was political theater meant to dramatically signal to the country that he is paying attention to the jobless rates and overall problem with economic growth.

It's an excellent strategy. Not only do these high profile acts project the illusion of leadership on the economic front, it also takes attention away from the sausage making happening on the floor of the Senate. The health care bill, the presidents real priority, is in the process of being butchered with amendments, favors, and the usual pork that the president promised would not plague Washington anymore. Nothing to see here.

The real disappointment in the presidents speech was his walk down memory blame. In describing how the housing bubble happened, he returned to the fairy tail about greedy Wall Street fat cats giving loans to people who just should not have received loans. He admitted that everyone was to blame, because everyone was making money. Accept he didn't mention the governments role in the mess, and those that do not learn from history are forced to repeat it. Back in May I posted about what still seems to be the pink elephant in the corner:

Prophetic Pronouncement from WSJ

And he has people in Hollywood helping to place the blame on anyone but the government.

Revisionist History

giving loans to those who they knew could never repay
Now, he's right, of course. But, by not giving you the whole story, or by not sharing the blame with bad govt policy, and lack of enforcement of existing regulations, he effectively revises history to place all of the blame on Wall Street and the Republicans.

Never mind that it was the Community Reinvestment Act signed into law by Jimmy Carter which was

designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.[1][2][3] Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.
Never mind the  Financial Services Modernization Act signed into law by President Bill Clinton

which repealed part of the Glass-Steagall Act of 1933, opening up the market among bankingsecurities companies and insurance companies. The Glass-Steagall Act prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and/or an insurance company. companies,
 Never mind that in September of 1999

the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

 In that same New York Times article, there were those who were already sounding the alarm.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
And in a further illustration of the Presidents ignorance about job creation he went on to explain how "Companies are still hesitant to hire", and talked about how we need to make them hire people.

Mr. President, you will not see any significant burst in job growth until you put health care and the cap & tax bills behind you. Comapnies are sitting on any cash that theyhave until they know how much you plan to take from them. If both initiatives fail, then you will see an immediate increase in job growth. If both pass, well, there just won't be that much money left for companies to spend on new employees. It's pretty simple.

oh yeah, and will somebody tell the President that Barney Frank is still trying to give loans to people who don't deserve them?

You got to Roll Me......

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