A Conservative Viewpoint
- Obama Uses Crisis
For Liberal Agenda
Article by Bob Steinburg
- Edenton, North Carolina: Cradle of the Colony
Last week President Barack Obama spoke to a joint session of Congress and a prime-time television audience to make a case for his economic stimulus plan. While early, there remains a great deal of skepticism among individual and corporate investors whether this plan will stimulate anything more than our national debt and a liberal agenda.
“Now is the time to act boldly and wisely- to not only revive the economy, but to build a new foundation for lasting prosperity,” Obama said. He added that he will lead the nation from a dire “day of reckoning” to better economic times.
Obama claims he inherited this predicament from his predecessor. Some of it perhaps; but most economists believe the root cause of our economic crisis centers around banks and their liberal mortgage lending practices of the last 15 plus years.
In 1999, Steven Holmes of the New York Times wrote a revealing column that sheds light on our government’s mindset about granting mortgage loans. In the very first sentence Holmes states, “In a move that could help increase home ownership among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.”
Holmes quotes then Fannie Mae chairman, CEO, and President Bill Clinton appointee Franklin Raines: “Borrowers whose credit is just a notch below what our underwriting has required, have been relegated to paying higher mortgage rates in the so-called sub-prime market.” Making home ownership available to more individuals is a noble idea. The criterion for granting these loans however, was fiscally irresponsible, contributing greatly to our current recession and financial morass.
In April `01, President George Bush first sounded the alarm that Fannie Mae and Freddie Mac may not be effectively regulated. In `03, he said the housing problem could become systemic resulting in the failure of our entire economic structure. Later that year he proposed a new federal agency to regulate and supervise Fannie and Freddie. Led by ranking member of the House Financial Services Committee Barney Frank, D-Mass., the initiative was blocked. Frank declared, “We’ve got to stop the sky is falling mentality.” He said them there is “no crisis,” and that we should be encouraging Freddie and Fannie to be doing even more to try and make home ownership accessible to everyone.
In `05, Federal Reserve Chairman Alan Greenspan warned that our nation’s financial system is at “substantial” risk. His claims were rebuffed by Sen. Chuck Schumer, D-NY., who said, “The agencies and their leadership are doing a great job.”
In`06, Sen. John McCain, R-Ariz., along with Sen. Chuck Hagel, R-Neb., and former Sen. Elizabeth Dole, R-NC, introduced the Federal Housing Regulator Reform Act which would have provided further oversight to Fannie and Freddie. It would have established risk base capital tests, additional enforcement actions and penalties, improved reporting procedures and the elimination or modifying of so-called golden parachutes. Sen. Chris Dodd, D-Conn., chair of the Senate Banking Committee, refused to even give the proposed bill a hearing. President Obama, who was serving in the Senate then, did nothing to help get this bill to the floor either.
The Congressional Budget Office not only predicted the recession would end in late `09, but that the stimulus will hurt us in the long run. Yet the Obama administration seized upon the fear factor to try and convince Americans the situation was so dire that Congress had to act now to avoid us falling off a cliff. Ironically, it’s the Democrats who spent the last eight years chastising Republicans for being the fear mongers.
Obama and his all too compliant Democrats in Congress are spending money with reckless abandonment to enact their liberal agenda. The president’s nearly $800 billion stimulus package follows the $700 billion bank bailout plan that former Bush Treasury Secretary Hank Paulson orchestrated last year. Team Obama will oversee $350 billion of those funds not previously allocated. We’re now talking well over a trillion dollars of spending and interest and Obama says he’s not done spending yet.
How much is $1 trillion? Senate Minority Leader Mitch McConnell, R-KY. said, “If you started the day Jesus Christ was born and spent $1 million every day since then, you still wouldn’t have spent $1 trillion.” Using another analogy, a trillion one dollar bills stacked one on top of the other would reach more than halfway from the earth to the moon. Now consider this. Our national debt is projected to exceed $13 trillion by this September. This is absolute fiscal madness.
Columnist Phyllis Schlafly, of Town Hall.com, wrote, “Under the subterfuge of helping the economy, Barack Obama’s stimulus plan legislates vast new spending programs to finance liberal policy goals that are unnecessary and undesirable. The flow of taxpayers’ money will be so gargantuan as to make Lyndon B. Johnson’s Great Society expansion of the welfare state look puny.” U. S. Senate files indicate LBJ’s plan cost $306 billion in inflation adjusted dollars.
With the economy hemorrhaging, this is no time for grand initiatives. Any stimulus money being spent by Washington should be used for one thing only: creating jobs. This stimulus package misses the mark. Go to www.Stimuluswatch.org to see for yourselves.
Had Congress, Democrats and Republicans, not ignored the rampant warning signs and calls for reform, it is likely we could have averted the enormity of this fiscal calamity. The fact that they did ignore them makes the timing, scope and direction of the Democrat’s so called “recovery program” even more suspect.
Today I checked my 401K and it looks more like a 104K. The Dow appears perilously close to dipping below 7000. To paraphrase an old Army Air expression: As a nation we may have already departed the slippery slope and quite possibly are entering a terminal velocity Free Fall.
The problem with Bob's analysis is that we have a huge segment of our population that is mesmerized by Barack Obama. They have bought into the concept that Republicans are evil capitalists and are unable to recognize the totalitarian lies being sold to them at this time. They will support anything Obama says and will not listen to anyone like Bob who points out the irrationality.
I wonder what would have happened if George W. Bush had not listened to Henry Paulson and Ben Bernanke last year when this crisis started? If it had been Ronald Reagan, I am sure he would have resisted the panic that they predicted and that Bush accepted as the consequence of not acting. George W. Bush could not resist doing something because he believes in big government, just as Barack Obama does. He also is such an ego-maniacal man that he could not resist the idea of stopping the panic as his last great move, going out a hero. As a result Bush created the "perfect storm" for the socialist Barack Obama to use to create an economic depression from what would have been a minor recession. The fear that Bush perpetrated allows Obama to gain huge power in the process of "fixing" Bush's mess. Way to go George. You could not have done a worse job of handling this crisis.
The last time our nation was in severe economic distress was when Jimmy Carter drove our spending as a percentage of GDP above the 21% level. Since then it has been continuously falling except during the George H.W. Bush years. Barack Obama is about to make that Carter economic idiocy look almost sane. The damage to individual freedom will probably never be undone. Why would the most free and richest nation on earth abandon the economic system that made them free and rich? Are the citizens of America completely insane? It appears, unfortunately, that the answer is yes.