US: Obama speaks on the Economy

During his speech Thursday at Cooper Union in New York City, Obama spoke of financial equality, saying that the country’s current unequal distribution of excess is “no accident.” He said that regulation is needed to ensure fairness.“The American experiment has worked in a large part because we’ve guided the market’s invisible hand with a higher principle,” said Obama. “A free market was never meant to be a free license to take whatever you can get, whenever you can get it. That’s why we’ve put in rules of the rope, to make competition fair and open.”

To fix the economy, Obama proposed relief for homeowners and an additional $30 billion stimulus package. He also criticized the presumptive Republican presidential candidate. “John McCain recently announced his own plan, and it amounts to little more than watching this crisis happen,” Obama said.

Clinton also slammed McCain while outlining her plan for the economy during a campaign stop in North Carolina. “I think we have had enough of a president who didn’t know enough about economics, didn’t do enough for the American middle class,” she said. Speaking in Raleigh, Clinton focused on job security. She also railed on the Bush administration’s tax cuts for corporations and the wealthy, as well as criticizing war investments that she says are hurting the working class.

“The Bush economy is like a trap door,” said Clinton. “Too many people are one pink slip away, one missed mortgage payment away, one medical diagnosis away from falling through and losing everything.” The New York senator says she will close tax loopholes for companies that outsource jobs, give small business tax incentives, create millions of jobs in the field of renewable energy, and provide more money for workers getting an education.

Labour expert Jonathan Tasini commented:

So, my take on Sen. Obama’s economic speech. On the whole, I’d call it bland. One thing I try to do is not watch his speeches on policy–if I want to fall down in the aisle weeping, as so many people seem to do, I’d rather watch “Old Yeller.” If you read the text, you get a fairly not-original description of the failings of the markets, mixed in with a little flowery rhetoric (that’s new, huh?). Then, there are a few proposals that are not particularly objectionable and are just fine:

1. “The Federal Reserve should have basic supervisory authority over any institution to which it may make credit available as a lender of last resort.”

2. “There needs to be general reform of the requirements to which all regulated financial institutions are subjected. Capital requirements should be strengthened, particularly for complex financial instruments like some of the mortgage securities that led to our current crisis.” Fine.

3. “We need to streamline a framework of overlapping and competing regulatory agencies” Yawn.

4. “We need to regulate institutions for what they do, not what they are. Over the last few years, commercial banks and thrift institutions were subject to guidelines on subprime mortgages that did not apply to mortgage brokers and companies. It makes no sense for the Fed to tighten mortgage guidelines for banks when two-thirds of subprime mortgages don’t originate from banks. ”

5. “We must remain vigilant and crack down on trading activity that crosses the line to market manipulation.” Did Eliot Spitzer give him that line?

6. “we need a process that identifies systemic risks to the financial system.”

7. “To reward work and make retirement secure, we’ll provide an income tax cut of up to $1000 for a working family”


Here are the worrisome parts of the speech–and the parts that show us that we aren’t really seeing a serious critique of the economic framework crushing Americans:

Criticizing the Administration, he says, “A complete disdain for pay-as-you-go budgeting – coupled with a generally scornful attitude towards oversight and enforcement – allowed far too many to put short-term gain ahead of long term consequences.” So, the likely nominee of the Democratic Party is repeating the idiotic idea that we should embrace balanced budgets? That is sad. The problem is not that we should not have deficits–it’s how we spend it. As Obama rightly points out (and others have long before he has), the Iraq war will cost us at least one trillion dollars–likely two trillion dollars. Democrats should be saying, “we’d be happy to run a deficit if we were putting in place a single-payer health care system.”

More nonsense: “There were good arguments for changing the rules of the road in the 1990s. Our economy was undergoing a fundamental shift, carried along by the swift currents of technological change and globalization. For the sake of our common prosperity, we needed to adapt to keep markets competitive and fair” and “The evolution of industries often warrants regulatory reform – to foster competition, lower prices, or replace outdated oversight structures.” This is just a sop to the business community–it’s the framing of the wrong problem. Our economy only underwent a fundamental shift in where power and wealth was located, not anything having to do with globalization that required the releasing of corporations from any control by our government.

He also proposed his own “commission” to investigate the mortgage crisis–but no word on who would run that commission. Would it be, like the proposal submitted by Sen. Clinton, run by the same people who got us into this mess? The Robert Rubins and Alan Greenspans of the world?

On the whole, I was underwhelmed. Read it for yourself.

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