While kudos should be given to the Fed for trying to do whatever it takes to shore up the banking system, what is a bit more worrisome is how both Barack Obama and Hillary Clinton approach the problem. Obviously they started out by blaming President Bush for these problems.
According to an AP report:
"Now we are in the soup and we better get ourselves out of it before the consequences get drastic," Democratic presidential contender Hillary Rodham Clinton told reporters. Barack Obama said: "History will not judge President Bush kindly for his failure to act in a way that could've prevented or alleviated this economic crisis."
Does Obama think that the President could have prevented the entire economic crisis, had he acted differently? In fact I postulate that one of the major reasons that Wall Street is in the current situation is because of a precedent taken 10 years ago by then Treasury Secretary Robert Rubin. He bailed out his Wall Street buddies after they were set to lose billions in bad investments in Asia, among other places. Go figure that after they get saved once, they go ahead a decade later and continue to make investments without taking into account risk. They knew that they could get away with it because they would get bailed out. And guess what? They are going to get bailed out.
The fact is that the Fed, by injecting liquidity, is doing exactly what it should be doing to try and get the banking system back on track. Many economists believe that had the same strategy been implemented in 1929, there never would have been a Great Depression. Back then they took money out of the system and companies went bankrupt. The Fed is making no such mistake this time.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 3/17/08.
Reader Comments (Page 1 of 1)
3-17-2008 @ 6:05PM
Dems suck the big one said...
Bush Bashing from racist Obama, what a surprise. the man is educated but stupid on the economy. the only idea he has that makes sense is the one he stole from Pres. Bush regarding the creation of jobs from r&d into biofuels and other alternative energies. Of course he claims he will create 5,000,000 jobs from this industry, which if are created will happen regardless of who is president thanks to the market based economy we have, which he wants to penalize thru raising corp. taxes--stupid B Hussein Obama
3-17-2008 @ 7:08PM
Jeff said...
I can only hope both these illogical arguments are based on the hatred they're seethed in.
3-17-2008 @ 8:36PM
John said...
If our government is a problem for you, perhaps you should move to land that is not under its jurisdiction.
3-17-2008 @ 8:58PM
Sheldon L said...
However, the government did allow highly suspect lending standards to exist, and extreme amounts of leverage. These two factors more than anything else created the problem.
We also allowed the risk vs reward scenario to be played out so that those creating the risk and receiving the rewards were not actually at risk -- there is the primary problem, the disassociation of risk from those creating the risk, and paying huge bonuses to boot. There is plenty of blame to go around but if it happens during your watch...
It has been argued that President Bush had accomplished little when he ran for office, partially true, but Obama can not claim to have accomplished much of anything, either. If someone wiser than I knows of anything Obama has accomplished to date please share it.
3-17-2008 @ 11:45PM
jscotthhi said...
Uh, John,
Kind of a stupid comment don't you think?
You don't like it, so you leave? What are you saying to the colored folk that have been complaining about the American government all these years? Go back to Africa?
3-18-2008 @ 12:33AM
norman spalding said...
it is clear fiscal issues of the united states started and end with he federal reserve and the 'citizens' lazy effort or know effort at replaceing the proceedure used to convelude the representitive system and maintain the theft of the fed!!!none of the above on ballot to the disqualification of candidates for ever when none of the above wins the polling!!!the congress and the senate by functional disfunctioning are out dated and voted out of existance now by citizen dedicational accomplishment at canvassing to referendum!!!
3-18-2008 @ 1:20AM
John said...
No, I don't think it was stupid at all. Comparing the state of the American business regulatory environment with the various complaints African Americans may have with their government, on the other hand, is stupid.
The man is holdin' ExxonMobil down?