Saturday, February 21, 2009

Obama's Weekly Address

The most important news from President Obama's weekly address is that employers will be directed to withhold fewer taxes in paychecks. According to the administration, a "typical" family will take home $65 more every month after April 1st. The speed of this adjustment is impressive and wage earners will be able to determine the impact for themselves soon enough.

Next week President Obama delivers his first address to a joint session of congress. Thematically, the administration is attempting to project each policy as a component to an overall comprehensive economic recovery strategy. To date, we have seen three pieces of this strategy:
  • The stimulus package.
  • A housing plan to help nine million homeowners struggling to meet their financial obligations.
  • Continued bailouts for America's largest banks.
In my opinion, the administration's stimulus package and housing plan are conceptually on target but far too limited in scale. Both will help reduce the bleeding which is some consolation. As I’ve posted previously however, President Obama’s failure to leverage his political capital more effectively and aim higher is disappointing.

With respect to continued bailouts for banks, Obama’s strategy to repair our financial system is ill conceived and nationalization only a matter of time. Presently, Treasury Secretary Tim Geithner and his fellow plutocrat, economist Larry Sumners are focused on reviving large financial institutions such as Citigroup. Nobody with any clout in the body politic seems willing to admit the truth: hyper sized banks are irredeemable and bailing them out a waste of precious funds.

Instead our economic strategy should be focused on restoring smaller community banks as the source of credit and loans. Community sized banks have better track records with lending and are more inclined to promote the well-being of their localities. Both presidents Bill Clinton and George W. Bush empowered hyper sized banks such as Citigroup and Bank of America to swallow community sized banks.

Predatory conservatives accuse liberal Democrats of preferring “big government” to more sensible solutions. The real truth however is that predatory conservatives have destroyed the middle class with their fetish devotion to expanding the power and reach of financial institutions on steroids. Sadly, Democrats have been enablers to this madness.

Alas, financial industry careerists such as Timothy Geithner are not equipped intellectually or ideologically to facilitate the systemic change our financial system truly needs. Trying to “reform” our financial system with promises of better oversight is analogous to allowing a murderous pedophile to work in a daycare center and assuring everyone that the terms of his parole will keep everyone safe. Yet the corporate media will continue to spin bailouts of these economic barbarians as the global economy’s only answer.

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