We hear a lot about the effect of the economy on small business but this video says it better than any other I have seen. Bill’s Barbecue was an institution in Richmond, VA for 82 years but it couldn’t survive four years of Obama’s economic policies.
The Wall Street Journal takes a look at President Obama’s proposed mortgage rescue plan and finds that it could create far more problems than it solves:
President Obama yesterday announced his plan to prevent home foreclosures, saying he wanted to be “very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans . . . And it will not reward folks who bought homes they knew from the beginning they would never be able to afford.”
We really do wish he were right. In fact, the details released yesterday suggest the President’s plan will do all of the above. The plan will help some struggling homeowners. But by investing in failure, the Administration will also prolong the housing downturn and make financing a home purchase more difficult for future borrowers. Meanwhile, the plan isn’t likely to slow the continuing decline in housing prices.
The President’s plan is predicated on the false belief that everyone deserves to own a home. The fact is that not everyone can afford to own a home. The efforts of Fannie Mae and Freddie Mac to make it easier for people to buy homes they could not afford are at the heart of the current financial crisis. Unfortunately, the President’s plan does nothing to address this fundamental issue and instead just prolongs the crisis and leaving taxpayers on the hook.
As CNBC’s Rick Santelli correctly points out in this clip, this is an example of government rewarding bad behavior. Unfortunately it’s the 92% of honest, hardworking Americans he refers to that will pay the price.
As we approach the end of George W. Bush’s presidency, many postmortems will be written to explain how horrible or wonderful the President performed depending on point of view. No doubt many liberals will be quick to proclaim Bush as the worst president ever. But he did in fact have many achievements.
I believe that history is likely to judge him far more kindly as time passes. President Bush’s lasting legacy will be the War on Terror. His response to the 9/11 attacks reset forever our approach to terrorism. Unless President-elect Barack Obama totally dismantles the anti-terrorism measures adopted under President Bush (and I don’t think he will), President Bush will long be remembered as the President who forever changed America’s approach to terrorism.
But there are those critics of President Bush who will bring up the economy as evidence of malfeasance on the part of the outgoing President. A couple of factors to consider: (1) the foundation for the economic collapse was laid back during President Clinton’s time in office when regulations restricting lending practices at Fannie Mae and Freddie Mac and (2) the financial crisis occurred so late in President Bush’s term that there was not time for him to see the crisis to a conclusion.
Come January 20th, the economy will be Obama’s problem. It will be the issue most likely to dominate his presidency much as the Great Depression did for most of Franklin D. Roosevelt’s time in office. The best way that President-elect Obama can succeed is to realize first that blaming President Bush will get him nowhere.
Mr. Obama has stated on several occassions that FDR has been a role model for him as he prepares for the presidency. He would do well to remember that Roosevelt’s economic policies did more to prolong the Great Depression that to relieve it. Unfortunately for him, Democrats have never met a government program that they didn’t like. Unless Mr. Obama can demonstrate a willingness to stand up to his party and try to relieve the economy through other means besides more spending we may be in for tough economic times for many years to come. That will be the legacy that will dog President Obama, not President Bush.
The historical model that the Democrats are choosing to hold up as they ponder our financial crisis isn’t Harry Truman’s Fair Deal or Lyndon Johnson’s Great Society. It is Franklin D. Roosevelt’s New Deal. At least three economic reforms under discussion now were also central in the New Deal package. Trouble is, these reforms didn’t necessarily work well when they were first tried – and some failed outright.
Even more than specific New Deal projects, Obama and his fellow Democrats are evoking Roosevelt’s leadership style. In school, we learned that it was FDR’s personality that pulled the country through the Depression. If only, the suggestion is, we can have a strong enough leader, Americans will also find recovery again. We need some “bold persistent experimentation” of the Roosevelt variety.
There is evidence, however, that FDR’s very strength was a negative, because he used it to give himself a license to do true experimenting. In his second inaugural address, FDR said that he sought “an instrument of unimagined power for the establishment of a morally better world.”
No one knew what it meant, and markets were terrified. Everyone feared FDR would regulate or prosecute them next. Businesses refused to invest. The 1930s’ second half proved frustrating for the country: The economy was always recovering but never quite recovered. The Dow didn’t get back to its 1929 level until the mid-’50s.
