Research

In an interview which aired Sunday night on CBS’ “60 Minutes”, President Obama chided the nation’s largest banks, saying he did not run for office to be “helping out a bunch of fat cat bankers on Wall Street.” The President spent much of the interview laying the blame for the financial collapse at the feet of those on Wall Street.  This harsh language was used just a day before he planned to meet with these very same bankers in order to try to persuade them to increase lending to small businesses. 

What is confusing about Obama comments is that he criticized the reckless lending practices of the major banks on Sunday, only to turn around and urge the CEO’s of those banks to resume the same reckless practices on Monday.

Government forced sub-prime lending, which most notably took place at the end of the Clinton administration was one of the major causes of the financial crisis.  Regulators are advising banks to increase capital and cut back on lending if there is a likelihood of default, yet Obama apparently thinks it is better to force banks to engage in practices that could very well put our economy at risk again, rather than learn the lesson of history and seek a new approach.

Perhaps we shouldn’t be too surprised that Obama would be push banks to repeat the same failed policies, after all he's now pushing Stimulus II despite the failure of Stimulus I.  Once again, Obama is clinging to the erroneous philosophy that government knows best, while embracing the flawed borrow and spend policies that will not help our economy recover and grow.