Spread the wealth how.? Look at his past. Obama in this video, addressing his work with ACORN litigation against the banks and relating to the Community Reinvestment Act and the failure of Freddie Mac and Fannie Mae, as they relate to the current real estate and financial crisis, states that, and I quote:
"Subprime lending started out as a good idea, helping Americans buy homes who previously could not afford to. Financial institutions created new financial instruments that could securitize these loans, slice them into finer and finer risk categories, and spread them out among investors and around the country, as well as around the world. In theory, this should have allowed mortgage lending to be less risky, and more diversified."
"The original idea was a good one, which was, lets see if we can distribute risk more broadly, and make it easier to provide loans to people who otherwise might not be able to get one."
Listen for yourself. You cannot dispute the mans on words recorded live:
http://www.youtube.com/watch?v=Lr1M1T2Y314&feature=related
Obama in this second video is campaigning at a convention of Acorn and I believe two other ???Community Activist's organizations. Ask if he will be their ally if he becomes President, Obama says, quote:
"Yes, but let me say that before I even get inaugurated, during the transition we are going to be calling all of you in to help us shape the agenda."
See and hear it for yourself. Obama promised that Acorn and other groups like it will setting his agenda if elected:
http://www.youtube.com/watch?v=8vJcVgJhNaU
Below is a link to C-SPAN video clips of the Congressional hearings at roughly the time McCains attempt at S.190. to fix Fannie and Freddie. See for yourself who said what.
http://www.youtube.com/watch?v=_MGT_cSi7Rs
See also
http://www.newsweek.com/id/164732 from this web site. (oops!) stating that Freddie Mac was spending tax payer money to target Republicans in 2005 who were trying to regulate Fannie and Freddies fraud. Democrats were not targeted, as the were all in the tank with Fannie and Freddie to kill the regulations. Hear that, the article admits that Republicans were trying to regulate Freddie and Fannie, and Democrats were trying to stop it from happening as a means to facilitate the Community Reinvestment Act.
See also: http://www.newsweek.com/id/164972
Stating that Gramm-Leach-Bliley Act wasn't what caused the meltdown, and noting that "economists on both sides of the political spectrum have suggested that the act has probably made the crisis less severe than it might otherwise have been."
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The Leadership Vacuum
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The proposals being advanced to isolate bad assets, recapitalize the banking system and guarantee interbank lending are necessary, given the magnitude of the crisis. But the need for this dramatic action has yet to be explained in a way that makes sense to Americans on both Main Street and Wall Street. This may account, in part, for why markets haven't been buying what Washington has been pushing. Presidents and policymakers may not have control over the ups and downs of financial markets, but those markets render a verdict on the credibility of policies being put forth. So far the verdict is very negative, even if Monday morning's upturn offers hope. They haven't done nearly a good enough job explaining and justifying their actions.
The meeting of the finance ministers of the Group of Seven nations (G7) this weekend, is a test of leadership on the international stage. The G7 may have found some common purpose, but the global economic crisis will test international relations. We may not find one-size-fits-all policies, but people around the world are looking for clarity and cooperation. They want to believe that there is a rational order to things and that the people in charge know that.
And where are the great corporate leaders who might contribute to this very public discussion about an economic problem? Some of them (the Detroit folks come to mind) have been lined up with their tin cups hoping to get a piece of the bailout action. How often have you seen a top CEO take a truly bold and principled stand on a tough issue? Warren Buffett is about the closest thing we have to a J.P. Morgan, whose firm direction helped guide the nation through the financial panic of 1907.
While it is easy to lament the lack of leadership, we should not be surprised. In fact, that's why we design our political and economic institutions to function and be resilient so that they can endure rule by mediocrity. When crisis strikes, however, we do look for individuals to take decisive action—but also to explain the direction they are taking us in and why.
As the dean of a business school that seeks to train future business leaders, I think about these issues a great deal. How can an academic program impart knowledge, encourage independent thinking and foster principled, ethical behavior? Ultimately, how we and the other institutions of America do this job will determine how we navigate and emerge from this financial and economic crisis. Let's hope, in the words of Henry V, that "he that outlives this day, and comes safe home, will stand a tip-toe when this day is named."
Thomas Cooley is Dean of the NYU/Stern School of Business and Paganelli-Bull Professor of Economics.
© 2008
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