Obama's true economic dilema

[Universe Prince]

http://www.reason.com/news/show/130222.html

Republicans had many things going against them this election, but the financial market implosion in September proved to be the final blow that sealed their losses, as voters almost always associate the economy with the party in power. And when the credit crisis emerged as the top campaign issue, Sen. Barack Obama (D-Ill.) pounced on his opponent with two basic messages. One was to blame the policies of deregulation that Sen. John McCain (R-Ariz.) voted for. And the second was to hug former rivals Bill and Hillary Clinton as hard as he could and harken back to the prosperity and economic growth of the 1990s. [...] But now that he has won the presidency and must, as the cliché goes, shift from campaigning to governing, Obama and his economic team will have to face up to a paradox that most of the media overlooked during the campaign. Namely, the Obama campaign's twin messages of bashing deregulation and embracing the Clinton years were inherently contradictory. Bill Clinton signed nearly every deregulatory measure that John McCain backed—the same measures that are now being blamed (wrongly) for helping cause the current crisis. What's more, Clinton administration officials have credited these policies for contributing to the ‘90s economic boom—the very "shared prosperity" that Obama says he wants to go back to. [...] But if Obama follows through on his campaign rhetoric on regulation, it will not be the Bush economic policies he will be overturning. In the financial area, ironically, Clinton was actually the more deregulatory president. As James Gattuso of the Heritage Foundation points out, while there may have been flawed oversight, there really was no financial deregulation under Bush. Indeed, Bush's signature achievement in the financial area was the signing and implementing of the costly and counterproductive Sarbanes-Oxley accounting mandates. [...] Summers and Clinton were—and are—correct. [Gramm-Leach-Bliley, the 1999 law Clinton signed repealing the Depression-era Glass-Steagall Act,] benefited the economy by creating more choice and competition, and there is little evidence of Glass-Steagall's repeal playing a role in the mortgage crisis. As the American Enterprise Institute's Peter Wallison noted in The Wall Street Journal, "None of the investment banks that have gotten into trouble—Bear, Lehman, Merrill, Goldman or Morgan Stanley—were affiliated with commercial banks." He also pointed out that "the banks that have succumbed to financial problems—Wachovia, Washington Mutual and IndyMac, among others—got into trouble by investing in bad mortgages or mortgage-backed securities, not because of the securities activities of an affiliated securities firm."

[Plane]

  Is the common perception in this case the reverse of reality?

Or only partially so?

[Xavier_Onassis]

Some deregulations were useful, others were highly irresponsible. Think of regulation like bacteria--not all are harmful, and some are beneficial, others indispensible.

[Plane]

Some deregulations were useful, others were highly irresponsible. Think of regulation like bacteria--not all are harmful, and some are beneficial, others indispensible.

Hmmm....

Bears thinking about .

All of them loked like a good idea at the beginning , it is after years of effect that we know whether we are looking at something as usefull as yeast or as annoying as yeast infection.

[Xavier_Onassis]

LIke bacteria, the rules that govern economics were not designed by men, and do not benefit men at all times. Like bacteria, the rules of economics need to be studied carefully and decisions need to be made carefully on what is known to work and not work.

There are those who worship capitalism: this is like worshipping amoebas or e coli.

[Plane]

LIke bacteria, the rules that govern economics were not designed by men, and do not benefit men at all times. Like bacteria, the rules of economics need to be studied carefully and decisions need to be made carefully on what is known to work and not work.

There are those who worship capitalism: this is like worshipping amoebas or e coli.

Worship is a wrong attitude twards andy brand of commerce , capitolism if it can be compared to bacteria can be compared to fermentation , which can be a productive process if rightly harnessed.

[Xavier_Onassis]

Worship is a wrong attitude twards andy brand of commerce , capitolism if it can be compared to bacteria can be compared to fermentation , which can be a productive process if rightly harnessed.
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I can agree with this.