"I did not run for office to be helping out a bunch of fat cat bankers on Wall Street," President Obama told Steve Kroft of 60 Minutes. In a narrow sense, that may be true. But Obama did run for office in part to keep the unemployment rate from rising to -- and staying above 10 percent. And his pursuit of that end has aligned the president with the fat cats.
In a financial crisis like the one we are in, spending falls and unemployment rises. To curb the rise in unemployment, something has to be done to boost spending. There are two broad mechanisms. First, Obama could use the government directly to boost spending--nationalize banks and get them to lend to people who will spend; order government-sponsored enterprises to lend to farmers, home buyers and others who will spend; and boost direct government purchases.
With the roll out of its $787 billion stimulus plan, the administration has done a little along those lines. But using government to boost spending also requires boosting the short-term government budget deficit extravagantly. And it is clear that Obama thinks he did not run for office to do that.
So the first mechanism is out. What is the second?
No comments:
Post a Comment