Last night, I and millions of Americans watched and listened to President Obama layout what we, as a country, need to do to bring our country out of our economic recession. President Obama’s speech was well crafted and laid out the major sectors of the economy that need support -- energy, healthcare and education. The rest of the world does not even argue anymore about the importance of these three segments to the success and survival of a complex society in the 21st century. It is time that we, as a nation, realize that what holds us back can be corrected. The economic philosophy that the central government has no part or responsibility in bringing a nation’s economy out of a recession is just plain stupid. Stupid because it was under another administration that the national deficit reached a trillion dollars. What do we have here, a semi-permeable membrane where Republicans can create a deficit, but the democrats can not use Keynesian economics to bring us out of the recession?
President Obama mentioned better regulation of the banking and securities industries in his speech last night. I hope he will direct some of that regulation towards the need to rebuild the credit rating agencies (CRAs) and the serious role they play in the world wide credit markets. The economic recovery, as President Obama said, can not take place without the flow of credit to the people that need money for education, to start a business, to buy a car or to buy a house. The extension of this thought is the smooth operation of the structured finance market. This can not take place until the conflicts of interest in the CRAs is confronted and dealt with successfully. The flow of capital to and from the points within our economy that needs credit to grow must be addressed in light of the financial vehicles of the 21st century. Collateralized debt obligations are not going to go away, but they must be made safe for investors. Credit to build this nation is much more than the U.S. Treasury issuing debt instruments to foreign governments, it is the movement of capital in the private sector that will rebuild the middle class. This was what President Obama was talking about in his speech last night, and why it is critical for the flow of credit to be flowing again. But this time, with credit ratings that mean something.
Stay tuned.
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4 comments:
I liked the speech and expected to see what the Republicans acted like. A little surprised when Obama said there would be accountability for the war funds and they stood and applauded.
I rarely talk to or openingly respond to something on TV but when Obama said that he would tax corporations that took American jobs to other countries I responded with "that's right, now we're talking". I keep saying, the first people to go back to work in the recovery will not be in America. Those jobs are offshore.
I agree, we still need accounting from our credit people but we still need accounting for the monies that congress has given to the financial institutions. Have you seen the Northern Trust article?
Yes, I heard about the Northern Trust golf outing etc. Marketing is a part of banking, and going to White Castle might do it for me, there are clients out there that need a little more. People that work at these type of resorts need to keep their jobs too. You are right about the money being spent right here in the good old USA. But that means hotels, resorts, spas and golf courses right here in the USA. People need to realize that money spent here in country is a plus.
I did notice quite a few instances where the Republicans did not stand. That was embarassing for them. Imagine if that occurred by Democrats when Bush was in office.....the pundits on the tube would have a field day.
Now, we just need Obama to start making dramatic moves.
True, we need Obama's administration to carry through. The President's comments on credit were right on the mark. We will see if their plans include work on the credit rating agencies too. As I have said for months now, without removing that blood clot, the economic recovery will be DOA. I just hope Volcker and Summers know enough details to deal with that too.
As the Republicans not standing, yes, too bad for them. The Republicans have no good ideas to bring to the table. They are more a political cartoon than a political party.
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